Severance Calculation Guide
Understanding severance calculation according to Moroccan labor law
This guide explains in detail how severance pay is calculated in Morocco. For practical examples, see the FAQ or read the relevant legal articles.
Overview of Severance Pay Calculation
The calculation of severance pay in Morocco is governed by the Moroccan Labor Code, particularly Articles 51 to 59 for severance pay, Article 43 for notice pay, and Article 232 for vacation pay. These provisions apply to all private sector employees with at least 6 months of continuous seniority with the same employer.
The 4 Components of Severance Pay
1. Current Month Salary
Corresponds to salary for days worked in the departure month, calculated proportionally. If you have unpaid days (unjustified absences), they are deducted from the monthly salary.
2. Unused Vacation Pay (Article 232)
Each employee is entitled to 1.5 days of leave per month of actual work (18 days per year). The compensatory allowance is calculated based on average daily salary.
Formula: (Monthly salary × Number of unused vacation days) ÷ 26 working days
3. Notice Pay (Article 43)
Notice period duration varies according to your occupational category and seniority:
- Employees/workers: 8 days if seniority < 1 year, 1 month if ≥ 1 year
- Managers and supervisors: 1 month if seniority < 1 year, 3 months if ≥ 1 year
If the employer waives the notice period, they must pay you compensatory allowance.
4. Severance Pay (Articles 52-53)
This is the main indemnity, calculated according to your seniority in progressive brackets. See details below.
Detailed Severance Pay Calculation by Seniority
Severance pay is calculated using a progressive scale based on your seniority. The reference hourly rate is: Gross monthly salary ÷ 191 hours
| Seniority Bracket | Hours per Year | Equivalent in Days |
|---|---|---|
| Years 1-5 | 96 hours/year | ≈ 12 days of salary/year |
| Years 6-10 | 144 hours/year | ≈ 18 days of salary/year |
| Years 11-15 | 192 hours/year | ≈ 24 days of salary/year |
| Years 16+ | 240 hours/year | ≈ 30 days of salary/year |
Detailed Calculation Examples
📊 Example 1: Employee with 3 years seniority
- • Monthly salary: 5,000 MAD
- • Seniority: Exactly 3 years
- • Hourly rate: 5,000 ÷ 191 = 26.18 MAD/hour
- • Calculation: 3 years × 96 hours = 288 hours
- • Severance pay: 288 × 26.18 = 7,539.84 MAD
📊 Example 2: Manager with 8 years seniority
- • Monthly salary: 12,000 MAD
- • Seniority: 8 years
- • Hourly rate: 12,000 ÷ 191 = 62.83 MAD/hour
- • Calculation by brackets:
- - Years 1-5: 5 × 96h = 480h → 480 × 62.83 = 30,158.40 MAD
- - Years 6-8: 3 × 144h = 432h → 432 × 62.83 = 27,142.56 MAD
- • Total severance pay: 57,300.96 MAD
- • Notice pay (manager, 8 years): 3 months = 36,000 MAD
- • Total with notice: 93,300.96 MAD
📊 Example 3: Employee with 12 years and 4 months
- • Monthly salary: 7,500 MAD
- • Seniority: 12 years and 4 months (12.33 years)
- • Hourly rate: 7,500 ÷ 191 = 39.27 MAD/hour
- • Calculation by brackets:
- - Years 1-5: 5 × 96h = 480h
- - Years 6-10: 5 × 144h = 720h
- - Years 11-12.33: 2.33 × 192h = 447.36h
- - Total: 480 + 720 + 447.36 = 1,647.36 hours
- • Severance pay: 1,647.36 × 39.27 = 64,695.42 MAD
⚠️ Important: Fractions of a year are always counted (Article 52)
Damages for Abusive Dismissal (Article 41)
When a dismissal is deemed abusive by the court (dismissal without real and serious cause), the employee is entitled to damages in addition to severance pay and notice pay.
Calculation Formula
Damages = Seniority (years) × 1.5 months of salary
Capped at 36 months of salary maximum, regardless of seniority
Calculation Examples
- •5 years seniority, 6,000 MAD salary: 5 × 1.5 = 7.5 months → 7.5 × 6,000 = 45,000 MAD
- •15 years seniority, 8,000 MAD salary: 15 × 1.5 = 22.5 months → 22.5 × 8,000 = 180,000 MAD
- •30 years seniority, 10,000 MAD salary: 30 × 1.5 = 45 months, but capped at 36 months → 36 × 10,000 = 360,000 MAD
⚠️ Exclusion for Gross Misconduct
If dismissal is justified by gross misconduct (theft, violence, job abandonment, etc.), the employee loses their right to damages, notice pay, AND severance pay. Only current month salary and vacation pay remain due.
Common Calculation Mistakes to Avoid
Forgetting regular bonuses in reference salary
Reference salary includes base salary + seniority bonus + all regular bonuses (performance, attendance, etc.). Only expense reimbursements are excluded.
Not counting fractions of a year
If you have 5 years and 7 months of seniority, you must calculate on 5.58 years (7/12 = 0.58), not just 5 complete years.
Applying same hourly rate to all seniority
Calculation must be done bracket by bracket (96h, 144h, 192h, 240h) according to seniority thresholds, not by multiplying total seniority by a single rate.
Thinking severance pay is taxable
Legal severance pay is exempt from income tax within the limits provided by law. Supra-legal indemnities may be partially taxable.
Severance Calculation Guide
Important Information
Legal Basis
Calculations are based on the Moroccan Labor Code (Dahir No. 1-03-194 of September 11, 2003). Provisions may vary according to sectoral collective agreements.
Disclaimer
This calculator provides an estimate based on general provisions of Moroccan labor law. For a precise analysis of your situation, consult a lawyer specializing in labor law or a certified accountant.
Special Cases
- • Economic dismissal: may entitle to additional compensation
- • Resignation: generally no right to severance pay
- • Retirement: specific conditions according to age and seniority