Severance on dismissal - how much you are owed under the Labour Code
When an employer ends an employment contract on its own initiative - reorganisation, redundancy, economic reasons - the law leaves it two routes: notice 30 calendar days in advance plus one month's pay, or notice 3 days in advance plus two months' pay. The employer makes that choice; the law sets the amount.
On top of the severance comes what employees often forget: money for unused paid leave and any unpaid wages. The calculator adds all three together and tells you the date by which the money must reach your account.
Updated · The rules require verification by a lawyer
The amount of severance by ground of dismissal
Severance is owed only when the employer ends the contract on its own initiative, and only on certain grounds. In other cases - leave money and wages, without severance.
How each part is calculated - step by step
Average salary
The base is the average pay of the last three months, including bonuses and allowances if they are regular. A one-off bonus is excluded. With less than a month of service - the actual monthly salary.
Severance
Average salary × 1 or 2, depending on the notice period. A contract may give more - for example half a month per year of service - but never less.
Leave money
Daily rate = monthly salary / average working days per month (22 in the calculator), × unused leave days. The annual minimum is 24 working days; unused leave carries over from year to year and is paid out in money on termination.
Arrears
Unpaid wages, overtime (at least 125%), night and rest-day pay - in full, on the day the contract ends. This is not severance, and nobody can "count" it into the severance.
Deductions
All sums are gross: income tax of 20% and pension contribution of 2% are withheld as with ordinary salary. Net = roughly 78% of gross.
Three typical situations in numbers
Redundancy, 30 days' notice
Salary GEL 2,500, 8 days of leave left. Severance 2,500 + leave 2,500 / 22 × 8 = 909 + wages to the last day. Gross total GEL 3,409 + wages, payable within 30 days.
"Don't come in from tomorrow"
Salary GEL 1,800, no notice given. At least 2 months = GEL 3,600 + leave. And within 30 days a demand for written reasons - without them the dismissal is a strong candidate for being declared unlawful in court.
"Write a resignation of your own accord"
Salary GEL 3,000. If you write it - severance 0, leave only. If you do not, and are given 3 days' notice - GEL 6,000. The difference of GEL 6,000 lies in one signature.
When severance is only the beginning - the signs of an unlawful dismissal
If even one of the points below matches your case, you can seek reinstatement and full lost earnings instead of severance.
- You demanded written reasons within 30 days and did not receive them within 7 days - or received them, but the ground is not on the Labour Code's list.
- The real reason for the dismissal is pregnancy, maternity leave, illness, trade union membership or a discriminatory ground.
- The position was "made redundant", but within a month someone else was hired for the same role.
- A disciplinary sanction was imposed in breach of procedure - without asking for an explanation, for breaking a rule that is not written in the internal regulations.
- A fixed-term contract was renewed beyond 30 months and you were dismissed "on expiry".
- You received the dismissal order orally or by messenger app; no written document exists.
Questions about severance
I was dismissed during probation - am I owed anything?
Wages for the time worked and, if accrued, leave money. Severance and notice are not required by law during probation unless the contract says otherwise. Probation must be agreed in writing and cannot exceed 6 months - otherwise it does not exist.
The employer offers to pay the severance in instalments. Is that lawful?
The law sets 30 calendar days for payment of the full amount. Payment in parts is allowed only with your written consent, and a lawyer will advise backing such consent with deadlines and a penalty clause.
I took the severance - can I still challenge the dismissal?
Yes - accepting the severance does not mean agreeing that the dismissal was lawful, unless you signed a waiver of claims. That is exactly why employers often ask for a "no mutual claims" signature - do not sign it without a lawyer.
I work remotely for a foreign company under a contract governed by Georgian law. Do the same rules apply?
Yes - if the contract is governed by Georgian law, the Labour Code minimums apply regardless of the employer's country. Enforcement against a foreign employer is harder, and a lawyer checks the contract's jurisdiction clause first.
How long do I have to claim the severance?
The limitation period for labour claims is one year from learning of the breach, while a dismissal is challenged within 30 days of receiving the written reasons. Severance is claimed without a court fee - labour disputes are exempt.
Other calculators and pages
You have the number - now collect it in full
At a free consultation an employment lawyer will check whether the dismissal was lawful and draft the demand letter for the severance - within 15 minutes the coordinator will contact you.