Free tool
Retrenchment package calculator
The legal minimum severance pay in South Africa is one week's pay for every completed year of service (section 41 of the BCEA). Notice pay and unused leave are paid on top.
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Minimum severance pay
R17 307.69
Guidance only. Plus notice pay and unused leave.
Protect yourself properly
Questions
How is a retrenchment package calculated?
Weekly pay times completed years of service, at minimum. Many employers or agreements pay more, such as two weeks per year.
Is severance pay taxed?
Yes, but severance benefits get a special lifetime tax-free amount from SARS (shared with retirement lump sums).
What else must be paid on retrenchment?
Notice pay (or working the notice), unused annual leave and any other amounts owed under your contract.