data tool
Severance pay calculator for South Africa
An employee dismissed for operational requirements in South Africa is owed severance pay of at least one week's remuneration for each completed year of continuous service, under section 41 of the Basic Conditions of Employment Act. This calculator converts monthly pay to weekly at four and one third weeks a month and shows the notice period beside it.
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How it works
- 1
Enter the dates
Type the first and last day of continuous service.
- 2
Enter remuneration
Type the remuneration and pick whether it is per month or per week.
- 3
Mark farm or domestic work
Tick the box for a farm worker or domestic worker, whose notice rules differ.
- 4
Read the result
The tiles show minimum severance, completed years, weekly remuneration and the notice period.
One week per completed year
Section 41(2) says an employer must pay an employee dismissed for reasons based on its operational requirements severance pay equal to at least one week's remuneration for each completed year of continuous service. Operational requirements are economic, technological, structural or similar needs of the employer, which is what retrenchment means. Only completed years count: 9 years and 11 months is 9 weeks. Someone on R5,000 a week with 9 completed years is owed at least R45,000.
Monthly pay as four and one third weeks
Section 35(3) treats monthly remuneration as four and one third times weekly remuneration. To turn a monthly figure into a weekly one, multiply by 3 and divide by 13: R13,000 a month is R3,000 a week. Section 35(5) adds that remuneration for severance pay includes the cash value of payments in kind that form part of it, so housing or a vehicle provided as part of the package counts. Where pay fluctuates, the Act uses the average over the preceding 13 weeks.
Continuous service and completed years
Continuous service runs from the first day with the employer to the date of dismissal, and service with a previous owner can carry over when a business is transferred as a going concern. Only whole years count, so the date matters: an employee retrenched a few weeks before an anniversary gets one week less than one retrenched just after it. The calculator counts completed years between the two dates you type, and shows the full length of service in the copied line so the letter can state it.
The notice beside it
Section 37(1) sets the minimum notice for ending a contract: one week if the employee has been employed for four weeks or less, two weeks for more than four weeks but not more than one year, and four weeks for one year or more. A farm worker or domestic worker employed for more than four weeks also gets four weeks. Notice can be paid instead of worked. Severance pay is owed on top of notice pay, not instead of it.
When severance is lost
Section 41(4) says an employee who unreasonably refuses to accept the employer's offer of alternative employment, with that employer or any other, is not entitled to severance pay. The offer must be reasonable in terms of pay, status and location. Severance is also separate from any amount owed for unfair dismissal, which the Labour Relations Act deals with, and the payment of severance does not stop a challenge to the fairness of a retrenchment.
Writing it down
A retrenchment letter should state the reason, the consultation that took place, the last day, the notice, the severance with its completed years and weekly figure, leave pay owed and the payment date. The AI document generator writes that letter from a description that includes the numbers this calculator produces, laid out as a numbered letter ready to sign.
Limits
- Law checked on 21 October 2026 against the Basic Conditions of Employment Act 75 of 1997 as published by the Department of Employment and Labour. This is arithmetic, not legal advice.
- Remuneration includes the cash value of payments in kind; type the full figure.
- A collective agreement or contract can give more, and a bargaining council may set its own scale.
- An employee who unreasonably refuses reasonable alternative employment loses the right to severance pay; the tool does not judge that.
What it does not do
- It does not work out tax on the severance benefit.
- It does not decide whether the retrenchment process was fair.
- It does not store the dates or pay.
Questions people ask
How is severance pay calculated in South Africa?
Multiply one week's remuneration by the number of completed years of continuous service. A monthly salary is converted to weekly by multiplying by 3 and dividing by 13. R21,667 a month is about R5,000 a week, so 9 completed years gives at least R45,000.
Do I get severance pay if I resign?
No. Section 41 severance pay is owed when the employer dismisses for operational requirements, which is retrenchment. An employee who resigns, or is dismissed for misconduct or poor performance, is not owed it under the Act, though a contract could promise something.
How much notice must my employer give?
One week if employed for four weeks or less, two weeks for more than four weeks up to one year, and four weeks for one year or more. Farm and domestic workers employed for more than four weeks get four weeks. A collective agreement can shorten the employee's notice in some cases.
Do part years count for severance?
Not under the minimum. Section 41 counts completed years of continuous service only, so 4 years and 11 months counts as 4 years. A collective agreement or the employer's own policy can count part years, and many retrenchment packages do.
Is severance pay taxed in South Africa?
Severance benefits are taxed under their own table, which gives a tax free portion and lower rates than ordinary income, combined with lump sums received from retirement funds. SARS publishes the table each year. The calculator does not apply it.
Can severance be more than one week per year?
Yes. One week per completed year is the minimum. Bargaining council agreements, collective agreements and company policies often pay two or more weeks per year, and the Minister can vary the statutory amount by notice in the Gazette. The calculator shows only the minimum.
Write the retrenchment letter
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Background reading: the question page on this.
Sources
Written and checked by the OneCraft team. Last checked .