How is annual leave accrued in Myanmar?

What Myanmar law says

The Leave and Holidays Act grants 10 days of paid annual leave once an employee completes 12 months of continuous service with the same employer. The Act describes the entitlement as a service-year credit rather than a daily or weekly accrual rate. The sub-statutes — the Factories Act 1951 for factory workers and the Shops and Establishments Act for office, retail, and hospitality staff — incorporate this floor and require employers to keep a leave register that records each day of leave taken.

While the law speaks in service-year terms, almost every Myanmar employer tracks accrual on a monthly basis so partial-year balances can be reported on payslips and paid out cleanly when an employee exits mid-year. The standard convention is 0.83 days per completed month (10 ÷ 12 = 0.833…), rounded to two decimals.

Entitlement table

How accrual is tracked in practice

• Crediting model — service year (statute view). The law credits 10 days at the end of each completed year of service. A leaver with 11 months has technically not yet earned annual leave under the strict statutory reading.
• Monthly accrual model (employer practice). Most employers credit 0.83 days/month from month 13 onwards, or from day one as a contractual benefit. This makes mid-year exits administratively simple.
• Contractual accrual from day one. Many foreign-invested employers grant pro-rated annual leave from the first day of employment as a hiring incentive. Once written into the contract, this becomes enforceable.
• Carry-forward rules. Unused balance can typically roll forward up to a 30-day cap; the Act does not specify a single statutory cap, so the cap is set by employer policy.

Worked example — accrual mid-year

An employee joins on 1 April 2026 on a salary of MMK 600,000/month. Their first day of statutory annual-leave eligibility is 1 April 2027. If the employer grants pro-rated accrual under company policy, the running balance from month 1 onward looks like this:

Edge cases and exceptions

• Probationary employees. Statutorily ineligible until 12 months of service. Pro-rated accrual during the 3-month probation is contractual, not statutory. See probationary leave rules.
• Daily-wage workers. Accrue annual leave only if engaged continuously for 12 months by the same employer.
• Part-time employees. Pro-rate the 10-day entitlement by contracted hours or days.
• Unpaid leave. Periods of unpaid leave longer than 1 month typically pause accrual; codify the rule in policy.
• Service breaks. A genuine break in service (resignation followed by re-hire) restarts the 12-month clock, unless re-employment letters preserve continuity.
• Foreign workers. Accrue on the same basis as Myanmar nationals when employed by a Myanmar-registered employer.

Frequently asked questions

Does this entitlement apply to employees on fixed-term contracts?

Yes. Fixed-term contract employees in Myanmar receive the same statutory leave floor as permanent employees once they meet the relevant service-tenure thresholds. The Leave and Holidays Act, the Factories Act 1951, and the Shops and Establishments Act do not distinguish between fixed-term and indefinite contracts for leave purposes — eligibility is set by months of continuous service. Contract expiry is not termination, so unused annual-leave balance is encashed at the end of the contract using (monthly salary ÷ 30) × unused-days. See the bucket E pages on fixed-term contracts for the contract-side rules.

How does this interact with payroll and SSB?

All paid leave is treated as ordinary salary income for Myanmar payroll purposes. PIT is withheld through PAYE on every payslip that includes leave pay. SSB contributions (2% employee + 3% employer, capped on a wage base of MMK 300,000/month) continue during paid leave because the employee is still earning wages. SSB contributions pause only during unpaid leave. Encashment of accrued annual leave at exit is part of taxable salary for PIT but practitioners differ on SSB treatment of the lump sum — confirm with the township SSB office on filing.

What records does the township labour office expect?

Inspectors typically request the leave register for the past 12 months, medical certificates for sick leave over 3 days, maternity / paternity SSB filings, final settlement worksheets for recent leavers, and the public-holiday gazette for the current year. Records must be retained for at least 7 years under both the Factories Act 1951 and the Shops and Establishments Act. Keeping a clean per-employee leave file with tagged entries makes inspections quick and defensible. Digital records from a payroll system are acceptable provided they can be printed on demand.

Common leave-law mistakes

• Crediting all 10 days on day one without a clawback clause — if the employee leaves within 12 months, the over-credited balance is hard to recover.
• Letting balances accumulate without a carry-forward cap — codify the 30-day cap or your chosen lower number.
• Failing to pause accrual during long unpaid leave — uncapped accrual during unpaid sabbaticals creates unexpected liabilities.
• Applying office accrual rules to factory workers — entitlement is the same, but the Factories Act 1951 imposes stricter register-keeping duties.
• Forgetting to encash unused leave at exit — encashment is statutorily owed, not optional.