Notice pay & severance calculator
Work out notice-period pay for a notice period the employer did not let you serve, plus a simplified retrenchment severance, from your monthly salary, years of service and notice days.
Based on a simplified reading of the Labour Act 2074 termination and retrenchment provisions. An indicative tool, computed entirely in your browser.
Separation details
Gross monthly salary at the time of separation.
Total continuous years with this employer. Decimals allowed.
Auto-picked from years of service (under 1 year: none, 1–3 years: 30 days, 3–7 years: 60 days, over 7 years: 90 days). Overrides your contract or service rules if different.
Days of notice actually worked before separation. 0 if payment in lieu of notice, no notice served.
Note: severance/retrenchment compensation here uses a simplified one-month-salary-per-completed-year multiple. Actual retrenchment compensation depends on the specific ground for termination and your employer's service rules, gratuity is calculated separately.
Total notice pay + severance
Rs 3,00,000
Rs 1,00,000 notice pay + Rs 2,00,000 severance
Unserved notice
60 days
Monthly salary
Rs 50,000
Years of service
4 yrs
Required notice
60 days
| Unserved notice | max(0, 60 − 0) = 60 days |
| Notice pay | (60 ÷ 30) × Rs 50,000 = Rs 1,00,000 |
| Severance | 4 yrs × Rs 50,000 = Rs 2,00,000 |
| Total | Rs 3,00,000 |
An indicative estimate, computed entirely in your browser. Required notice and severance follow a simplified reading of the Labour Act 2074 termination and retrenchment provisions; gratuity is a separate entitlement and is not included here. Always confirm the exact figure with your employment contract, service rules and current law.
From salary and service years to a separation payout
Two separate figures are added together: notice pay for any unserved notice period, and a simplified severance amount for years served.
Required notice
Auto-picked from years of service (0 / 30 / 60 / 90 days), editable to match your contract or service rules.
Notice pay
Unserved days = max(0, required − served). Notice pay = (unserved ÷ 30) × monthly salary.
Severance
A simplified one month's salary per completed year of service: years × monthly salary.
Notice pay & severance, answered
What is the difference between notice pay, severance and gratuity?+
These are three separate entitlements. Notice pay compensates for a required notice period the employer did not let the employee serve. Severance (retrenchment compensation) is a payout on losing a job through no fault of the employee, such as retrenchment or redundancy. Gratuity is a separate end-of-service benefit tied to years served, unrelated to how employment ended. This calculator covers notice pay and severance; use the gratuity calculator for the third.
How is notice pay calculated here?+
Notice pay = (unserved notice days ÷ 30) × monthly salary, where unserved notice days = max(0, required notice days − notice days actually served). If the employer ends employment immediately without letting the employee work out the notice period, the full required notice is unserved and paid in lieu.
How is severance calculated here?+
This calculator uses a simplified severance multiple of one month's salary per completed year of service (years of service × monthly salary). This is a common simplified estimate only, actual retrenchment compensation depends on the specific ground for termination, the employer's service rules and any collective agreement, so treat this figure as indicative.
When does severance apply?+
Severance/retrenchment compensation typically applies when a job ends for reasons unrelated to the employee's conduct, such as retrenchment, redundancy or the closure of a business unit. It generally does not apply to voluntary resignation or termination for proven misconduct or cause. Check your contract and the Labour Act 2074 provisions for your specific situation.
How is the required notice period decided?+
This tool auto-suggests a required notice period from years of continuous service, a simplified reading of the Labour Act 2074: under 1 year, no notice in this model; 1 to 3 years, 30 days; 3 to 7 years, 60 days; over 7 years, 90 days. You can override the suggested figure with the exact period in your contract or service rules.
Where can I calculate gratuity separately?+
Gratuity is not included in this tool since it is a distinct entitlement. Use the gratuity calculator to estimate that figure from your last-drawn basic salary and years of service.
Sources & data note
Notice period and severance figures are a simplified, indicative reading of the Labour Act 2074 termination and retrenchment provisions and do not constitute legal advice. Actual entitlements depend on the specific ground for termination, your employment contract and the employer's service rules. Gratuity is a separate entitlement and is not computed here, verify all figures with your employer's HR/payroll department or a labour law professional.