Severance pay Cameroon law grants is due to an employee on a permanent contract (CDI) who is dismissed after at least two years of service with the company, except for gross misconduct. For each year of service it equals a percentage of the average monthly salary of the last twelve months: 20% from the 1st to the 5th year, 25% from the 6th to the 10th, 30% from the 11th to the 15th, 35% from the 16th to the 20th and 40% from the 21st year (order no. 016/MTPS/SG/CJ of 26 May 1993, still applied in 2026). Below are the formula, a worked example, what comes on top (notice, leave, damages) and the special cases.
Who is entitled to severance pay Cameroon?
The Labour Code (law no. 92/007 of 14 August 1992, art. 37) sets the principle; ministerial order (arrêté) no. 016/MTPS/SG/CJ of 26 May 1993 sets the rules of calculation. Three conditions must all be met:
- the contract is open-ended and the termination comes from the employer;
- the employee has completed at least two years of continuous service with the same company;
- there is no gross misconduct, whose seriousness is assessed by the court.
The indemnity is separate from notice: the two are cumulative. It does not apply to resignation, to the probationary period, which the Code allows either party to end without notice or indemnity (art. 43), or to fixed-term contracts (CDD), which can only end early for gross misconduct, force majeure or written agreement of the parties (art. 38).
Periods that count towards seniority
The 1993 order treats as service paid leave, exceptional leave of absence, paid or not, statutory training and internship periods, and several suspensions of the contract listed in article 32 of the Code: sickness, maternity leave, disciplinary suspension, workers' education leave, work accident or occupational disease, police custody or pre-trial detention, and short-time working.
The severance pay Cameroon scale
Unless a collective agreement, the employment contract or a specific text is more favourable, each year of service is paid at the rate of its band:
| Years of service | Percentage of the average monthly salary per year |
|---|---|
| 1st to 5th year | 20% |
| 6th to 10th year | 25% |
| 11th to 15th year | 30% |
| 16th to 20th year | 35% |
| From the 21st year | 40% |
Fractions of a year count, up to the last completed month: 8 years and 5 months of service are calculated as 8 years and 5 months, ignoring the days of the current month. Once the two-year condition is met, every year is paid, starting with the first.
The reference salary
The basis is the average monthly salary of the twelve months before the dismissal. The order excludes allowances that reimburse expenses (transport, travel, tools) and benefits in kind. Base salary, work-related bonuses and supplements, overtime and commissions remain.
What the indemnity is worth by seniority
Applying the statutory scale, severance pay Cameroon employers owe amounts to:
| Seniority | Indemnity in months of average salary |
|---|---|
| Under 2 years | No indemnity (notice only) |
| 2 years | 0.4 months |
| 5 years | 1 month |
| 10 years | 2.25 months |
| 15 years | 3.75 months |
| 20 years | 5.5 months |
| 25 years | 7.5 months |
A worked example of severance pay Cameroon
As an illustration, take an accountant classified in category VIII at a distribution company in Douala, made redundant after 14 years and 7 months of service. Her average monthly salary over the last twelve months, bonuses included and transport allowances excluded, is 600,000 FCFA.
| Band | Calculation | Amount (FCFA) |
|---|---|---|
| Years 1 to 5 | 5 × 20% × 600,000 | 600,000 |
| Years 6 to 10 | 5 × 25% × 600,000 | 750,000 |
| Years 11 to 14 | 4 × 30% × 600,000 | 720,000 |
| 7 months of the 15th year | 7/12 × 30% × 600,000 | 105,000 |
| Severance indemnity | - | 2,175,000 |
The indemnity is worth a little over three and a half months of salary. On top come three months' notice (categories VII to IX, more than five years of service), worked or paid, and the allowance for leave earned but not taken. If the dismissal were ruled unfair, damages would be added.
What comes on top of the indemnity
Notice
Termination of an open-ended contract is notified in writing, stating the reason (art. 34 of the Code). The notice period is set by order no. 015/MTPS/SG/CJ of 26 May 1993, unless the collective agreement or the contract provides a longer one:
| Category | Under 1 year | 1 to 5 years | Over 5 years |
|---|---|---|---|
| I to VI and domestic workers | 15 days | 1 month | 2 months |
| VII to IX | 1 month | 2 months | 3 months |
| X to XII | 1 month | 3 months | 4 months |
Notice runs from date to date from notification and cannot be charged against leave. During notice, the employee has one day off per week on full pay to look for a job (art. 35). If notice is not observed, the party at fault pays an indemnity equal to the pay and benefits for the period not worked (art. 36).
Untaken leave
Leave earned and not taken is paid on departure as a compensatory allowance. Accrual rules and the allowance calculation are explained in our guide to leave management in Cameroon.
Damages for unfair dismissal
The employer must prove that the reason is legitimate (art. 39). Where the dismissal is unfair, damages cannot be less than three months' salary nor exceed one month's salary per year of service, based on the average gross monthly salary of the last twelve months. A legitimate dismissal carried out without the required formalities entitles the employee to one month's salary at most. These amounts are separate from notice pay and from the severance indemnity.
Special cases of severance pay Cameroon
Redundancy
Before making redundancies, the employer meets the staff representatives in the presence of the labour inspector to look for alternatives: shorter hours, short-time working, restructuring of bonuses, or even pay cuts (art. 40). Negotiations last no more than thirty clear days. An employee who refuses the agreed measures in writing is dismissed with notice and, if eligible, with severance pay Cameroon rules provide. Without agreement, the order of dismissals gives priority to professional ability, then seniority and family responsibilities; representatives reply in writing within eight clear days, and the file goes to the Minister of Labour. The dismissed employee keeps a two-year re-hiring priority.
Staff representatives
A staff representative can only be dismissed with the authorisation of the local labour inspector (art. 130) and, on economic grounds, only if the job is abolished.
Closure, sale or bankruptcy
On a sale, merger or incorporation, current contracts transfer to the new employer (art. 42). Closing the business does not remove the duty to pay notice and the severance pay Cameroon law requires, except in force majeure, and neither bankruptcy nor judicial liquidation counts as force majeure. Termination indemnities share the preferential ranking of wage claims (art. 70).
Refused substantial change
If the employee refuses a substantial change proposed by the employer, the resulting termination is attributable to the employer: notice and indemnity are due, and the termination is only unfair if the change was not justified by the company's interest.
Paying and reporting severance pay Cameroon
Salary and indemnities are paid as soon as service ends (art. 68). The certificate of employment is handed over on departure (art. 44). A "full and final settlement" mention cannot be used against the employee, and claims for termination indemnities are time-barred after three years (art. 69 and 74).
On tax, the 2026 General Tax Code (CGI) only exempts from IRPP (personal income tax) the part of the indemnity paid as damages, excluding sums that compensate lost salary (art. 31); exceptional income may fall under the quarter method of article 65 bis. Have your adviser confirm the tax and CNPS (social security fund) treatment of each amount before computing the net, using the method in our guide to net salary calculation in Cameroon; social deductions are covered in our guide to CNPS contributions in Cameroon.
- Applying 40% to the whole seniority of a 22-year employee: each band keeps its own rate.
- Forgetting the months of the last year, which count pro rata.
- Including expense reimbursements in the reference salary, or leaving bonuses out.
- Ignoring the sector collective agreement, which may be more generous than the order.
- Deducting sick leave or maternity leave from seniority.
- Skipping the written, reasoned notification, a source of damages.
Automating the final settlement
The twelve-month average salary and seniority adjusted for suspensions are the two figures that take longest to rebuild by hand. Socium payroll software that calculates severance pay Cameroon uses payroll history, bonuses and absences to produce a settlement you can check. You can test your assumptions with the Socium payroll simulators. The 1993 order can be read in the FAO's FAOLEX database.
Frequently asked questions
How is severance pay Cameroon calculated?
Multiply the average monthly salary of the last twelve months by 20% for each of the first five years, 25% from the 6th to the 10th, 30% from the 11th to the 15th, 35% from the 16th to the 20th and 40% beyond, then add the completed months of the last year pro rata.
How much seniority is needed for severance pay Cameroon?
Two years of continuous service with the company, on an open-ended contract, without gross misconduct.
How much for 3 years at 250,000 FCFA?
3 × 20% × 250,000, or 150,000 FCFA, plus notice and untaken leave.
How much for 22 years at 400,000 FCFA?
6.3 months of average salary, or 2,520,000 FCFA: 1 month for years 1 to 5, 1.25 for 6 to 10, 1.5 for 11 to 15, 1.75 for 16 to 20 and 0.8 for the last two years.
Key takeaways
- Severance pay Cameroon requires two years of service, an open-ended contract and no gross misconduct.
- 20, 25, 30, 35 then 40% of the average monthly salary per year, completed months included.
- Notice of 15 days to 4 months depending on category, untaken leave and, if the dismissal is unfair, damages come on top.
- Severance pay Cameroon is paid as soon as service ends.
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