Retrenchment Package Calculator — South Africa
Calculate your retrenchment package entitlement. Estimate severance pay, notice pay, and CCMA guidelines.
Last updated: May 2026
Calculates the minimum statutory severance pay you are owed under the Basic Conditions of Employment Act — and estimates the after-tax lump sum you'll receive.
Key inputs explained
- Years of service
- Total continuous service with the employer, including any periods before the current contract.
- Weekly remuneration
- One week's pay based on your current package (basic salary ÷ 52).
The first R500 000 of a retrenchment lump sum is tax-free (if you haven't used this exemption before). This is a lifetime exemption across all retirement and retrenchment payouts.
Frequently Asked Questions
Under the Basic Conditions of Employment Act (BCEA), you are entitled to a minimum of 1 week's remuneration for every completed year of service. For example, 10 years of service entitles you to 10 weeks' pay. Many employers pay more than the statutory minimum — check your employment contract or company policy.
Retrenchment packages are taxed using a special retirement lump sum tax table. The first R500,000 of the combined total of all retirement and retrenchment lump sums you receive in your lifetime is tax-free. Amounts above R500,000 are taxed at 18%, above R700,000 at 27%, and above R1,050,000 at 36%.
Notice pay depends on your length of service: 1 week for less than 6 months; 2 weeks for 6 months to 1 year; 4 weeks for 1 year or more (or as specified in a contract or bargaining council agreement). Your employer may pay out the notice period in lieu of requiring you to work it.
No. Section 189 of the Labour Relations Act requires a fair, consultative process: the employer must issue a Section 189 notice, engage in meaningful consultation about alternatives to retrenchment, apply fair selection criteria (e.g. LIFO — last in, first out), and offer any available alternative positions before proceeding.
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