How is final salary settlement calculated in Myanmar?
Myanmar final settlement comprises outstanding wages to last working day + accrued leave encashment + notice pay (if applicable) + statutory severance under Notification 84/2015 (if employer-initiated termination after 6 months) + contractual gratuity (if owed) + any owed bonus, less PIT, SSB, and any consensual deductions. Settlement is due within 7 days of last working day.
What Myanmar law says
The Myanmar final settlement on exit is the sum of contractual and statutory entitlements, less lawful deductions:
- Wages for days worked in the final cycle.
- Leave encashment for unused annual / earned leave.
- Notice pay (in lieu) where applicable, per ESDL 2013 / Notification 84/2015 schedule.
- Severance per Notification 84/2015 if employer-initiated termination after 6 months service.
- Contractual gratuity, bonus, or 13th-month where the contract or policy commits.
- Less: PIT (gross-up at marginal rate), SSB up to cap, agreed advances, court-ordered garnishments.
Pay within 7 days of last working day under common practice.
Worked example — 4-year exit, employer-initiated, MMK 800,000/mo basic
| Component | Calculation | Amount (MMK) |
|---|---|---|
| Final-month wages (15 days worked) | 800,000 × 15 ÷ 26 | 461,538 |
| Leave encashment (8 unused EL days) | 8 × (800,000 ÷ 26) | 246,154 |
| Notice pay in lieu (1 month) | 1 × 800,000 | 800,000 |
| Severance (4 yrs band — 4 months) | 4 × 800,000 | 3,200,000 |
| Contractual 13th-month pro-rata (8/12) | (8 ÷ 12) × 800,000 | 533,333 |
| Gross final settlement | — | 5,241,025 |
| Less: PIT on YTD + lump sum (gross-up) | per Union Tax Law brackets | (see PIT calculator) |
| Less: SSB (cap reached for the month) | 2% × 300,000 | (6,000) |
| Less: outstanding salary advance | per agreement | (150,000) |
| Net final settlement | — | ~ 4,800,000+ |
Documentation requirements
- Final settlement statement signed by employer and employee.
- Last drawn payslip + leave balance + severance band reference.
- PIT remitted to IRD by the 15th of the following month.
- Record retention: at least 7 years.
Edge cases
- Resignation — no severance; notice pay applies if the employee leaves before notice period.
- Gross misconduct — no severance; document cause carefully.
- Death-in-service — pay to nominee; SSB survivors' benefit also applies.
- Probation termination — wages + accrued leave + 2-week notice equivalent.
- Bonus deferred to year-end — releases after the bonus pay date if contractually owed.
- Foreign-currency-paid roles — convert at CBM rate on settlement date.
Employer takeaway
Final settlement = wages + leave encashment + notice pay + severance + contractual gratuity − PIT − SSB − agreed offsets. Pay within 7 days of last working day. Withhold PAYE on the gross-up at the marginal rate, remit to IRD by the 15th, and itemise on the settlement statement. Cannot be withheld pending exit clearance. Retain records 7 years.
Common payroll mistakes
- Forgetting leave encashment in the final settlement.
- Using last 12-month average instead of last drawn for severance (see gratuity calculation).
- Skipping PAYE gross-up on the lump sum.
- Withholding settlement pending exit clearance (see withhold for exit clearance).
- Missing the 7-day window (see final settlement timeline).
- ESDL 2013 — final settlement components
- Notification 84/2015 — severance schedule
- Payment of Wages Law — settlement timing
Related questions
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