Calculate your retrenchment package under the Basic Conditions of Employment Act — severance pay, notice pay, and accrued leave payout.
🇿🇦 South Africa✔ BCEA Compliant⚡ Instant Result
⚖️ Retrenchment Package Calculator
Results update instantly as you type
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Your basic salary before deductions
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Total Retrenchment Package
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Before tax deductions
Severance Pay
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Notice Pay
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Leave Payout
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Pro-rata Bonus
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UIF Benefit (est.)
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Daily Rate
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ℹ️ Severance pay may be taxed differently (partial exemption for long service). Consult a labour attorney for your specific situation.
What Is Retrenchment Pay in South Africa?
Retrenchment (also called "operational requirements dismissal") occurs when an employer terminates employment for economic, technological, or structural reasons — not due to the employee's conduct or performance. Under the Basic Conditions of Employment Act 75 of 1997 (BCEA) and the Labour Relations Act 66 of 1995 (LRA), retrenched employees are entitled to a minimum statutory package.
Your retrenchment package typically consists of four components: severance pay (the BCEA minimum), notice pay in lieu of working the notice period, a leave payout for any accrued but untaken annual leave, and potentially a pro-rata bonus if your employment contract provides for it.
Who Qualifies for Retrenchment Pay?
Any employee employed for longer than four months who is dismissed for operational requirements qualifies for the BCEA minimum severance pay. Fixed-term contract workers, permanent employees, and part-time workers all qualify — provided the dismissal meets the LRA's requirements of a fair process including a genuine consultation.
📐 How Is Retrenchment Pay Calculated Manually?
Severance Pay = 1 Week's Remuneration × Completed Years of Service
1 week= Monthly salary ÷ 4.33 (avg weeks per month)
Years= Completed years only (not rounded up)
Notice= Weekly rate × notice weeks (per contract or BCEA)
Your employer has presented a retrenchment package. Use this calculator to verify the BCEA minimum before accepting. Many employers offer enhanced packages, but you need to know the legal minimum to negotiate from an informed position.
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Financial Planning After Job Loss
Understanding your package amount helps you plan your finances while job hunting. Combined with your UIF benefit estimate, you can calculate your runway and budget accordingly.
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HR Professionals & Payroll
HR managers and payroll administrators can use this tool to quickly verify calculations before presenting packages to employees, reducing errors and disputes.
Frequently Asked Questions — SA Retrenchment
The BCEA minimum is one week's remuneration for each completed year of continuous service. For example, 7 years of service = 7 weeks pay. Your contract or a collective agreement may provide for more — you are always entitled to whichever is greater.
Yes, but with a tax exemption. SARS provides a once-in-a-lifetime exemption on the first R500,000 of severance pay (combined with any prior retirement lump sums received). Above R500,000, a sliding tax scale applies. Notice pay and leave payout are taxed as normal income. Consult a tax practitioner for your specific situation.
Retrenchment (also called dismissal for operational requirements) occurs when the job becomes redundant due to economic, structural, or technological reasons — not because of the employee's behaviour. A standard dismissal for misconduct or incapacity does not entitle you to severance pay. The LRA requires a fair process for both — but only retrenchment triggers the BCEA severance pay entitlement.
Yes. If you and your employer have been contributing to UIF (Unemployment Insurance Fund), you can claim unemployment benefits at your nearest labour centre or online via the Department of Employment and Labour. The maximum benefit is 8 months and is calculated at a percentage of your salary (38–58% depending on earnings). You must apply within 6 months of being retrenched.
Yes. Part-time employees employed for more than 24 hours per month are entitled to the same BCEA protections as full-time employees, including severance pay, on a pro-rata basis. The calculation uses their actual remuneration.
BCEA minimum notice: 1 week for employment under 6 months; 2 weeks for 6 months to 1 year; 4 weeks for 1+ years. Your contract may specify a longer period. If you are not required to work the notice period, you are entitled to payment in lieu of notice.
⚠️ Legal Disclaimer
This calculator provides an estimate based on BCEA minimum requirements. Actual entitlements depend on your employment contract, collective agreements, length of service, and specific circumstances. This is not legal advice. Consult a CCMA-registered labour consultant or labour attorney for advice on your specific situation.