Severance and notice pay
Estimated severance, notice and unused leave pay based on service period, wage and type of termination.
How is it calculated?
Severance pay is due to employees with at least one year of service: 30 days' gross wages per full year, with remaining periods prorated. Regular benefits are included. The amount is capped by the ceiling in force on the termination date.
The notice period is 2 to 8 weeks depending on service: under 6 months 2 weeks, 6 months–1.5 years 4 weeks, 1.5–3 years 6 weeks, over 3 years 8 weeks. Notice pay has no ceiling.
Only stamp tax (0.759%) is deducted from severance pay. Income and stamp taxes are deducted from notice and leave pay; the net amount may vary with total annual earnings.
FAQ
Can an employee who resigns get severance pay?
As a rule, no. It is due, however, where the employee terminates for just cause (such as unpaid wages), on retirement, for military service, or when a female employee leaves within one year of marriage.
When does a severance claim become time-barred?
Severance, notice and annual leave pay claims are subject to a five-year limitation period from termination. Mediation is mandatory before filing suit.
This tool is for general information and gives approximate results; it does not constitute legal advice. Updated:
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