Severance Payment / Long Service Payment Calculator

Severance payment and long service payment use a similar formula, but they are different legal routes. Severance payment is mainly about redundancy, lay-off or a fixed-term contract that is not renewed because of redundancy, and normally needs 24 months under a continuous contract. Long service payment covers other qualifying endings, including dismissal other than for serious misconduct, a non-redundancy non-renewal, resignation at 65 or above, resignation for certified permanent unfitness, or death in service, and normally needs five years. The same period of service does not attract both payments.

An ordinary resignation before 65, or a summary dismissal for serious misconduct, generally qualifies for neither. Long service is not automatic just because the years are long. Decide the termination reason first, then apply the last-month wage, the two-thirds factor, the wage cap and the overall cap.

1 May 2025 is the offsetting transition date. Employer mandatory MPF accrued benefits may still reduce the portion earned before that date under the transitional rules. Service from that date is not offset by those benefits. This page applies an entered offset only to the pre-transition portion. It does not decide voluntary contributions, gratuities or other special cases.

Commission, fluctuating wages, incomplete months and whether the contract was continuous can all change the figure. Use employment records and the Labour Department calculation. Keep the contract, wage statements and termination papers if the amount is disputed.