How severance pay is calculated in Morocco
Moroccan law sets a minimum severance pay (indemnité de licenciement) for employees on a permanent contract. It is counted in hours of pay for each year of service, at a higher rate the longer you have worked. This guide explains who is entitled, each step of the calculation, the dismissal procedure and its deadlines, and what you can claim on top when a dismissal is unfair. Every figure comes from the Labour Code (law 65-99).
Who is entitled to severance pay
Article 52 of the Labour Code gives the right to an employee on a permanent contract (CDI) who is dismissed after six months of work in the same company, whatever the pay method and however often the salary is paid. The article only speaks of permanent contracts.
Dismissal for serious misconduct removes the right to notice, severance and damages (art. 61). Article 39 lists what counts, for example theft, breach of trust, physical assault, serious insult, a deliberate and unjustified refusal to do work within one’s job, or unjustified absence of more than four days or eight half-days within twelve months. It is up to the employer to prove the reason for the dismissal (art. 63).
The calculation, step by step
- Average salary. The average pay of the 52 weeks before the contract ended (art. 55). It includes bonuses linked to the work, benefits in kind, commissions and tips, but not expense refunds (art. 57).
- SMIG floor. The average used can never be below the legal minimum wage (art. 56): 3,422.72 MAD a month in 2026.
- Hourly pay. Divide the monthly average by 191. The legal working year outside agriculture is 2,288 hours (art. 184), 190.67 hours a month, which payroll rounds to 191.
- Years of service. Count years of effective work. Paid leave, maternity leave, time off after a work accident or occupational illness, and suspensions such as authorised absence or ordinary illness all count as work (art. 54).
- Hours per band. 96 hours for each of the first five years, 144 for years 6 to 10, 192 for years 11 to 15 and 240 beyond 15 (art. 53). Each band applies only to the years inside it.
- Staff delegates. The amount is doubled for a staff delegate or union representative dismissed during the mandate (art. 58).
| Years of service | Hours of pay | Severance at 5,000.00 MAD a month |
|---|---|---|
| 1 year | 96 | 2,513.28 MAD |
| 5 years | 480 | 12,566.40 MAD |
| 10 years | 1,200 | 31,416.00 MAD |
| 15 years | 2,160 | 56,548.80 MAD |
| 20 years | 3,360 | 87,964.80 MAD |
| 25 years | 4,560 | 119,380.80 MAD |
A contract, a collective agreement or the internal rules can give more than these amounts, never less (art. 53).
Three worked examples
- 5,000.00 MAD a month, 12 years. Hourly pay: 5,000 / 191 = 26.18 MAD. Hours: 5 x 96 + 5 x 144 + 2 x 192 = 1,584. Severance: 1,584 x 26.18 = 41,469.12 MAD.
- 4,000.00 MAD a month, 2 years and 6 months. 240 hours x 20.94 MAD = 5,025.60 MAD. Notice is one month, so if the employer does not let the employee work it, 4,000.00 MAD more.
- An executive at 9,000.00 MAD, 7 years. 5 x 96 + 2 x 144 = 768 hours x 47.12 MAD = 36,188.16 MAD, plus three months of notice, 27,000.00 MAD. Had this executive been a staff delegate dismissed during the mandate, the severance would double to 72,376.32 MAD.
The dismissal procedure and its deadlines
- Hearing. Before a disciplinary dismissal the employee must be able to defend themself, heard by the employer within eight days of the facts being found, with a staff delegate or union representative of their choice. A signed report is drawn up and the employee gets a copy (art. 62). If either side refuses, the labour inspector steps in.
- Letter. The decision is handed over against a receipt or sent by registered letter with acknowledgment of receipt within 48 hours (art. 63). It must state the reasons and the hearing date, come with the report, and a copy goes to the labour inspector (art. 64).
- Reasons. A court can only consider the reasons written in the dismissal decision (art. 64).
- Deadline. A claim must reach the court within 90 days of receiving the dismissal decision, or the right is lost. The decision must mention this deadline (art. 65).
Unfair dismissal: conciliation and damages
An employee who considers the dismissal unfair can first ask for preliminary conciliation before the labour inspector, to get the job back or obtain damages (art. 41). An agreement reached there is final and cannot be taken to court. Without an agreement, the court can order reinstatement or damages of one and a half months of salary per year or fraction of a year of work, capped at 36 months.
Those damages come on top of the severance and the notice pay (art. 59). An employee who leaves because the employer committed a serious fault against them, such as a serious insult, violence or sexual harassment, is treated as unfairly dismissed (art. 40). The calculator shows the damages benchmark separately, because only a conciliation agreement or a court decision sets the real amount.
Documents at the end of the contract
Within eight days of the end of the contract the employer must hand over a work certificate showing the start and end dates and the jobs held (art. 72). The final settlement is usually signed as a receipt for full and final payment (reçu pour solde de tout compte). It must list each payment in detail, state the 60-day limitation period in readable characters, be made in two copies with one for the employee, and carry the words “read and approved” above the signature (art. 74). Any waiver of amounts owed to the employee is void (art. 73). Severance does not replace the job loss allowance, which follows its own rules (art. 53 and 59).
Common mistakes
- Using the last payslip. The law takes the 52-week average, with bonuses, commissions and benefits in kind.
- One rate for every year. After 15 years, only the years beyond 15 get 240 hours; the earlier years keep their own band.
- Dropping the extra months. The law counts each year or fraction of a year. This calculator counts them pro rata by month, and some courts count a started year in full.
- Mixing up the amounts. Severance, notice pay and unfair dismissal damages are three separate sums. Notice pay is only due when the employee does not work the notice.
- Missing the deadline. After 90 days from receiving the decision, the claim is lost.
Related tools
To check the monthly pay behind the average, use the salary calculator, which shows gross, CNSS, AMO and income tax for 2026. If you start working for yourself after leaving, the auto-entrepreneur tax calculator shows what you would pay, and the invoice generator makes your first invoices.