Severance pay Benin employers owe is due to a dismissed employee with at least one year of service, except in the case of gross misconduct (faute lourde). Its amount, set by article 36 of the General Collective Labour Agreement (Convention collective générale du travail, CCGT) of 30 December 2005, still applicable in 2026, is calculated per year of service: 30% of the average total monthly salary of the last twelve months for each of the first five years, 35% from the sixth to the tenth year, and 40% beyond. In a collective dismissal, these rates rise to 35%, 40% and 45%. Below are the conditions, the formula, a worked example and what comes on top.
Who is entitled to severance pay Benin?
Law no. 98-004 of 27 January 1998 on the Labour Code does not set a scale itself: it refers to the dismissal indemnity "possibly provided for by the contract, collective agreements or customs" (art. 52). The CCGT of 2005 sets the conditions (art. 36):
- A dismissal initiated by the employer, on personal or economic grounds (art. 45 of the Code). Resignation and the end of a fixed-term contract (CDD) do not give rise to it.
- At least one year of service with the company.
- No gross misconduct, subject to review by the court.
The indemnity is separate from notice: the two are cumulative. A sector agreement or the employment contract may provide more; the more favourable text then applies.
Seniority taken into account
Some suspensions of the contract do not count as service (art. 36 of the Code), others do. Economic lay-off (mise à pied économique), limited to three months renewable once, expressly counts as effective service when calculating the dismissal indemnity (art. 35). Keep a reliable record of absences, because it changes the severance pay Benin employees receive: the Socium time and absence module keeps these periods and their reason.
The severance pay Benin scale
| Seniority band | Individual dismissal | Collective dismissal |
|---|---|---|
| 1st to 5th year | 30% per year | 35% per year |
| 6th to 10th year inclusive | 35% per year | 40% per year |
| Beyond the 10th year | 40% per year | 45% per year |
Indemnity = reference salary × (rate of the 1st band × years 1 to 5 + rate of the 2nd band × years 6 to 10 + rate of the 3rd band × years beyond 10). Fractions of a year count: six months are worth half a year.
The reference salary
It is the average total monthly salary of the twelve months of activity before the dismissal. It includes every payment made in return for work: base salary, bonuses, salary supplements, benefits in kind. Expense reimbursements are excluded. For severance pay Benin, calculate it from actual payslips, not from the contractual salary alone.
A worked example of severance pay Benin
As an illustration, take an employee dismissed on personal grounds after 12 years and 6 months of service, with an average total monthly salary of 350,000 FCFA over the last twelve months.
| Band | Calculation | Amount (FCFA) |
|---|---|---|
| Years 1 to 5 | 5 × 30% × 350,000 | 525,000 |
| Years 6 to 10 | 5 × 35% × 350,000 | 612,500 |
| 2 years and 6 months beyond | 2.5 × 40% × 350,000 | 350,000 |
| Dismissal indemnity | 4.25 months of salary | 1,487,500 |
In a collective dismissal, the same calculation at 35%, 40% and 45% gives 4.875 months, or 1,706,250 FCFA. If the employer releases the employee from working her notice, it adds one month's pay in lieu (350,000 FCFA), plus the allowance for leave not taken, explained in our guide to leave management in Benin.
Notice and severance pay Benin: what adds up
| Category | Notice period |
|---|---|
| Hourly-paid, casual, seasonal or temporary workers | 15 days |
| Employees, workers and labourers | 1 month |
| Supervisors, managers and equivalent | 3 months |
These periods are set by article 53 of the Code and article 31 of the CCGT. During notice, the employee has two days off per week, on full pay, to look for a job; if they find one, they may leave without paying an indemnity (art. 54). Without notice, the party at fault pays an indemnity equal to the pay and benefits of every kind for the period (art. 55). If termination is notified less than fifteen clear days before the employee goes on leave, or during leave, the notice indemnity is increased by fifteen days, one month or three months depending on the category (art. 57).
Severance pay Benin by reason for termination
| Situation | What is due | Text |
|---|---|---|
| Dismissal on personal grounds | Notice or pay in lieu + dismissal indemnity at individual rates | Code, art. 45 and 53; CCGT, art. 36 |
| Gross misconduct | No notice and no dismissal indemnity; salary and earned leave remain due | Code, art. 55 and 56; CCGT, art. 36 |
| Collective dismissal on economic grounds | Notice + indemnity at the higher rates; two-year re-hiring priority | Code, art. 47 to 50; CCGT, art. 36 |
| Unfair dismissal | Compensation of at least 3 and at most 9 months' gross salary, on top of the indemnities | Law no. 2017-05, art. 30 |
| Termination for prolonged illness | Indemnity equal to the dismissal indemnity, at least one month's salary | CCGT, art. 34 |
| Retirement | Retirement indemnity calculated on the same basis, at least three months' salary; no dismissal indemnity | CCGT, art. 82 |
Economic dismissal follows its own procedure: the labour inspector and staff representatives are informed first, then no dismissal may be notified for 21 days, extended to 30 days when more than eleven employees are concerned and to 45 days beyond fifty (art. 47 and 48 of the Code). Law no. 2017-05 of 29 August 2017, which sets the conditions for hiring and terminating employment, limits compensation for unfair dismissal to between three and nine months' gross salary; it also distinguishes a dismissal that is irregular in form (no written notice of the reason, no chance for the employee to explain, or during leave), compensated by at most two months' gross salary, from one year of effective work (art. 29).
Tax and payment of severance pay Benin
Under article 120 of the General Tax Code (CGI, 2025 edition), dismissal indemnities calculated on the basis of statutory texts are exempt from the tax on wages and salaries (ITS, impôt sur les traitements et salaires), except for paid leave and notice indemnities. The latter, like end-of-career indemnities and voluntary departure bonuses, are exceptional pay taxed using the twelve-month average salary method (art. 126). An indemnity negotiated above the collective agreement scale deserves tax advice; our guide to net salary calculation in Benin explains ITS. Salary and indemnities must be paid as soon as service ends (art. 222 of the Code). A "full and final settlement" mention cannot be used against the employee (art. 225). Claims for salary are time-barred after three years, but claims for the dismissal indemnity or for compensation only after ten years (Law no. 2017-05, art. 44).
Common mistakes with severance pay Benin
- Copying a neighbouring country's scale (25%, 30%, 40%): in Benin, the CCGT starts at 30%.
- Applying 40% to every year: the scale is progressive by band.
- Forgetting the collective increase when several employees leave for the same economic reason.
- Calculating on base salary instead of the average total salary.
- Ignoring fractions of a year and rounding seniority.
- Confusing serious and gross misconduct: only gross misconduct removes the indemnity.
- Paying late: the sums are due as soon as service ends.
Securing the exit file
- A written dismissal letter stating the reasons, the employer's identity and social security registration number, and the employee's hiring date and qualification, with the labour inspector informed at the same time (art. 46).
- Exact seniority and the twelve-month average total salary.
- Final payslip, proof of payment and certificate of employment (art. 62).
The Socium HR approval workflow has management approve the calculation before payment, and the Socium HR document vault archives the documents. The Socium payroll simulators help estimate the cost of an exit, and our guide to CNSS contributions in Benin covers the social charges on the final payslip.
Frequently asked questions
How is severance pay Benin calculated for less than five years?
Multiply the average total monthly salary by 30% and by seniority in years and fractions. For 3 years and 6 months at 200,000 FCFA: 3.5 × 30% × 200,000 = 210,000 FCFA.
Is severance pay Benin due before one year of service?
No: the CCGT requires at least one year of service. Notice remains due, except for gross misconduct.
Do damages replace the indemnity?
No: compensation for unfair dismissal comes on top of the dismissal indemnity and notice pay.
Which scale applies on retirement?
The CCGT retirement indemnity (art. 82) is calculated on the same basis, then reduced to a percentage that depends on age and seniority, with a minimum of three months' salary.
Key takeaways
- Conditions: a dismissal, at least one year of service, no gross misconduct.
- CCGT scale: 30%, 35%, 40% per year; 35%, 40%, 45% in a collective dismissal.
- Basis: average total salary of the last twelve months, expenses excluded, fractions of a year included.
- Severance pay Benin comes on top of notice, untaken leave and, if the dismissal is unfair, compensation of three to nine months' gross salary.
Texts: Benin Labour Code, Law no. 98-004, Law no. 2017-05 of 29 August 2017 and the 2005 General Collective Labour Agreement.
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