Sources on South African retrenchment describe a consistent set of employer errors. Knowing them means you can check your own calculation.
One: using basic salary instead of remuneration
The most common by a wide margin. Severance is calculated on remuneration, which includes regular cash allowances and employer contributions to medical aid and retirement.
Basic salary alone understates the figure, and the employer faces an order to pay the shortfall plus interest.
Two: ignoring the 13-week average
For commission earners and those with regular overtime, a 13-week average applies. Using a single quiet month produces a lower result.
Three: the wrong leave divisor
Leave payouts use monthly salary ÷ 21.67. Employers using 30 understate every leave day.
Four: treating severance as covering notice
Notice pay under Section 37 and severance under Section 41 are separate. Both are owed.
Five: missing the seven-day deadline
The certificate of service, IRP5 and final payments are due within seven days of termination or on the next scheduled pay date.
Delay here is a statutory breach, and the certificate of service is what you need to claim UIF.
Your verification checklist
- Does the remuneration figure include allowances and employer contributions?
- Was a 13-week average used if you earn variable pay?
- Were only fully completed years counted, rounding down?
- Was the leave divisor 21.67?
- Is notice pay shown separately from severance?
- Did you receive the certificate of service and IRP5?
A dispute about the severance amount has its own route under Section 41(6) — to a bargaining council if one covers you, otherwise the CCMA — and is not bound by the 30-day dismissal deadline.
The proposed increase
The Labour Law Amendment Bill, 2025 proposes doubling the minimum to two weeks per year. It is not yet in force, so current calculations use one week.