Retrenchment benefit is not required by law in Singapore — there’s no statutory formula. What follows below is the prevailing norm that tripartite guidelines recommend and that most employers follow. Enter a monthly salary and years of service to see the estimated range.
Where this range comes from
Tripartite guidelines (MOM, NTUC, and employer federations) recommend 2 weeks to 1 month of salary per year of service as a fair retrenchment benefit, depending on the company’s financial position and industry norms. Unionised companies typically pay at the higher end — 1 month per year of service is the established practice there. MOM’s own data shows 1 month per year of service is what most retrenching firms actually pay.
The commonly cited threshold for eligibility is at least 2 years of service. Employees retrenched before completing 2 years generally aren’t covered by this norm, though nothing stops an employer from paying anyway.
None of this is enforceable in court unless it’s written into the employment contract or a collective agreement — in which case that written figure applies, not the norm. Without a contractual figure, the amount is a matter of negotiation between employer and employee.
This tool produces an estimate for planning and negotiation purposes only. It is not legal advice and doesn’t reflect what any specific employer is obligated to pay. For eligibility and process requirements around retrenchment itself (notice, mandatory MOM notification for larger retrenchment exercises, re-employment support), see our retrenchment guide.