Retrenchment Benefits Calculator 2026

Your minimum termination or lay-off benefit under the Employment (Termination and Lay-Off Benefits) Regulations 1980.

RM
Continuous service with the same employer, up to your last day of work.
Update Notes
  • 11 Jul 2026: Initial release. Benefits follow the Employment (Termination and Lay-Off Benefits) Regulations 1980: 10 days' wages per year of service for 1 to under 2 years, 15 days for 2 to under 5 years, 20 days for 5 years or more, pro-rated to the nearest month for an incomplete year, at the ordinary rate of pay (monthly wages / 26).

About the Retrenchment Benefits Calculator

If you are retrenched, laid off, or your contract is terminated (other than for misconduct or voluntary resignation), the Employment (Termination and Lay-Off Benefits) Regulations 1980 set a minimum payout: 10 days' wages per year of service for 1 to under 2 years of service, 15 days for 2 to under 5 years, and 20 days for 5 years or more - pro-rated for the incomplete year, at the ordinary rate of pay (monthly wages divided by 26).

Employers: manage terminations compliantly - notice periods, final pay and benefits - with HRWork.

Frequently Asked Questions

How much is retrenchment benefit in Malaysia?
Under the 1980 Regulations, the minimum is 10 days' wages per year of service if employed for 1 to under 2 years, 15 days for 2 to under 5 years, and 20 days for 5 years or more - pro-rated for an incomplete year, at the ordinary rate of pay (monthly wages / 26).
Who qualifies for termination benefits?
Employees within the Employment Act's termination benefit scope (broadly those earning up to RM4,000 a month or in manual work) with at least 12 months of continuous service. Employees dismissed for misconduct or who resign voluntarily do not qualify.
Can my contract give more than the 1980 Regulations?
Yes. The Regulations set the minimum. Many employment contracts, collective agreements and VSS schemes pay more - often one month per year of service.
Are retrenchment benefits taxable?
Compensation for loss of employment enjoys a tax exemption of RM10,000 per completed year of service (higher full exemptions apply in cases like ill health). Amounts beyond the exemption are taxable.

Minimums per the Employment (Termination and Lay-Off Benefits) Regulations 1980, which apply to employees within the Employment Act's termination benefit scope with 12+ months of continuous service. Contracts and VSS schemes may pay more; eligibility depends on the reason for termination. Refer to JTKSM (Labour Department) for official guidance.