Use this severance pay calculator to find out exactly what you’re owed:
How to use:
- Enter your monthly gross salary (basic pay before deductions)
- Enter complete years worked
- Enter additional months worked (if any)
- Select reason for leaving (redundancy, contract expiry, resignation, dismissal, retirement, mutual agreement)
- Enter unused leave days
- Enter notice period given in months
- View results: compensation amount, leave pay, notice pay, total benefits, tax, net payment, breakdown, and legal advice
Can You Afford to Leave Without Knowing This? #
You’ve worked 5 years. Your company is downsizing. Your boss says “We’ll pay you something.” But how much? Without this severance pay calculator, you’re guessing – and guesses lead to accepting whatever they offer, losing thousands you legally earned.
Most people think “I’ll just take what they give me.” But after you realize they underpaid you by KES 100,000, it’s too late to fight back.
This severance pay calculator shows exactly what you’re owed based on Kenya’s Employment Act 2007: severance (15 days per year), leave pay, notice pay, tax implications, and your actual take-home.
What Is Severance Pay in Kenya? #
It’s compensation when your job becomes redundant. Calculated as 15 days of pay for every year worked, mandated by the Employment Act 2007.
What it means:
- Legal compensation for losing your job through no fault of your own
- 15 days pay × years of service
- Separate from leave pay and notice pay
- Mandatory for redundancy, retirement, and mutual agreement
- Not owed for resignation, contract expiry, or dismissal for misconduct
Read the full Employment Act 2007 for complete details. Understanding your employment rights helps you know what else you’re entitled to.
Who Qualifies for Severance Pay? #
The severance pay calculator handles six termination scenarios and determines your eligibility:
Redundancy/Retrenchment (QUALIFIES) #
Formula: (Monthly Salary ÷ 30) × 15 days × Years of Service
Company downsizes, restructures, or eliminates your position. This is the most common severance pay scenario in Kenya.
Example – KES 50,000 salary, 4.5 years:
- Daily rate: 50,000 ÷ 30 = 1,667 KES
- Amount owed: 1,667 × 15 × 4.5 = 112,500 KES
Retirement (QUALIFIES) #
Same formula – 15 days per year as compensation. Service gratuity when you reach retirement age. Check for pension scheme benefits alongside your terminal package.
Example – KES 80,000 salary, 20 years:
- Daily rate: 80,000 ÷ 30 = 2,667 KES
- Amount owed: 2,667 × 15 × 20 = 800,000 KES
Mutual Agreement (QUALIFIES) #
Negotiable compensation, minimum 15 days per year. Both parties agree to part ways. Get terms in writing. Many employees negotiate higher amounts than the statutory minimum.
Example – KES 100,000 salary, 3 years, negotiated 20 days:
- Daily rate: 100,000 ÷ 30 = 3,333 KES
- Negotiated amount: 3,333 × 20 × 3 = 200,000 KES
Contract Expiry (DOES NOT QUALIFY) #
Fixed-term contract ending naturally means no compensation owed. Only accrued leave pay and outstanding salary. Exception: renewed 3+ times may grant permanent rights and eligibility.
Resignation (DOES NOT QUALIFY) #
Voluntary leaving means no compensation. Must give required notice or forfeit salary. Exception: constructive dismissal if employer forced you out may entitle you to benefits.
Dismissal for Misconduct (DOES NOT QUALIFY) #
Terminated for gross misconduct means no compensation. Can claim unfair dismissal if proper procedure wasn’t followed. Successful claims may result in awards.
What’s Included in Your Severance Pay Package? #
The severance pay calculator shows your complete terminal benefits package:
1. Severance Pay (if qualified):
- 15 days × years of service
- Only for redundancy, retirement, mutual agreement
- This is your main entitlement
2. Accrued Leave Pay:
- All unused annual leave days at current daily rate
- Everyone gets this regardless of leaving reason
- Separate component
3. Notice Pay (Payment in Lieu):
- 1 month salary if employer didn’t give 28 days notice
- Only if employer terminated you
- Added to your package if applicable
4. Tax:
- First KES 500,000 tax-free
- Excess taxed at 30%
Complete severance pay example:
Made redundant after 5 years, KES 60,000 salary, 15 unused leave days, no notice:
- Severance: (60,000 ÷ 30) × 15 × 5 = 150,000 KES
- Leave: (60,000 ÷ 30) × 15 = 30,000 KES
- Notice: 60,000 × 1 = 60,000 KES
- Gross total: 240,000 KES
- Tax: 0 KES (under 500K threshold)
- Net payment: 240,000 KES
Real Severance Pay Calculation Examples #
Example 1: Junior Employee Redundancy #
KES 35,000 salary, 2.5 years, 10 unused leave days, no notice
- Daily rate: 1,167 KES
- Severance: 1,167 × 15 × 2.5 = 43,750 KES
- Leave: 1,167 × 10 = 11,670 KES
- Notice: 35,000 KES
- Total: 90,420 KES (tax-free)
Payment due within 7 days. Redundancy must be genuine with fair selection.
Example 2: Mid-Career Mutual Agreement #
KES 75,000 salary, 6.25 years, 21 unused leave days, notice served
- Daily rate: 2,500 KES
- Severance: 2,500 × 15 × 6.25 = 234,375 KES
- Leave: 2,500 × 21 = 52,500 KES
- Notice: 0 KES (served)
- Total: 286,875 KES (tax-free)
Get mutual agreement in writing. Negotiate better than statutory minimum.
Example 3: Senior Employee Retirement #
KES 120,000 salary, 18 years, 28 unused leave days
- Daily rate: 4,000 KES
- Severance: 4,000 × 15 × 18 = 1,080,000 KES
- Leave: 4,000 × 28 = 112,000 KES
- Gross total: 1,192,000 KES
- Tax: (1,192,000 – 500,000) × 30% = 207,600 KES
- Net: 984,400 KES
Claim NSSF benefits alongside terminal package. First 500K tax-free, remainder at 30%.
Example 4: Contract Worker – No Compensation #
KES 45,000 salary, 1.67 years, 12 unused leave days
- Severance: 0 KES (not eligible – contract expiry)
- Leave: 1,500 × 12 = 18,000 KES
- Total: 18,000 KES
Contract expiry doesn’t qualify. If renewed 3+ times, may have permanent rights and eligibility.
Example 5: Resignation – No Compensation #
KES 55,000 salary, 3.75 years, 18 unused leave days
- Severance: 0 KES (voluntary resignation – not eligible)
- Leave: 1,833 × 18 = 32,994 KES
- Total: 32,994 KES
No compensation for voluntary resignation. Give required notice to avoid deductions.
Want more scenarios? Check real-world examples covering different salary levels and situations.
Common Severance Pay Calculation Mistakes #
Mistake 1: Using Net Instead of Gross Salary Calculating with take-home (40,000 KES) instead of gross (50,000 KES). Terminal benefits use gross salary.
Mistake 2: Forgetting Tax on Large Amounts Expecting 1.2 million but getting 984,000 KES. First 500K is tax-free, remainder taxed at 30%. Use our PAYE tax calculator for accurate estimates.
Mistake 3: Assuming All Terminations Qualify Resigning and expecting compensation. Only redundancy, retirement, and mutual agreement qualify.
Mistake 4: Not Claiming Leave Pay Accepting your package but forgetting 20 unused days worth 35,000 KES. Leave is separate – everyone qualifies.
Mistake 5: Accepting Verbal Promises Believing “We’ll pay 80,000 KES” without verification. Get agreement written. Use calculator to confirm legal amount.
What to Do If Employer Refuses Severance Pay #
Step 1: Request Written Confirmation Email HR requesting written calculation. Creates paper trail for your claim.
Step 2: Use Calculator as Evidence Screenshot showing legal entitlement. Present to HR as proof of correct amount.
Step 3: File Labour Office Complaint Visit Ministry of Labour and Social Protection offices. Filing complaints is free.
Step 4: Gather Documents Employment contract, payslips (6 months minimum), termination letter, emails, calculator screenshot.
Step 5: File Within 3 Months 3-month deadline from termination for claims. Employment Court handles unresolved cases.
Step 6: Contact Union Workplace union provides lawyers experienced with disputes.
Understanding Your Severance Pay Calculator Results #
Payment Breakdown Shows:
- Termination reason and eligibility
- Service period (years + months)
- Daily rate calculation
- Severance formula and amount
- Leave calculation
- Notice (if applicable)
- Total benefits before tax
- Tax (first 500K free, excess 30%)
- Net payment (take-home)
Legal Advice Covers:
Redundancy: 15 days per year right, 28-day notice requirement, fair selection criteria (LIFO or skills-based), employer consultation obligation.
Contract Expiry: No compensation for natural expiry, 3+ renewals may grant permanent rights and eligibility, accrued leave entitlement.
Resignation: No compensation for voluntary leaving, notice period requirement, salary deduction for missing notice.
Dismissal: No compensation for misconduct, unfair dismissal claim if improper procedure, hearing and response rights required. Successful claims may result in awards.
Retirement: Service gratuity applies as compensation, NSSF pension benefits, employer pension scheme check.
Mutual Agreement: Written terms required, negotiable above minimum, both parties must agree on amount.
General Entitlements:
- Accrued leave for unused days (mandatory, separate component)
- Certificate of service for future jobs
- 500K tax-free on terminal benefits, excess 30% tax
- Payment within 7 days of termination
- NSSF & NHIF clearance by employer
- Company property clearance
Using Our Severance Pay Calculator #
Severance pay isn’t a favor – it’s a legal right under Kenya’s Employment Act 2007.
Remember:
- Use gross salary for calculations, not net
- First 500,000 KES tax-free on terminal benefits
- Payment due within 7 days of termination
- Get agreement written before signing
- File complaint within 3 months if underpaid
- Different from service pay (retirement)
Wrong calculations mean losing thousands. Employers count on you not knowing the law. This calculator prevents underpayment.
If changing jobs, use our salary calculator to evaluate new offers and rent affordability calculator to budget for housing on your new income.
Related Tools & Resources #
PAYE Tax Calculator #
Tax on terminal benefits and regular salary. First 500K tax-free, excess 30%.
Net Pay Calculator #
Take-home after deductions (PAYE, NSSF, NHIF, Housing Levy). Use for job offer evaluation.
Rent Affordability Calculator #
Affordable rent based on income and expenses. Use when moving after job change.