How is severance pay calculated?
For each full year of service, 30 days of gross pay including regular benefits is paid; periods of less than a year are paid proportionally. This pay includes, in addition to the basic salary, regular benefits such as meal and travel allowances and regular bonuses, and cannot exceed the severance pay cap. Only stamp duty is deducted from severance pay.
To be entitled to severance pay, you must have worked for the same employer for at least one year, and the employment contract must have ended for one of the reasons set out in the law, for example dismissal without just cause by the employer, resignation for just cause, retirement or military service.
Notice periods
The notice period is two weeks for employment of less than six months, four weeks between six months and one and a half years, six weeks between one and a half and three years, and eight weeks for more than three years. If the contract is terminated without observing these periods, notice pay equal to the wages for the period is due. Income tax and stamp duty are deducted from notice pay.
What does the calculation not cover?
Overtime, annual leave pay and other employment receivables are not included. Entitlement conditions, how the pay is determined and limitation periods may vary from case to case.