A domestic worker is owed severance pay only when employment ends because of retrenchment — the role falls away (for example you move, emigrate or no longer need the help). Severance is at least one week's wage for every completed year of continuous service (BCEA s41). It is on top of notice pay and any leave payout. Severance is NOT owed when a worker resigns, or when they are fairly dismissed for misconduct or poor performance.
What severance is and when it applies
Severance pay is compensation for losing a job through no fault of your own — specifically, retrenchment for operational requirements (BCEA s41). For a household, that typically means you're relocating, emigrating, downscaling, or the work genuinely no longer exists. If the reason for ending the job is operational like that, severance is due.
How much: one week per completed year
The statutory minimum is one week's wage for each completed year of continuous service. So a worker employed for 6 full years is owed at least 6 weeks' wages as severance, calculated on their normal wage. This is separate from — and on top of — their notice pay and the payout of any accrued but untaken annual leave. The termination calculator works out all three.
When severance is NOT owed
Severance does not apply to a worker who resigns, nor to one who is fairly dismissed for misconduct or incapacity/poor performance. It is specifically a retrenchment entitlement. Note too: if you offer the worker reasonable alternative work and they unreasonably refuse it, they can lose the severance entitlement.
Doing a retrenchment properly
Even in a household, a retrenchment should be handled fairly: explain the genuine operational reason, consult the worker, give the correct notice, and pay severance plus the leave payout and final wages. Provide a certificate of service and submit a UI-19 so the worker can claim UIF. See our termination guide for the full process.
Frequently asked questions
How much severance pay does a domestic worker get?
At least one week's wage for every completed year of continuous service, on retrenchment — on top of notice pay and any leave payout.
Is severance owed if my worker resigns?
No. Severance applies only to retrenchment (the role falls away). Resignation and fair dismissal for misconduct do not attract severance.
When would a household ever pay severance?
When the job ends for operational reasons — you're moving, emigrating, downscaling, or the work no longer exists. That's a retrenchment, and severance is due.
Can a worker lose the severance entitlement?
Yes — if you offer reasonable alternative employment and the worker unreasonably refuses it, they can forfeit the severance.
Dignita is a compliance tool, not legal advice. Figures are based on current South African legislation; confirm with a labour-law professional for your situation.