# Retrenchment benefit in Singapore: the norm, eligibility and what else you are paid

> What the tripartite advisory says about retrenchment benefit, who is eligible, how much is usual, which salary to use, and what must be paid on your last day.

- Tool: [Retrenchment Benefit Calculator](https://toolsg.com/en/retrenchment-benefit-calculator)
- Language: en (available: en, zh)
- Last verified against official sources: 2026-10-28
- Source site: ToolSG — a planning guide, not official or financial advice. Cite the agencies listed under Sources.

## Key figures at a glance

| Fact | Value | Source |
| --- | --- | --- |
| Eligibility | 2 years' service or more — Those with less service could be given an ex-gratia payment. | [MOM](https://www.mom.gov.sg/employment-practices/retrenchment/responsible-retrenchment) |
| Prevailing norm | 2 weeks to 1 month's salary per year of service — Depends on the company's financial position and the industry. | [MOM](https://www.mom.gov.sg/employment-practices/retrenchment/responsible-retrenchment) |
| Unionised companies | 1 month's salary per year of service — Where the collective agreement sets the amount. | [MOM](https://www.mom.gov.sg/employment-practices/retrenchment/responsible-retrenchment) |
| Is it the law? | No, it follows your contract or collective agreement — If neither provides for it, the amount is negotiated. | [MOM](https://www.mom.gov.sg/employment-practices/retrenchment/responsible-retrenchment) |
| After a salary cut | Use the salary before the cut — If retrenchment follows shortly after the cut. | [Tripartite Advisory](https://www.mom.gov.sg/-/media/mom/documents/employment-practices/guidelines/tripartite-advisory-on-managing-excess-manpower-and-responsible-retrenchment.pdf) |
| Mandatory notification | Employers with 10 or more employees, within 5 working days — From when the employee is informed of the retrenchment. | [MOM](https://www.mom.gov.sg/employment-practices/retrenchment/responsible-retrenchment) |

## If you are retrenched: what to expect

The sequence and your rights depend on your contract. This is the general picture from MOM.

1. **You are told of the retrenchment** (Notice) — Your employer must notify you according to the termination terms in your contract. Employers with 10 or more employees must notify MOM within 5 working days of informing you. Tools: [Singapore Notice Period Calculator](https://toolsg.com/en/notice-period-calculator)
2. **Check what your contract says** (After notice) — The retrenchment benefit follows your contract or collective agreement. If there is none, the amount is negotiated between the employees, or their union, and the employer.
3. **Compare it with the norm** (Before you agree) — The norm is 2 weeks to 1 month's salary per year of service for those with 2 years or more. Use the salary before any recent cut.
4. **Check your last-day pay** (Last day of work) — Your employer must pay all salary, including unused annual leave and notice pay, on your last day. Tools: [Singapore Annual Leave Entitlement Calculator](https://toolsg.com/en/annual-leave-calculator)

## It is guidance, not a legal formula

Retrenchment benefit is **not set by law**. The amount follows what your **employment contract or collective agreement** provides. If neither does, the amount is negotiated between the employees (through their union if there is one) and the employer. The tripartite advisory sets the usual practice.

## Who is eligible

Employees with **2 years' service or more** are eligible. Those with less could be given an **ex-gratia** payment, which is at the employer's discretion.

## How much is usual

The prevailing norm is **2 weeks to 1 month's salary per year of service**, depending on the company's financial position and the industry norm. In **unionised companies** where the collective agreement sets the amount, the norm is **1 month's salary for each year**.

## How the calculator works

- **Two weeks** is taken as 2 × (12 × monthly salary ÷ 52).
- **One month** is the monthly salary.
- Both are multiplied by your years of service. MOM does not say how part years are counted, so you can pro-rate them or count complete years only.
- If you enter a rate from your contract, it is applied the same way.
- **Unused leave** is paid at MOM's daily rate: 12 × monthly salary ÷ (52 × days worked in a week).

## Worked example

| Item | Amount |
| --- | --- |
| $5,000 a month, 5 years 6 months | 5.5 years |
| Two weeks per year | $12,692.31 |
| One month per year | $27,500.00 |
| 5 unused leave days at $230.77 | $1,153.85 |
| Total range | $13,846.16 to $28,653.85 |

## What else is paid on your last day

Your employer must pay all salary on your last day, including **unused annual leave** and **notice pay**. Notice follows your contract; if it is silent, the Employment Act's minimum applies. Use the notice period calculator.

## Common mistakes

- **Assuming a fixed legal amount.** Check your contract.
- **Using a reduced salary** after a recent cut. The salary before the cut should be used.
- **Forgetting the leave payout.**
- **Treating the norm as a guarantee.** It depends on the company's finances and industry.

## Related tools

- [Notice period calculator](https://toolsg.com/en/notice-period-calculator) — your last day and notice pay.
- [Annual leave calculator](https://toolsg.com/en/annual-leave-calculator) — leave entitlement.
- [Take-home pay calculator](https://toolsg.com/en/take-home-pay-calculator) — gross to net.

## Frequently asked questions

**Is retrenchment benefit required by law?**

No. The amount depends on your contract or collective agreement. The tripartite advisory sets a norm.

**Who is eligible?**

Employees with 2 years’ service or more. Those with less could be given an ex-gratia payment.

**How much is the norm?**

Two weeks to one month’s salary per year of service, depending on the company’s financial position and the industry. One month per year in unionised companies where the collective agreement sets it.

**Which salary is used if mine was cut recently?**

The salary before the cut, if retrenchment follows shortly after a salary cut.

**What else must be paid on my last day?**

All salary, including unused annual leave and notice pay.

**Does my employer have to tell MOM?**

Employers with at least 10 employees must notify MOM within 5 working days of informing an employee of retrenchment.


## Sources

- [MOM — Responsible retrenchment](https://www.mom.gov.sg/employment-practices/retrenchment/responsible-retrenchment) — Eligibility, the norm, salary basis, last-day pay and mandatory notification (page updated 14 Jul 2026).
- [Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment](https://www.mom.gov.sg/-/media/mom/documents/employment-practices/guidelines/tripartite-advisory-on-managing-excess-manpower-and-responsible-retrenchment.pdf) — Annex C: retrenchment benefit eligibility, quantum and adjustments (updated 20 Jan 2023).