Severance Pay Calculator

Detailed breakdown of all terminal benefits payable on termination of employment.

Statutory notice periods under the Zambian Employment Code Act 2019.

Minimum Notice Periods (by length of service)

Key Notice Period Rules

• Written notice required: Notice must be in writing and clearly state the termination date
• Payment in lieu: Either party can pay instead of working the notice period
• Contract may provide more: Employment contracts can specify longer notice periods than the statutory minimum
• Summary dismissal: No notice required in cases of gross misconduct (after due process)
• Probation period: Shorter notice typically applies during probation
• Collective agreements: Union agreements may provide enhanced notice periods

Summary of terminal benefits under the Zambian Employment Code Act No. 3 of 2019.

Redundancy / Retrenchment (Section 27)

Unfair Dismissal (Section 16)

Retirement Benefits

• NAPSA Pension: Paid by NAPSA upon reaching retirement age (55+)
• Gratuity: If contract provides for it, paid at end of service
• Accrued leave: Must be paid out on retirement
• No severance pay: Retirement is voluntary, so no redundancy pay

Death in Service

• NAPSA Death Benefit: Paid to nominated beneficiaries
• Accrued leave: Paid to estate
• Outstanding salary: Paid to estate
• Gratuity (if applicable): Paid to estate
• Repatriation costs: Employer may cover transport of body and family

Certificate of Service (Section 18)

On termination, employers MUST provide a certificate stating:

• Employee’s full name
• Description of work performed
• Date employment started and ended
• Rate of pay at termination

How is severance pay calculated in Zambia?

Under the Employment Code Act 2019, severance pay for redundancy is calculated as 2 months’ basic pay for each completed year of service, provided the employee has worked for at least 2 years. For example, an employee with 5 years of service earning K10,000/month would receive: 5 × 2 × K10,000 = K100,000.

Do I get severance pay if I resign?

Generally, no. Severance pay is only payable in cases of redundancy, retrenchment, or sometimes unfair dismissal. Voluntary resignation does not qualify for severance pay, though you are still entitled to accrued leave pay and any outstanding salary.

What is “payment in lieu of notice”?

Instead of working the notice period, either party can pay the equivalent salary. For example, if your notice period is 1 month and your salary is K10,000, the employer can pay you K10,000 and terminate immediately. This is common in redundancy situations.

Is my accrued leave paid on termination?

Yes. Under Zambian law, any accrued but untaken annual leave must be paid out on termination. The calculation is: (Monthly Salary ÷ Working Days per Month) × Untaken Leave Days. For a 5-day week: (K10,000 ÷ 21.67) × 10 days = K4,614.

How long does my employer have to pay my terminal benefits?

Terminal benefits should be paid on or before the last day of employment, or within a reasonable time (typically 7-14 days). NAPSA benefits are processed separately and may take several months.

What if my employer refuses to pay severance?

You can:

1. First, raise the issue with your employer in writing
2. If unresolved, report to the nearest Labour Office
3. The Labour Officer can mediate or issue a compliance order
4. If still unresolved, refer the matter to the Industrial Relations Court
5. You have up to 3 years from the date of termination to file a claim

Is severance pay taxable?

It depends. Redundancy payments may be partially exempt from PAYE under certain conditions, but this is complex. Consult ZRA or a tax advisor for your specific situation. NAPSA benefits are handled separately and have their own tax treatment.

What happens to my NAPSA contributions when I leave?

Your NAPSA contributions remain in your account. You can:

• Leave them until retirement age (55+)
• Transfer to a new employer’s NAPSA account when you get a new job
• Claim a withdrawal benefit if you emigrate permanently
• Claim disability benefit if applicable

Can I negotiate a better severance package?

Yes. The statutory minimums are just that — minimums. Many employers offer enhanced packages, especially for senior employees or in cases of large-scale retrenchment. You can negotiate for additional benefits like extended medical coverage, outplacement services, or additional months’ pay.

What is the difference between severance pay and gratuity?

Severance pay is a statutory payment for redundancy based on years of service. Gratuity is a contractual lump sum paid at the end of employment, typically in lieu of pension contributions. Not all employees are entitled to gratuity — it depends on your contract.

Do fixed-term contract employees get severance pay?

Generally, no. When a fixed-term contract expires naturally, it’s not considered termination, so no severance pay is due. However, if the contract is terminated early by the employer (before expiry), the employee may be entitled to payment for the unexpired period plus other benefits.