Severance calculator (El Salvador)

What this calculator does

This calculator estimates the severance for de facto dismissal without justified cause in El Salvador for indefinite-term contracts (art. 58 of the Labor Code): 30 days of basic salary per year of service, plus the proportional share for fractions of a year, and never less than 15 days.

It also applies the legal cap many people are unaware of: for the calculation, the daily salary cannot exceed 4 times the daily minimum wage in force for your sector. The calculator shows your real daily salary and the capped daily salary, so you see exactly when and by how much the cap reduces the amount.

Who it is for

• Workers dismissed without justified cause who want to estimate what they are owed.
• People negotiating a settlement who need to know the legal minimum.
• Employers and payroll staff calculating labor liabilities.
• High earners who want to understand the effect of the 4 minimum wage cap.

What information you need

• Your basic monthly salary, without commissions or bonuses (divided by 30 to get the daily salary).
• The minimum wage sector of your activity (it sets the daily salary cap).
• Your full years of service and the additional months.
• The legal parameters (30 days per year, 15-day minimum, 4 × daily minimum cap) are already configured per the law; you do not need to enter them.

How it is calculated

The daily salary is the monthly salary ÷ 30 (a calculation convention).

It is compared with the art. 58 cap: 4 times your sector daily minimum wage. For commerce and services / industry the cap is 4 × $13.44 = $53.76 per day. If your daily salary exceeds it, the calculation uses the cap.

Each full year of service pays 30 days of the applied daily salary; the fraction of a year pays proportionally (30 × months ÷ 12 days).

If the result falls below 15 days of salary, the 15-day minimum is paid.

The statutory severance pays no ISR (it is exempt up to 30 days per year — exactly the legal formula) and is not subject to ISSS or AFP contributions.

Formula

Daily salary

daily salary = monthly salary ÷ 30

Daily salary cap (art. 58)

applied daily salary = min(daily salary, 4 × sector daily minimum wage)

Severance for full years

full years = 30 × applied daily salary × years

Proportional share for the partial year

proportional = 30 × (months ÷ 12) × applied daily salary

Legal minimum

severance ≥ 15 × applied daily salary

Worked example

You earn $600 per month in the commerce and services sector, have 3 years and 6 months with the same employer, and are dismissed without justified cause.

1. Daily salary: $600 ÷ 30 = $20.00. The sector cap is 4 × $13.44 = $53.76; since $20.00 does not exceed it, the cap does not apply.
2. Full years: 30 days × $20.00 × 3 years = $1,800.00.
3. Fraction of a year: 30 × (6 ÷ 12) = 15 days → 15 × $20.00 = $300.00.
4. Total: $1,800.00 + $300.00 = $2,100.00 (well above the 15-day minimum of $300.00).

Your legal minimum severance is $2,100.00, exempt from ISR and with no ISSS or AFP deductions.

How to interpret the result

The result is the art. 58 legal minimum: a contract or agreement can improve the amount, never reduce it.

If your daily salary exceeds the cap, the "daily salary applied" row shows the value actually used. For example, at $3,000 per month the daily salary is $100.00, but the calculation uses $53.76: each year of service pays $1,612.80, not $3,000.00.

You receive the statutory severance in full: it is ISR-exempt (art. 4 num. 3 of the Income Tax Law) and outside the ISSS and AFP contribution bases.

When the contract ends you are usually also owed proportional vacation and aguinaldo; use the related calculators to estimate them.

Common mistakes

• Ignoring the cap: for high salaries, multiplying the full monthly salary by the years gives more than the legal amount. The daily salary used never exceeds 4 × the sector daily minimum.
• Using the salary with commissions or bonuses: art. 58 is calculated on the basic salary.
• Forgetting the fraction of a year: the additional months pay proportionally — they are neither lost nor rounded up to a year.
• Applying ISSS, AFP, or ISR deductions to the statutory severance: it is exempt from all three.
• Applying this formula to a fixed-term contract: art. 59 compensates with the salary for the time remaining until expiry (never exceeding the art. 58 amount).
• Using the cap of the wrong sector: each sector has its own daily minimum and therefore its own cap.

Frequently asked questions

Sources

• Código de Trabajo de El Salvador, arts. 58–59 (indemnización por despido sin causa justificada, texto codificado oficial) — Codificación oficial (copia alojada por COLSIBA) (Art. 58: 30 days of basic salary per year of service plus a proportional fraction, minimum 15 days; the daily salary is capped at 4 × the daily legal minimum wage ("salario mínimo diario legal vigente"). See docs/research/sv-labor-rules.md, section 13.)
• Decreto Ejecutivo No. 11 (2025), Ramo de Trabajo y Previsión Social — tarifas de salario mínimo — Diario Oficial de El Salvador (texto oficial) (Source of the sector daily minimum wages behind the art. 58 cap: 4 × $13.440 = $53.76/day for comercio y servicios and industria (max $1,612.80 per year of service). Daily tariffs are derived in sv-minimum-wage-rules.)
• Ley de Impuesto sobre la Renta, art. 4 numeral 3 — exención de las indemnizaciones por despido — Asamblea Legislativa de El Salvador (texto consolidado, abril 2025) (Dismissal indemnities are ISR-exempt up to 30 days of basic salary per year of service — the exemption ceiling equals the art. 58 statutory formula, so the statutory severance is fully exempt.)
• Cálculo de indemnización en El Salvador — guía práctica (sin ISSS, AFP ni ISR sobre la indemnización legal) — Finiquito Justo (Secondary corroboration that no ISSS or AFP is withheld from art. 58 indemnities: the statutes define both contribution bases on remuneration for work performed and are silent on indemnities; the exclusion is uniform practice.)

Last reviewed:

July 21, 2026

Calculation version:

1.0.0

Important notice

The results of these calculators are informative estimates and may differ from official calculations. They do not constitute legal, tax, or financial advice. Always verify with the competent institutions or a professional.

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