What Myanmar law says
Yes — an employee in Myanmar can take unpaid leave with employer agreement. The Leave and Holidays Act does not prescribe a statutory unpaid-leave entitlement; it sets the floor for paid leave (annual, casual, sick, maternity, public holidays) and leaves additional unpaid absences to employer policy or to a contractual provision in the employment agreement under the Employment and Skills Development Law (ESDL) 2013.
This means unpaid leave is a discretionary entitlement — the employer is not statutorily required to grant it, but is also not statutorily prohibited from doing so. Both the Factories Act 1951 and the Shops and Establishments Act recognise unpaid absences as long as they are documented, agreed in writing, and reflected in the leave register.
Common scenarios for unpaid leave
| Scenario | Typical practice |
|---|---|
| Sick beyond the 30-day paid sick-leave entitlement | Unpaid medical leave (after annual leave is also exhausted) |
| Extended family event (wedding, funeral, illness) | Unpaid family leave by mutual agreement |
| Education / training not sponsored by the employer | Unpaid study leave |
| Pilgrimage | Unpaid pilgrimage leave (see pilgrimage leave) |
| Sabbatical for personal projects | Unpaid sabbatical, employer-discretion |
| Maternity beyond 14-week statutory window | Unpaid extension by mutual agreement |
How to apply and approval process
- Written request. Employee submits a request stating reason, requested duration, and proposed start date. Most employers require at least 4 weeks' notice for non-emergency unpaid leave.
- Employer approval. Employer assesses operational impact and may approve, refuse, or counter-offer an alternative duration.
- Written agreement. If approved, document the start and end dates, the unpaid status, and the effect on benefits in a short letter signed by both parties.
- Effect on accruals. Annual-leave accrual typically pauses during long unpaid leave (e.g., over 1 month); SSB contributions also pause for the unpaid period.
- Job protection. The employee's role is held only for the agreed duration; on return, the same or comparable position resumes per the agreement.
Effect on benefits during unpaid leave
| Item | Treatment during unpaid leave |
|---|---|
| Salary | Not paid for unpaid days |
| Annual leave accrual | Typically paused for unpaid leave longer than 1 month |
| SSB contributions | Not paid by employer or employee for unpaid months — the employee's IP status remains, but no contributions accrue |
| PIT | No PIT withholding because no salary is paid |
| Insurance / other contractual benefits | Per company policy — many employers continue medical insurance during short unpaid leave |
| Service continuity | Service tenure typically preserved if unpaid leave is documented and approved; long absences should be confirmed in writing |
Edge cases and exceptions
- Sick beyond 30 days. Eligible IPs may claim the SSB sickness cash benefit; the employer-side absence is unpaid.
- Probationary employees. Unpaid leave during probation is heavily discretionary — most employers refuse it because probation is a trial period.
- Notice period overlap. Unpaid leave during notice is generally restricted; balance counts against the notice period only with explicit agreement.
- Daily-wage workers. Unpaid days are simply unpaid; service continuity may be re-evaluated for absences over a week.
- Foreign workers. Same treatment; visa status may impose additional limits on extended absences abroad.
- Maternity extension. Unpaid maternity extension by mutual agreement preserves job-return rights if documented.
- Factory vs office. Same treatment under both sub-statutes; documentation duty is identical.
Employer takeaway
Treat unpaid leave as a discretionary, written-agreement entitlement. Require a written request 4 weeks in advance for non-emergencies, document approval in a short letter, and reflect the start/end dates in the leave register. Pause annual-leave accrual for unpaid spells over 1 month, and stop SSB contributions for unpaid months. Continue contractual non-cash benefits per policy. Retain leave records for at least 7 years.
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
- Granting unpaid leave verbally. Always document in writing — start/end dates, accrual treatment, benefits.
- Continuing accrual during long unpaid leave. Most policies pause accrual for unpaid leave over 1 month.
- Forgetting to pause SSB contributions. Continued contributions on zero pay create reconciliation issues.
- Withholding return-to-work without grounds. If the leave was approved, the employee returns to the same or comparable role.
- Letting unpaid leave run open-ended. Always set an end date in the agreement; renew if needed by a fresh written request.
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