Unpaid Leave in Malaysia: Rules, How to Calculate, & Request Template

Unpaid leave, also known as leave without pay (Cuti Tanpa Gaji - CTG), is a period when an employee is absent from work without receiving wages.

Whether it's for personal reasons, medical needs, or family matters, unpaid leave is sometimes necessary.

As an employer, it’s important to understand how unpaid leave works, how it affects your business, and what options are available.

This guide explains everything in simple terms to help you handle unpaid leave effectively.

What is Unpaid Leave?

Unpaid leave (also called Cuti Tanpa Gaji or CTG in Malay) is when an employee takes time off work without getting paid.

Unlike annual leave, unpaid leave is not a right—it must be approved by the employer.

Employees usually request unpaid leave when they have used up their paid leave or for special circumstances.

When Can Employees Take Unpaid Leave?

Employees may request unpaid leave for different reasons, such as:

Personal matters – Handling family emergencies or personal issues.
Medical reasons – Recovering from an illness after using up all sick leave.
Bereavement – Taking time off after the loss of a loved one.
Childcare – Caring for a newborn or a sick family member.
Education or travel – Studying or following a spouse overseas for a temporary period.

Is Unpaid Leave Mandatory for Employers?

Under Malaysia’s Employment Act 1955, there is no specific rule that forces employers to provide unpaid leave.

It depends on company policies and the employment contract. However, employers can offer unpaid leave as a benefit to support employees during difficult times.

Employee Unpaid Leave Form Template

To streamline the process, employers can use the following unpaid leave request form:

Employee Unpaid Leave Request Form Template

Employee Details:

Name: ___________________________
Employee ID: _____________________
Department: _____________________
Position: ________________________

Leave Details:

Start Date: _______________
End Date: _______________
Total Days Requested: _______

Reason for Unpaid Leave:
☐ Personal matters
☐ Medical reasons
☐ Bereavement
☐ Childcare
☐ Education/travel
☐ Other: ___________________________

Acknowledgment:
I understand that this unpaid leave request is subject to management approval and that my salary will be adjusted accordingly.

Signature: ____________________
Date: _______________

Approval (For HR Use Only)
Approved ☐ | Rejected ☐
Remarks: ___________________________

Manager’s Signature: __________________
Date: _______________

How to Handle Unpaid Leave Requests?

As an employer, you can set clear policies on unpaid leave. Here’s how you can handle requests fairly:

Review the request – Check if the employee has valid reasons and if they have used all their paid leave.
Consider business needs – Make sure their absence won’t disrupt operations too much.
Communicate clearly – Explain the impact of unpaid leave on salary, benefits, and job position.
Document everything – Keep records of approvals, rejections, and agreements to avoid misunderstandings.

How to Calculate Salary Deduction for Unpaid Leave?

If an employee takes unpaid leave, their salary will be deducted based on the number of days they are absent. The formula used is:

Monthly Salary/Total Working Days in the Month x Unpaid Leave Days

For example:

Monthly Salary = RM3,000
Total Working Days in the Month = 22 (excluding weekends and public holidays)
Unpaid Leave Days = 2
The total unpaid leave deduction = RM3000 / 22 x 2 = RM272.73
Final Salary=Monthly Salary−Unpaid Leave Deduction
Final Salary Received = RM3,000−RM272.73= RM2,727.27

Effects of Unpaid Leave on Employees

While unpaid leave allows employees to take time off when needed, it also has consequences:

Loss of income – Employees won’t receive a salary for unpaid leave days.
No EPF & SOCSO contributions – These payments are based on salary, so they will be reduced.
Possible career impact – Long periods of absence may slow down career growth.

Effects of Unpaid Leave on Employers

Unpaid leave doesn’t just affect employees—it can also impact your business in several ways:

Disruptions to workflow – When key employees take unpaid leave, it may cause delays in projects or operations.
Increased workload for other employees – Other team members may need to cover for the absent employee, leading to burnout or lower productivity.
Temporary hiring costs – If an employee takes long-term unpaid leave, employers may need to hire temporary staff, which adds costs and administrative work.
Employee morale – If unpaid leave policies are unclear or unfairly applied, it may lead to dissatisfaction among employees.

Alternatives to Unpaid Leave

Instead of unpaid leave, employers can consider:

Flexible work hours – Allow employees to work different hours or from home.
Part-time work – Reduce working hours while still providing some salary.
Advance leave – Let employees take leave in advance and deduct it later.

Can an employer reject unpaid leave requests?

Yes, employers have the right to reject unpaid leave requests if it affects business operations or if the reason is not valid.

However, it is best to discuss alternatives with employees to find a fair solution.

Frequently Asked Questions (FAQs)

1. Can an employer reject unpaid leave requests?

Yes, employers have the right to reject unpaid leave requests if it affects business operations or if the reason is not valid.

2. Does unpaid leave affect annual leave entitlement?

It depends on company policy. Some companies reduce annual leave entitlement if an employee takes a long period of unpaid leave.

3. Can employers force employees to take unpaid leave?

Employers should not force unpaid leave unless it is due to exceptional situations like financial crises or company downsizing. It is best to consult employees and find a fair solution.

4. What should employers include in an unpaid leave policy?

A good policy should include eligibility, how to apply, how salary deductions work, and how it affects other benefits.

Need to Hire a Temporary Replacement?

If an employee is on unpaid leave for an extended period, you may need extra help.

Post job ads on Maukerja and Ricebowl through AJobThing to find part-time or contract staff quickly.

By understanding unpaid leave and planning ahead, you can support employees while keeping your business running smoothly!

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