When resigning, being laid off or facing closure, check each amount due
Calculate average wages, payment in lieu of notice, severance or long-service payment, and final wages separately. Similar-sounding entitlements are not always payable together and depend on the reason for termination, contract and service period.
What you should know at the end
By the end, you should have an itemised checklist to compare with the employer's calculation and know which figures require payslips, the contract or official confirmation.
0 of 4 steps opened
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- 1Gather 12 months of wage records
- 2Check the notice period
- 3Determine severance or long-service payment
- 4Allow for tax and reconcile final payments
Work through the decision
- 1
Gather 12 months of wage records
After commissions, allowances and unpaid leave, what is the average wage?
Many statutory entitlements use a 12-month average-wage concept, not simply the latest monthly salary. Gather payslips, commission and leave records first.
Calculate average wages - 2
Check the notice period
Do the contractual notice period, actual notice and payment in lieu agree?
Check the employment contract and termination date, and identify which party ended the contract. Summary dismissal, probation and contract terms may change the treatment.
Estimate payment in lieu - 3
Determine severance or long-service payment
Which statutory entitlement fits the reason and length of service?
Both are generally not payable for the same service period. Check redundancy, lay-off, contract expiry, age and health conditions, then consider the transition after abolition of MPF offsetting.
Calculate severance or LSP - 4
Allow for tax and reconcile final payments
How may untaken leave, bonus and termination payments affect this year's tax?
List final salary, untaken leave pay, commission and other payments separately. Tax treatment of particular termination payments may differ, so confirm uncertain items with the IRD or a professional.
Estimate salaries tax
Before making the decision
- Are payslips, the employment contract, termination notice and leave records complete?
- Did the employer use monthly salary or the statutory average-wage basis?
- Is the final payment itemised rather than shown as one total?
What the calculators cannot decide
- Statutory entitlement depends on the full facts; a calculator cannot determine an employment dispute.
- If the employer's view differs, retain records and contact the Labour Department or a qualified adviser.
Explore another decision route
Planning estimates only. Review the inputs, assumptions and official sources on each calculator before acting.