How do I add Severance Pay on an employee's payslip?

This feature is available on all Deel Local Payroll powered by payspace editions

Severance pay as defined by South African legislation, refers to a financial compensation that is provided to employees under certain circumstances when their employment is terminated. It is governed by the Basic Conditions of Employment Act (BCEA) and other relevant labour laws in South Africa.

Severance pay is typically awarded to employees who have been retrenched or dismissed due to operational requirements, such as business closures, restructuring, or redundancies. It is considered as a lump sum amount awarded to the employee, and its data is therefore captured and stored in the Lump Sum Directive section under Other Actions on the Edit Payslip screen.

      Navigate > Employee > Payroll Processing >  Edit Payslip > Other Actions > Lump Sum Directive

Step 1: Select the "+" button to add a Lump Sum Directive.

      

Step 2: Complete the fields on the Lump Sum Directive screen and save your changes.

      

Important

A Lump Sum Directive should be requested from SARS prior to processing the lump sum on the system.

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