Severance pay South Africa: what the BCEA says a retrenched employee must get
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 20 Oct 2026.Retrenched in South Africa? Section 41 of the Basic Conditions of Employment Act sets severance pay of at least one week’s remuneration for each completed year of continuous service. A week is the monthly pay times 3 and divided by 13, so on R15,000 a month a week is R3,461.54, and ten full years give R34,615.38 before tax.
2026 · Rates and rules read from Basic Conditions of Employment Act 75 of 1997, s.35, 37, 38 and 41 (Government Gazette 18491, gov.za copy) on 20 Oct 2026; they may have changed since.
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This calculator works out the minimum severance pay of section 41 of the Basic Conditions of Employment Act 75 of 1997 (BCEA) and the notice of sections 37 and 38.
How much. At least one week's remuneration for each completed year of continuous service with that employer. Section 35(3) says a monthly wage is four and one-third times the weekly wage, so a week is the monthly pay times 3 divided by 13. Only completed years count.
What counts as remuneration. For severance and notice pay, section 35(5) includes the cash value of payment in kind and leaves out gratuities, allowances paid to enable the employee to work, and discretionary payments not related to hours or performance.
The rest of the article, and all 6 questions about South Africa Severance Pay Calculator (BCEA), are on the South Africa Severance Pay Calculator (BCEA) page.
Section 41 of the BCEA gives at least one week's remuneration for each completed year of continuous service. Work out a week as the monthly pay times 3 divided by 13, then multiply by the completed years: R26,000 a month is R6,000 a week, so ten years give R60,000.
An employee dismissed for the employer's operational requirements, meaning economic, technological, structural or similar needs, is entitled to it. An employee who unreasonably refuses an offer of alternative employment with that employer or another one loses the right under section 41(4).
Section 37 sets at least one week for an employee employed four weeks or less, two weeks for up to one year and four weeks from one year. Farm and domestic workers get four weeks once employed more than four weeks. Section 38 allows pay instead of notice.
One week per completed year is the minimum in the Act. A contract, collective agreement or retrenchment agreement may pay more, and section 41(5) says paying severance does not affect any other amount the employee is owed by law, such as leave pay.
Rates and rules change; check the source before you rely on a figure.
Still stuck? Ask about South Africa Severance Pay Calculator (BCEA) and anybody who knows can answer. No account needed.
Same job, other tools: Salary After Tax Calculator – Old regime or new regime, and what each leaves you every month · Leave Encashment Tax Calculator – The exempt and the taxable halves of a leave payout, with the rule that capped it · Notice Period Buyout Calculator – What an employer recovers for the notice days you do not serve · Superannuation Date Calculator – The last day of the month rule that decides a government retirement · Years Left to Retirement – How long is left before you retire, in years, months and days.
On the related tools: UIF Calculator (South Africa) – South African UIF: 1% from the employee and 1% from the employer, to R177.12 a month.