Retrenchment Benefit Calculator

Enter your monthly wage and length of service to estimate the minimum retrenchment (termination and lay-off) benefit your employer must pay.

RM

Basic pay plus fixed cash allowances. Annual bonus is left out.

Round to the nearest month.

Advanced
RM

Optional. Your average daily wage over the last 12 months; if blank, monthly wage ÷ 26 is used.

Rates in effect: Employment (Termination and Lay-Off Benefits) Regulations 1980 · JTKSM – Peraturan Faedah Penamatan 1980 ↗

Source: Peraturan-Peraturan Kerja (Faedah Penamatan dan Pemberhentian Sementara) 1980 ↗ · JTKSM – Soalan lazim pemberhentian pekerja ↗

This result is an estimate only. Check with your bank or the relevant authority before making decisions.

How it is calculated

Under the Employment (Termination and Lay-Off Benefits) Regulations 1980:

  • Under 2 years of service: 10 days’ wages for each year
  • 2 to under 5 years: 15 days’ wages a year
  • 5 years or more: 20 days’ wages a year

The band is set by your total length of service and applies to every year. An incomplete year is pro-rated to the nearest month. Benefit = daily wage × days per year × (months of service ÷ 12).

The regulations use your average daily wage over the last 12 months. This calculator uses monthly wage ÷ 26 by default; enter your actual average daily wage if you know it.

Worked example

Wage RM4,000 a month, daily wage RM4,000 ÷ 26 = RM153.85:

Service Days per year Total days Benefit
1 year 6 months 10 15 RM2,307.69
2 years 0 months 15 30 RM4,615.38
3 years 4 months 15 50 RM7,692.31
7 years 9 months 20 155 RM23,846.15
11 months – – Not eligible

Why your number may differ

Your actual average daily wage over the last 12 months may differ from monthly wage ÷ 26, especially if your pay changed. Rounding part-months to the nearest month is this calculator’s simplification. Your contract, a collective agreement or a voluntary separation scheme (VSS) may pay more than this minimum. Notice pay is paid separately.

Frequently asked questions

Who is entitled to a retrenchment benefit?

Employees with at least 12 months' continuous service whose contract is terminated or who are laid off. Retirement, dismissal for misconduct after due inquiry and voluntary resignation do not qualify.

When must the employer pay?

Within 7 days of the termination date, with a written statement of how it was calculated. The benefit is on top of notice pay.

Can the employer pay more?

Yes. The regulations set a minimum only; your contract or a collective agreement may give more.