Employees with at least 2 years of service are eligible for retrenchment benefit under the prevailing tripartite guidance; those with less than 2 years may receive an ex-gratia payment.
The prevailing norm is 2 weeks to 1 month’s salary per year of service; the actual amount depends on the employment contract, collective agreement or negotiation.
Total Compensation
0 weeks’ salary
Estimated Retrenchment Benefit
S$0.00
This is an estimate based on the compensation rate selected above.
Disclaimer: Estimate only; actual retrenchment benefits depend on your contract, collective agreement or negotiation with your employer.
A Singapore Retrenchment Compensation Calculator helps employees estimate a possible retrenchment benefit using their salary, length of service and the compensation formula entered.
The result is only an estimate. Your actual payment depends on your employment contract, collective agreement, negotiated terms and the employer’s financial position.
How to Use the Calculator
Enter your salary, completed years of service and the compensation rate requested by the calculator.
Check the information carefully, then select Calculate to view the estimated benefit. Use Reset if you want to try another amount.
Do not treat the result as a confirmed payout. Compare it with the written retrenchment terms provided by your employer.
Who May Receive Retrenchment Benefits?
Employees who have served an employer for at least two years are generally eligible for a retrenchment benefit under Singapore’s retrenchment guidance.
An employee with less than two years of service may receive an ex-gratia payment. However, this depends on the employer.
Eligibility does not mean that every employee will receive the same amount.
How Is Retrenchment Compensation Calculated?
First, check your employment contract or collective agreement. It may already state the applicable retrenchment-benefit formula.
When no amount is stated, the employer and employee or union may need to negotiate the benefit.
The prevailing norm mentioned by MOM is generally between two weeks and one month of salary for each year of service. The actual amount may depend on the company’s financial position and industry.
If the employer gives notice of termination, the Notice Period Calculator Singapore can help estimate the final working date separately.
What May Be Included in a Final Payment?
A final employment payment can contain several different items. These may include:
- salary up to the final working day;
- salary in lieu of notice, where applicable;
- payment for unused annual leave;
- contractual payments; and
- a retrenchment benefit or ex-gratia payment.
These items should not automatically be treated as one retrenchment-benefit amount.
You can use the Salary Calculator Singapore when reviewing estimated salary figures.
If unused leave forms part of the final settlement, the Annual Leave Calculator Singapore may help you review the relevant leave period.
Is Retrenchment Compensation Taxable?
The tax treatment depends on what each payment is for.
A genuine payment made to compensate for the loss of employment may be treated differently from salary, gratuity, payment in lieu of notice or payment for past services.
Do not assume that the entire retrenchment package is tax-free. Check the payment breakdown and seek clarification from the employer or IRAS when necessary.
Important Checks Before Relying on the Estimate
Read your employment contract, retrenchment letter and any collective agreement.
Confirm the salary figure, completed service period and compensation rate used by the employer. Ask for a written breakdown of the final payment.
Employees on maternity leave or with maternity-related protections should also review the applicable rules. Our Maternity Leave Calculator Singapore can help with date planning, but it does not determine retrenchment rights.
Where the final payment includes overtime, use the Overtime Calculator Singapore only as an estimate and compare it with the employer’s records.
Frequently Asked Questions
Q1: Is retrenchment compensation compulsory in Singapore?
A: The Employment Act does not prescribe one fixed retrenchment-benefit amount for every employee. The applicable benefit may come from an employment contract, collective agreement or negotiation.
Q2: How much retrenchment benefit will I receive?
A: There is no single amount for everyone. MOM states that the prevailing norm is generally between two weeks and one month of salary per year of service, depending on factors such as the industry and company’s financial position.
Q3: Can an employee with less than two years of service receive a benefit?
A: The employer may provide an ex-gratia payment, but it is not automatically guaranteed.
Q4: Is salary in lieu of notice the same as a retrenchment benefit?
A: No. They are separate payments. Salary in lieu of notice relates to an unserved notice period, while a retrenchment benefit relates to the loss of employment.
Q5: Is every part of a retrenchment package tax-free?
A: No. Tax treatment depends on the purpose of each payment. Salary, gratuity or payment for past services may be treated differently from genuine compensation for loss of employment.
Q6: Does the calculator confirm my legal entitlement?
A: No. It only estimates an amount using the details entered. Written employment terms and applicable Singapore rules determine the actual payment.
Q7: Should I ask my employer for a payment breakdown?
A: Yes. A written breakdown can help you identify salary, notice pay, leave payment, retrenchment benefit and other components.
More Singapore employment and financial-planning tools are available on Calculator Singapores.
Official Singapore Sources
Review the MOM explanation of retrenchment benefits for eligibility and prevailing benefit norms.
For tax questions, check IRAS guidance on retrenchment benefits.