Retrenchment & Severance Pay Calculator (South Africa)

What you are owed when your job ends in South Africa

This free retrenchment calculator for South Africa shows what your employer owes you when your job ends, so you are not left wondering whether you are being short changed on the way out. South African law sets a clear floor on what you must be paid, and a retrenchment package is built from a few separate pieces. Severance pay, which is one week of pay for every completed year you worked there, and which the law only requires on a retrenchment. Notice pay, which is one, two or four weeks depending on how long you have been there, paid as a lump sum if the employer would rather you did not work your notice. The leave you built up but never took, which must always be paid out. And a pro rata share of any bonus your contract promises you.

On top of the money your employer owes you, you can usually claim from the Unemployment Insurance Fund while you look for new work. UIF is paid by the state, not your employer, on a sliding scale that replaces between 38 and 60 percent of your income up to a monthly ceiling, and you can draw it for up to roughly a year depending on how long you contributed. You have to claim within twelve months, so it pays to start the moment your job ends. The calculator above gives you a rough figure for this too, so you can see your full picture in one place.

Use the tool to work out the minimum you should be paid before you sign anything. Put in your salary, how long you have worked there, the reason your job is ending, and any leave you are still owed, and it builds your package line by line the way the Basic Conditions of Employment Act does. Remember these are minimums, a fair employer or a negotiated retrenchment agreement may give you more, and a real severance lump sum is taxed gently, so your take home can be better than it first looks.

While you are sorting things out, you can also cut your bank fees to stretch your money further, or browse all our free South African tools and calculators.

How to calculate your severance pay in South Africa

The severance part of a retrenchment payout follows a simple rule. You take one week of your normal pay and multiply it by every completed year you worked for that employer. A week's pay is your monthly salary times twelve, divided by fifty two, so on R20,000 a month a week is about R4,615, and after five full years your severance comes to roughly R23,000. That is the legal floor under section 41 of the Basic Conditions of Employment Act, and it is only owed on a genuine retrenchment, not a resignation or an ordinary dismissal. The calculator above runs this sum for you, then adds your notice pay, the leave you are still owed and any contractual bonus, to give your full retrenchment payout.

Frequently asked questions

How much severance pay must I get if I am retrenched in South Africa?

The legal minimum is one week's pay for every completed year of continuous service, set by section 41 of the Basic Conditions of Employment Act. So five completed years earns at least five weeks' pay. This is only required for a retrenchment, what the law calls a dismissal for operational requirements, not for resignation or a normal dismissal. Your employer can pay more, and many do as part of a retrenchment agreement, but they cannot pay less. If you unreasonably refuse a fair offer of another job, you can lose the right to severance.

How is my notice period worked out?

Notice depends on how long you have worked there. One week if you have been employed for six months or less, two weeks if more than six months but less than a year, and four weeks once you pass one year of service. The same four weeks applies to farm and domestic workers who have worked more than six months. Your contract can give a longer notice period but never a shorter one. If the employer pays you out instead of having you work it, that notice pay is a cash lump sum on top of your severance.

Do I get paid for leave I did not take?

Yes. Any annual leave you have built up but not used must be paid out when you leave, whatever the reason for going, even if you resigned or were dismissed. The legal minimum leave is 21 consecutive days a year, which works out to 15 working days for someone on a five day week, so most people accrue just over one day of leave a month. Your employer should be able to give you your exact leave balance from their records.

Can I claim UIF if I am retrenched?

Yes. If your job is ended by the employer, through retrenchment or dismissal, or your fixed term contract reaches its end, you can claim ordinary unemployment benefits from the Unemployment Insurance Fund. You generally cannot claim if you resigned. The amount is worked out on a sliding income replacement rate between 38 percent for higher earners and 60 percent for the lowest earners, on income capped at R17 712 a month, and you can draw it for up to about twelve months depending on how long you contributed. You must claim within twelve months of losing the job, and UIF money is not taxed.

Is my retrenchment package taxed?

Parts of it are taxed differently. A genuine severance benefit paid because of retrenchment is taxed on the same favourable table used for retirement lump sums, where a large slice is tax free over your lifetime and the rest is taxed at low rates, so your severance often takes home far more than a normal salary deduction would suggest. Notice pay, leave pay and a pro rata bonus are taxed as ordinary income through PAYE. The first R550,000 of severance and retirement lump sums you ever take is tax free, so most people pay no tax at all on the severance itself. That R550,000 is a lifetime exemption, shared across all your qualifying retrenchment and retirement lump sums, so if you have used part of it before, your tax can be higher. The calculator shows both the before tax payout and a rough after tax take home, doing this split for you. The gentle severance treatment assumes you are not a shareholder or director holding more than five percent of the company, and the after tax figure is a guide only, so confirm with SARS or a tax practitioner before you rely on it.

What if I am a domestic or farm worker, paid on commission, or under a bargaining council?

A few things change the figures. Domestic workers and farm workers are entitled to four weeks' notice once they have worked more than six months, where everyone else gets two weeks in their first year, and the calculator has a tick box for this under special cases. If your pay changes from month to month, on commission or piece work, the law works your week's pay off your average earnings over the last 13 weeks, so use that average in the salary box rather than just your basic. And if you fall under a bargaining council, common in industries like motor, retail, metals and security, or your contract simply promises more, those terms can beat the legal minimum, in which case the higher figure is what you are owed. The tool gives the floor set by the Act, always check a council agreement or your contract on top of it. Employers can use this too, including a household letting a domestic worker go, the figure the worker is owed is exactly what you must pay.

What if I think the retrenchment was unfair?

A retrenchment has to follow a fair process as well as have a fair reason. Your employer must consult you in good time, explain the reasons, consider alternatives to letting you go, and use fair selection criteria. If you believe the process or the reason was unfair, you can refer a dispute to the CCMA, normally within 30 days of the dismissal. The figures here are the minimum money owed, they are separate from any unfair dismissal claim.

This calculator gives estimates of the minimum amounts due under the Basic Conditions of Employment Act, it is general information and not legal or tax advice. Your contract, a retrenchment agreement, a bargaining council, commission or variable pay that needs averaging over the last 13 weeks, special categories such as domestic and farm workers, or your exact UIF contribution record can change the numbers. Always check your own payslip and contract, and for a dispute speak to the CCMA or a labour lawyer. Last reviewed June 2026.