Complete guide: how to calculate severance pay

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Calculating severance pay correctly is one of the most important responsibilities for the HR department. When an employment contract comes to an end, it is necessary to meet deadlines and ensure that all amounts owed to the employee are paid correctly.

In this comprehensive guide, we will explain clearly and objectively how to calculate severance pay, as provided for by labor legislation. This will help your company avoid errors and ensure compliance with the CLT.

Continue reading this article to find out more!

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What is termination payment?
First of all, we must know that termination payment is the amount australia whatsapp list that the employer must pay the employee when the employment contract comes to an end, whether due to dismissal, resignation or termination of contract.

Now, this payment includes all labor rights due, such as outstanding wages, unused vacations, proportional 13th salary , guarantee fund (FGTS) and other benefits, in addition to fines or compensation when applicable.

What is the deadline for paying the termination fee?
First of all, it is important to know that the law determines this deadline, and you must comply with it to avoid legal problems and ensure employee satisfaction.

There are ten days and the counting starts from the day after the end of the employment contract.

Likewise, when an employee is dismissed or resigns, the company must pay his/her labor rights within a maximum period of 10 days.

The deadline is provided for in the Consolidation of Labor Laws (CLT) , in its article 477:

Art. 477. Upon termination of the employment contract, the employer must make a note in the Employment and Social Security Card, notify the competent bodies of the dismissal and pay the termination benefits within the period and in the manner established in this article.

§ 6. The delivery to the employee of documents proving the communication of the termination of the contract to the competent bodies, as well as the payment of the amounts stated in the termination instrument or receipt of payment, must be made within ten days from the end of the contract.

It is important to emphasize that after the labor reform there is no longer any difference in the payment term in relation to the type of prior notice.

Does ten consecutive days count Saturday and Sunday?
A common question, without a doubt, is about the counting of the ten calendar days for the company to make the payment. And here we will clarify this issue in a clear and objective way.

It is important to note that Brazilian labor legislation establishes that the employer has a period of ten calendar days to make the payment of the employee's termination. Furthermore, it is important to note that this period also includes Saturdays and Sundays.

It is worth remembering that, if the employer fails to comply with this deadline, they may be subject to fines and other penalties provided for in labor legislation.

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How to do the calculation?
Now, the calculation for the severance pay must be done accurately to ensure that all the employee's rights are paid correctly. Here is a simple step-by-step guide on how to do the calculation:

Calculate the proportional value of the days worked in the month of termination
First, we need to know if the employee worked part of the month. If so, it is necessary to calculate the salary proportional to the days worked.