REASON FOR TERMINATION
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When a company needs to let go of employees due to factors outside of the employees' control, such as corporate restructuring or downsizing, severance pay is offered as compensation. The amount of severance pay is determined by the length of time an employee has worked for the company. According to the Employment Act (2007), the minimum severance pay is equivalent to 15 days of wages for each full year of service completed by the employee.
Severance pay is subject to PAYE tax as part of terminal dues, and tax is withheld by the employer before payment.
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