How to Calculate Employment Termination: Complete Guide to Avoid Errors
Being fired or resigning is always a delicate transition time. In addition to the emotional part, the big financial question arises: "How much do I have to receive in my settlement?"
The calculation of termination of the employment contract (under the CLT regime) involves several mathematical variables stipulated by Brazilian labor legislation. Understanding how these values are formed is essential to ensure that you do not end up at a loss.
In this guide, we will detail the most common severance pay and show how you can simulate your settlement in seconds using our Exact Labor Termination Calculator.
The Different Types of Dismissal
The first rule for calculating termination is knowing that the reason for termination defines exactly which rights you will receive:
- Dismissal without Just Cause: This is when the company decides to terminate the employee. This is the scenario that guarantees the largest number of severance pay, including the 40% fine on the FGTS and the right to Unemployment Insurance.
- Resignation Request: Occurs when the employee decides to leave. In this case, rights such as compensated notice (the employee often needs to comply), FGTS withdrawal, 40% fine and unemployment insurance are lost.
- Dismissal for Just Cause: Occurs due to serious misconduct on the part of the employee. The worker only receives the balance of salary and vacation pay, losing the right to advance notice, proportional 13th salary, FGTS and unemployment insurance.
- Dismissal by Agreement (Labor Reform): Employee and employer enter into an agreement. The FGTS fine drops to 20%, withdrawals are limited to 80% of the balance and there is no unemployment insurance.
What goes into the account? (Severance Funds)
1. Salary Balance
It is payment proportional to the days worked in the month of dismissal. Formula: (Base Salary / 30) * Days Worked in the Month.
2. Prior Notice
It can be worked or compensated. Compensated notice occurs when the company sends the employee away and does not require him to work 30 days. In this case, the company pays an additional full salary, plus 3 days for each year worked (limited to 90 days).
3. Accrued and Proportional Vacation
If you worked 12 months and did not take vacation, it has expired and must be paid upon termination, always increased by 1/3 constitutional. In addition, you receive vacation proportional to the months worked in the current year (each month with more than 14 days worked guarantees 1/12th of vacation).
4. 13th Proportional Salary
Just like vacations, the thirteenth is paid in proportion to the months worked in the current year. If you were laid off in June, you will receive 6/12ths of your salary.
5. FGTS Withdrawal and Fine
The company deposits 8% of your salary monthly into your FGTS account. If you are fired without cause, you have the right to withdraw this total accumulated amount and the company must pay an additional fine of 40% on this amount directly to you.
Discounts on Termination
The gross amount is not what goes into your account. There are mandatory legal deductions:
- INSS: Discount applied to the salary balance and the proportional 13th (progressively scaled between 7.5% and 14%).
- IRRF (Income Tax): Withheld at source depending on the total value of taxable funds. Compensated vacations, for example, do not receive an IRRF discount.
- Transport Voucher and Meal Voucher: Proportional discounts if paid in advance.
Perform the exact simulation
Doing this calculation manually crosses dozens of tax rates and proportionalities, which creates a high margin for human error.
To have absolute clarity on how much you should receive (with every cent of INSS and IRPF deducted), we have developed a complete simulator that is updated with current laws.
👉 Access the Employment Termination Calculator now, enter your admission date, departure date, last base salary and reason for dismissal to obtain a detailed statement of your settlement on the spot.