South Africa Severance Pay Calculator 2026 (Retrenchment, BCEA)
Calculate severance pay on retrenchment in South Africa under the BCEA: one week per year of service, notice pay, leave pay and the tax on the lump sum.
| Item | Detail | Amount |
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The weekly wage is the monthly salary ÷ 4.33 (BCEA section 35). Notice is 1 week in the first 6 months, 2 weeks up to a year and 4 weeks after a year (4 weeks for farm and domestic workers after 6 months). A contract or collective agreement may give more.
What it does
When an employee in South Africa is retrenched for the employer's operational requirements, section 41 of the Basic Conditions of Employment Act (BCEA) requires severance pay of at least one week's remuneration for each completed year of continuous service. On top of it come the notice pay, if the notice is not worked, and the leave not taken. The severance benefit is taxed by the lump sum table, with the first R550,000 tax-free.
How to use it
- Type your monthly salary, the start date and the last day of work.
- Choose why the job ended, whether the notice was worked and the unused leave days.
- Read the severance pay, notice pay, leave pay and the tax on the severance.
The arithmetic runs in your browser. Nothing you type is sent anywhere and nothing is stored, so you can use these with real numbers.
Frequently asked questions
How much severance pay after 7 years and 8 months on R20,000 a month?
The weekly wage is R20,000 ÷ 4.33 = R4,618.94, so 7 completed years give R32,332.56. If the 4 weeks of notice are not worked, notice pay adds R18,475.75, and 10 unused leave days R9,237.88: R60,046.19 in total.
Is severance pay taxed?
Severance benefits on retrenchment are taxed by the lump sum table: the first R550,000 is tax-free over your lifetime, together with earlier retirement lump sums, then 18%, 27% and 36%. Notice pay and leave pay are taxed as normal salary.
Who gets severance pay?
Section 41 of the BCEA gives at least one week's pay per completed year of service to employees dismissed for operational requirements. It is not due on resignation, on dismissal for misconduct, or if you unreasonably refuse other work offered by the employer.
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