What is severance pay in Myanmar?
Severance pay in Myanmar is a statutory cash payment owed by the employer to a confirmed employee on employer-initiated termination, set out in Notification 84/2015 under the Employment & Skills Development Law (ESDL) 2013. The amount scales with tenure, starting at 0.5 month's salary at 6 months service and rising to 9+ months at 10+ years.
What Myanmar law says
Severance pay in Myanmar is the statutory cash payment owed by an employer to a confirmed employee when the employer initiates termination — for redundancy, restructure, or any other lawful ground other than gross misconduct. The schedule is set in Notification 84/2015 issued under the Employment & Skills Development Law (ESDL) 2013. Severance is paid on top of notice (or pay in lieu of notice), outstanding wages, and unused leave encashment as part of the full-and-final settlement. It is not owed on resignation, contract expiry of a fixed-term, or gross-misconduct termination.
Severance schedule (employer-initiated termination)
| Tenure | Severance entitlement |
|---|---|
| < 6 months | None |
| 6 months – 1 year | 0.5 month's salary |
| 1 – 2 years | 1 month's salary |
| 2 – 3 years | 2 months |
| 3 – 4 years | 3 months |
| 4 – 5 years | 4 months |
| 5 – 6 years | 5 months |
| 6 – 8 years | 6 months |
| 8 – 10 years | 7 months |
| 10+ years | 9 months + extras for very long tenure |
What severance covers
- Loss-of-job compensation for the employee.
- Calculated on gross monthly salary at the time of termination.
- Paid as a lump sum at final settlement.
- Subject to PIT in the normal way.
- Not refundable if the employee finds new work quickly.
What if there's a dispute
- Township labour office first — the most common ESDL complaint is unpaid or under-paid severance.
- Conciliation Body — formal conciliation under the Settlement of Labour Disputes Law.
- Arbitration Council — final binding step. Statute of limitations: typically 6 months.
Employer takeaway
For every employer-initiated termination, calculate severance from the Notification 84/2015 schedule using gross monthly salary and tenure. Pay severance alongside notice, leave encashment, and outstanding wages within 7 days of the last working day. Withhold PIT, deregister from SSB within 30 days, and keep the calculation worksheet on file for at least 7 years.
Edge cases and unenforceable clauses
- Resignation — no severance owed; see when severance is not payable.
- Fixed-term contract expiry — no severance owed.
- Gross-misconduct termination — no severance, but documentation is essential.
- See severance calculation and who is entitled.
Common severance mistakes
- Paying severance based on basic salary only when the contract states gross.
- Skipping severance for an employee just past 6 months — even 0.5 month is owed.
- Withholding severance pending exit clearance — illegal.
- Counting tenure from confirmation rather than start date.
- Employment & Skills Development Law (ESDL) 2013 — severance provisions
- Notification 84/2015 (or current) — severance schedule
- Settlement of Labour Disputes Law — process and statute of limitations
Related questions
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