Unpaid leave and sabbaticals in the United Kingdom
Reviewed by Mellow Editorial Team, HR & payroll content team
Employers are not legally required to offer unpaid leave or sabbaticals in most circumstances, but they can choose to do so — and how they handle these arrangements has real implications for payroll, continuity of employment, and staff relations.
What counts as unpaid leave
Unpaid leave is any authorised absence for which the employer does not pay the employee. It covers a wide range of situations: time off beyond statutory entitlement, extended personal leave, career breaks, and sabbaticals.
A sabbatical is a specific type of extended unpaid (or sometimes part-paid) leave, often granted for study, travel, or personal development. There is no statutory right to a sabbatical in the UK. Whether an employee can take one depends entirely on what their contract says, any written policy you have, and what you agree to in writing.
The distinction matters because "unpaid leave" and "sabbatical" are sometimes used interchangeably, but a sabbatical typically implies a longer, more structured absence — often several months — agreed well in advance.
What the law does and does not require
UK employment law does not create a general right to unpaid leave. There are, however, specific statutory rights that must be honoured regardless of what a contract says:
- Parental leave — eligible employees can take up to 18 weeks' unpaid leave per child (up to their 18th birthday), subject to notice rules.
- Time off for dependants — a day or two of unpaid leave to deal with an emergency involving a dependant.
- Time off for public duties — magistrates, councillors, and others fulfilling certain public roles have a right to reasonable time off, though pay is discretionary.
- Statutory family leave — maternity, paternity, adoption, and shared parental leave carry statutory pay entitlements, but there can be unpaid elements once statutory pay runs out.
Outside these categories, any unpaid leave is a matter of contract and agreement. The Employment Rights Act 2025 strengthens day-one rights in several areas, so it is worth reviewing your policies to ensure you are not inadvertently restricting entitlements that employees now hold from their first day.
Employment status and continuity during unpaid leave
This is the area where employers most often make costly mistakes. Unpaid leave does not break continuity of employment — the employee's start date and length of service remain intact. That means their accrued rights (redundancy pay eligibility, unfair dismissal protection, and so on) continue to build.
Statutory annual leave entitlement — 5.6 weeks, or 28 days including bank holidays for a standard five-day week — continues to accrue during most unpaid leave. You should confirm in writing, before the leave starts, how holiday accrual will be handled and when any accrued but untaken leave must be taken.
Pension contributions under auto-enrolment pause naturally when there is no pay, since contributions are calculated on qualifying earnings. If pay drops to zero, neither the employer's 3% minimum nor the employee's 5% contribution applies in that period. You should communicate this to the employee clearly — a gap in pension contributions during a long sabbatical can have a meaningful effect on their pot.
Payroll and HMRC reporting during an absence
Even when an employee is on unpaid leave and receiving nothing, you still have reporting obligations. Under Real Time Information (RTI), you must submit a Full Payment Submission (FPS) on or before each payday. If you pay nothing in a particular pay period, you will typically submit a nil FPS or use the appropriate indicator to tell HMRC the employee is still on your books but not being paid.
Do not simply remove an employee from your payroll system during unpaid leave. Doing so creates gaps in their employment record and can cause problems with tax codes, student loan deductions, and their P60 at year end (which you must issue by 31 May following the tax year).
If the employee is paid any amount during the period — an expense reimbursement, for example — tax and National Insurance apply in the normal way on that payment.
Writing a clear unpaid leave or sabbatical policy
If you are going to offer sabbaticals or extended unpaid leave, a written policy protects both sides. At minimum, it should cover:
- Eligibility — minimum length of service, role suitability, frequency.
- Notice and approval — how far in advance the request must be made, and who approves it.
- Maximum duration — how long a sabbatical can last.
- Holiday accrual — whether leave accrues in full, in part, or (in limited circumstances permitted by law) not at all.
- Pension — what happens to contributions and whether the employee can make voluntary payments.
- Return to work — whether the employee returns to the same role, an equivalent role, or whether any guarantee applies.
- Pay during the period — confirming it is unpaid, or setting out any part-pay arrangement.
Consistency is important. If you approve a sabbatical for one employee and refuse a similar request from another without objective justification, you risk discrimination claims.
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