Severance Pay/Expenses


Severance Pay/Expenses –

Severance Pay/Expense is a pay/expense, which an employer pay his employee on discontinue the services by own or got terminated or leave the organization through mutual understanding due to any reason.

Severance pay includes any unused vacations, holidays and sick leaves in addition to the regular salary.

Examples –

Generally in recession period, many companies eliminate good number of employees to cope up with the expenses and the current situation. To those employees company pay Severance pay.

Due to automation many organization requires less employee, so they lay off the excess head count and pay them the Severance pay.


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