Resigning from a job can be exciting, but it’s crucial to understand your legal entitlements. This article breaks down exactly what your employer owes you when you resign in South Africa, from leave payouts to notice pay and retirement funds. Avoid common myths and make sure your finances are in order before you walk out the door.
You’ve found a new job, drafted your resignation letter, and are ready to hand it in. Amid the excitement of a new chapter, confusion often arises around your final payout. Will you receive any money?
What happens to your leave days? Is a package included? There are many myths about resignation payouts.
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To ensure you don’t leave money behind—or expect money that isn’t due—here is a clear breakdown of what your employer legally owes you when you resign in South Africa. Let’s clarify this first: you are not entitled to severance pay if you resign. Severance pay (typically one week’s pay for every year of service) applies only in cases of retrenchment—that is, dismissal based on operational requirements.
Because resignation is a voluntary act, your employer is not legally obliged to offer a separation package or a “golden handshake”, regardless of how long you’ve been with the company. This is usually the most significant item on your final payslip. In terms of the Basic Conditions of Employment Act (BCEA), you must be paid out for any statutory annual leave you’ve accumulated but not taken.
Calculation: The payout is based on your daily wage. For example, if you earn R1,000 per day and have 10 days’ leave remaining, you should receive R10,000 (subject to tax). Limitation: Your employment contract may contain clauses about excess leave.
While the law protects your minimum statutory leave (15 working days per annum), some contracts state that any additional leave carried over from previous years is forfeited upon resignation. If you work your notice period, you receive your normal salary for that duration.
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