When is a worker entitled to severance pay?

Severance is owed for economic dismissal (redundancy), abusive dismissal (without legitimate cause), or conventional termination. It is not owed for resignation or disciplinary dismissal justified by serious misconduct.

How is seniority calculated?

Seniority runs from the hiring date to the termination date, including paid leave, sick leave, and training periods. Partial seniority is prorated (6 months = 0.5 years).

What counts as abusive dismissal?

Abusive dismissal is termination without legitimate cause or in violation of legal procedures. Per article 73-4 of law 90-11, the worker is entitled to at least 6 months of salary, plus damages assessed by the court.

Is severance pay taxable?

Severance pay is exempt from income tax (IRG) up to the legal minimum. Amounts exceeding the legal floor may be subject to income tax. Severance is also exempt from CNAS social contributions.

What if seniority is less than 1 year?

A worker with less than 1 year receives a prorated indemnity: e.g. 6 months = 0.5 months of seniority indemnity. However, the legal minimum still applies: 3 months (economic) or 6 months (abusive), so the worker receives the minimum in most cases.

What is the indemnity for conventional termination?

In a conventional termination (rupture conventionnelle), the parties negotiate the amount, but it cannot be less than the economic dismissal indemnity (1 month per year of seniority, minimum 3 months). This ensures a basic protection floor for the worker.

Salary calculators

Severance Pay Calculator

Calculate your severance pay by dismissal type: economic (min. 3 months) or abusive (min. 6 months) — per Algerian labour law 90-11.

Per official rate schedules · 2026

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Monthly salary

Average gross salary over the last 12 months (DZD)

Years of seniority

per year

Length of service with the same employer (decimals accepted: 2.5 = 2 years and 6 months)

Dismissal type

Total severance indemnity

250,000DA

Legal minimum60%

Seniority indemnity40%

Reference salary50,000DA

Years of seniority5

Dismissal typeEconomic dismissal

Coefficient (months/year)1

Seniority indemnity250,000DA

Legal minimum150,000DA

Total severance indemnity250,000DA

Monthly equivalent4,167DA

Legal minimum (months)3

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How it works

Enter your reference monthly salary (average of the last 12 months) and your years of seniority.
Choose the dismissal type: economic (minimum 3 months) or abusive (minimum 6 months).
The seniority indemnity, legal minimum, and total severance due are calculated instantly.

Sources: labour code, law 90-11 (Articles 73, 73-bis, 73-4) — Official Gazette — MTESS.

Frequently asked questions

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