Calculate severance pay in Kenya

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Severance pay calculator in Kenya

Severance pay in Kenya

Section 35 states that an employee is entitled to service pay for every year worked when their contract of service is terminated and when he or she is not member of any form of pension scheme including the National Social Security Fund.
Severance pay is the compensation and/or benefits an employer provides to an employee after employment is over. Severance packages may include extended benefits, such as health insurance and outplacement assistance to help an employee secure a new position.
Is severance pay mandatory in Kenya? Before termination of an employee's contract on account of redundancy, the employer is required to pay the affected terminal benefits calculator to help the employee find his severance pay which is calculated at fifteen (15) days' pay for each completed year of service, in addition to all other terminal dues.
Calculating the severance pay is done by dividing the employee’s monthly pay by 30 days to get the pay per day. Similarly, multiplying the pay per day by 15 days and finally by the total number of years in service. If on the other hand, the contract of employment provided a higher severance pay than the one under the Act. The employer must pay the higher amount. If the contract provided a lower pay, then the employer pays the one stipulated under the Act.
How do most companies calculate severance pay? Most organizations choose to give around four weeks' pay for each year the person has been employed (so someone who has worked there for three years would get 12 weeks' pay, for example). Calculating severance this way will reward the employees for their loyalty and tenure.
What is the difference between service pay and severance pay? Service pay is similar to gratuity save that service pay is paid out at the end of employment while gratuity can be paid at the end of every year or at any time if the employer so wishes. Severance pay, as discussed last week, together with VAT which is only paid when an employee is declared redundant.
Difference between gratuity and severance pay Severance is paid when an employee is declared redundant. Gratuity is a lump sum amount that an employer pays an employee if he/she retires or resigns from employment. An employee does not contribute any portion of her salary towards this amount.