Employment Act · 2026 Revised Edition · Part · Rest Days, Hours of Work, Holidays and Other Conditions of Service
71. Annual leave
In plain English
Not legal advice
An employee with at least 3 months of service gets 7 days of paid annual leave for the first 12 months of continuous service. Each further 12 months adds one day's leave, up to a maximum of 14 days. Leave not taken within 12 months after each 12 months of service is lost.
Summary · Drafted with AI, checked against the official text on 30 Sep 2026.
Official textFrom Attorney General's Chambers, unchanged
An employee who has served an employer for a period of not less than 3 months shall be entitled to —
employee
“employee” means a person who has entered into or who works under a contract of service with an employer, and includes a workman and any public officer or employee of the Government included in a category, class or description of such officers or employees declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act or any Part thereof; but does not include any seaman, domestic worker or any person employed in a managerial, executive or confidential position or any person belonging to any other class of person whom the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, may by notification published in the Gazette, declare not to be employees for the purposes of this Act;
paid annual leave of 7 days in respect of the first 12 months of continuous service with the same employer; and
an additional one day’s annual leave for every subsequent 12 months of continuous service with the same employer, subject to a maximum of 14 days of such leave, which shall be in addition to the rest days, public holidays and sick leave to which the employee is entitled under sections 63, 70 and 72 respectively.
An employee who has served an employer for a period of not less than 3 months but who has not completed 12 months of continuous service in any year shall be entitled to annual leave in proportion to the number of completed months of service in that year.
employer
“employer” means any person who employs another person under a contract of service and includes — (a) the Government, in respect of such categories, classes or descriptions of public officers or employees of the Government as are declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act; (b) any statutory body; (c) the duly authorised agent or manager of the employer; (d) the person who owns or is carrying on or for the time being responsible for the management of the profession, business, trade or work in which the employee is engaged;
In calculating the proportionate annual leave under subsection (2), any fraction of a day which is less than one-half of a day shall be disregarded and where the fraction of the day is one-half or more it shall be regarded as one day.
Where an employee is granted leave of absence without pay by the employer at the request of the employee, the period of the leave shall be disregarded for the purpose of computing continuous service under this section.
An employee shall forfeit his entitlement to annual leave if he absents himself from work without the permission of the employer or without reasonable excuse for more than 20 per cent of the number of working days in the months or year, as the case may be, in which his entitlement to such leave accrues.
The employer shall grant and the employee shall take such annual leave not later than 12 months after the end of every 12 months continuous service and any employee who fails to take that leave by the end of such period shall thereupon cease to be entitled thereto.
Employment 54
The employer shall pay the employee his gross rate of pay for every day of such annual leave and if an employee has been dismissed otherwise than for misconduct before he has taken that leave, the employer shall pay him his gross rate of pay in respect of every day of that leave.
gross rate of pay
“gross rate of pay” means the total amount of money including allowances to which an employee is entitled under his contract of service either for working for a period of time, that is, for one hour, one day, one week, one month or for such other period as may be stated or implied in his contract of service, or for each completed piece or task of work but does not include — (a) additional payments by way of overtime payments; (b) additional payments by way of bonus payments or annual salary supplements; (c) any sum paid to the employee to reimburse him for special expenses incurred by him in the course of his employment; (d) productivity incentive payments; and (e) travelling, food or housing allowances: Provided that in the case of employee on piece rates, the ordinary rate of pay shall be calculated by dividing the period of 14 days immediately preceding the day on which the rate of pay is required to be calculated by the number of days on which such employee actually worked during such period;
The Minister may, with the approval of His Majesty the Sultan and Yang Di-Pertuan, by notification published in the Gazette, fix the periods when and prescribe the manner in which, annual leave shall be granted to employees in different types of employment or in different classes of industry.
Terms defined in s 2
employee
Defined · s 2“employee” means a person who has entered into or who works under a contract of service with an employer, and includes a workman and any public officer or employee of the Government included in a category, class or description of such officers or employees declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act or any Part thereof; but does not include any seaman, domestic worker or any person employed in a managerial, executive or confidential position or any person belonging to any other class of person whom the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, may by notification published in the Gazette, declare not to be employees for the purposes of this Act;
employer
Defined · s 2“employer” means any person who employs another person under a contract of service and includes — (a) the Government, in respect of such categories, classes or descriptions of public officers or employees of the Government as are declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act; (b) any statutory body; (c) the duly authorised agent or manager of the employer; (d) the person who owns or is carrying on or for the time being responsible for the management of the profession, business, trade or work in which the employee is engaged;
gross rate of pay
Defined · s 2“gross rate of pay” means the total amount of money including allowances to which an employee is entitled under his contract of service either for working for a period of time, that is, for one hour, one day, one week, one month or for such other period as may be stated or implied in his contract of service, or for each completed piece or task of work but does not include — (a) additional payments by way of overtime payments; (b) additional payments by way of bonus payments or annual salary supplements; (c) any sum paid to the employee to reimburse him for special expenses incurred by him in the course of his employment; (d) productivity incentive payments; and (e) travelling, food or housing allowances: Provided that in the case of employee on piece rates, the ordinary rate of pay shall be calculated by dividing the period of 14 days immediately preceding the day on which the rate of pay is required to be calculated by the number of days on which such employee actually worked during such period;
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