Severance pay: how much are you actually owed?
Severance is usually owed after a year of continuous employment, and much of it may already be sitting in your pension fund. Working out what is left to claim starts with reading your own payslips.
How the amount is built
The calculation rests on your final salary and your length of service, so both need to be established precisely before any figure means anything. Check what counts as salary for this purpose: fixed additions usually belong in it, one-off bonuses usually do not, and that distinction moves the total. Periods of unpaid leave, maternity leave and reserve duty affect seniority in their own ways, so map the whole employment period rather than assuming it ran unbroken.
What is already in the fund
Most employers deposit part of the severance component into a pension or provident fund each month. That money is generally yours and is released with a 161 form; what you can claim from the employer is usually the gap between the deposits and the full entitlement. Ask the fund for a statement and compare it with your payslips, because the two do not always agree and the difference is the point.
If the employer disputes it
Put your calculation in writing with the payslips attached, state the sum and give a date. Employers frequently accept the arithmetic once they see it laid out, and the ones who do not usually reveal which element they contest, which narrows the argument. Do not sign a release or a settlement before you know the full figure.
FAQ
- Do I get severance if I resigned?
- Sometimes. Certain resignations are treated like dismissal for this purpose, including some health, relocation and material-change situations. Check your own case before assuming you have no claim.
- Does it matter why I was dismissed?
- Usually not for entitlement, though there are narrow exceptions in serious disciplinary cases. Do not accept a blanket refusal without a reason in writing.
- How long do I have?
- Money claims carry limitation periods, and fund statements get harder to obtain over time. Request the paperwork early even if you have not decided whether to claim.
- What is a 161 form?
- It reports the end of employment to the tax authority and is what releases your pension and severance funds. Ask for it in writing if it does not arrive.