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Termination pay: Here's what you need to know

by , 31 August 2015
Understanding termination pay and knowing when to pay it can be confusing.

So read this quick guide and understand the basics behind termination pay:


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What is termination pay?

Termination pay is the payment that is legally due to your employee when he[TS1]  leaves you.

When do you have to pay termination pay?

You are required to pay termination pay in the following instances:

·         He resigns, retires or passes away;
·         You retrench him;
·         He deserts you;
·         You dismiss him for misconduct, poor performance or because of illness or disability or incompatibility; or
·         He leaves by agreement with you.

Are there any additional payments that you need to make alongside termination pay?

You will be required to pay him the following in addition to the termination pay he is entitled to:

·         Salary, wages, overtime pay or commission that is due to him for any work done;
·         Any annual leave due to him;
·         Payment to your employee for his pension or provident fund; and
·         Payment for any money that he 'saved up' with you.

So there you have it! But to learn more behind termination pay, click below…


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