Severance and termination pay in Honduras: notice, cesantía and benefits step by step
What is paid when an employment relationship ends, how it changes with the reason, and how to leave a signed record.
Related free calculator: Severance and labor benefits
The steps to build it
- Define the reason: resignation, justified dismissal (Art. 112), unjustified dismissal or mutual agreement.
- Note the start date and the end date. Length of service is counted on a 360-day commercial year, like the Labor Ministry’s calculator.
- Determine the base salary: the average salary, not just the last pay, if there were commissions or variable pay.
- Calculate notice pay, if it applies.
- Calculate severance, if it applies.
- Add pending and proportional vacation.
- Add the proportional thirteenth and fourteenth month pay.
- Review authorized deductions, sign the release and deactivate the employee.
Notice pay (Arts. 116 to 118)
It is the notice, or its payment in money, that the employer owes when dismissing without just cause. The days depend on length of service. If a trial period was agreed and the relationship ends within its first 2 months, there is no notice pay.
| Length of service | Days of notice |
|---|---|
| Under 3 months | 1 |
| 3 months to under 6 | 7 |
| 6 months to under 12 | 14 |
| 1 year to under 2 | 30 |
| 2 years or more | 60 |
Severance, cesantía (Art. 120)
- From 3 to under 6 months of service: 10 days of salary.
- From 6 to under 12 months: 20 days of salary.
- From 1 year on: one month of salary per year of service, proportional for the fraction.
- It has a cap: 25 months of salary, or 15 months in micro-businesses of up to 10 employees.
In a voluntary resignation, severance is paid only with 15 years or more of continuous service, and it is 35 % of what would have been due for unjustified dismissal. This does not apply to micro-businesses.
What changes with the reason
| Reason | Notice pay | Severance | Vacation and thirteenth/fourteenth month |
|---|---|---|---|
| Unjustified dismissal | Yes | Yes | Yes, proportional |
| Justified dismissal (Art. 112) | No | No | Yes, proportional |
| Voluntary resignation | Not paid by the company | Only with 15 years or more, partial | Yes, proportional |
| Mutual agreement | Only if agreed | Only if agreed | Yes, proportional |
Dismissing a pregnant employee without prior court authorization is treated as unjustified dismissal and adds an extra indemnity of 60 days (Art. 124).
If the employee resigns without giving notice, in theory they owe the company half of the notice pay (Art. 116). The system warns about it but does not deduct it on its own: it is a decision made with the release in view.
Taxes and the written record
In PymesPros’s calculation, notice pay and severance are exempt from ISR (income tax), so the settlement carries no withholding of that tax. The other items and any authorized deduction are reviewed in the release.
The record must list each line with its amount and its legal citation, and the screen and the signed document must come from the same source: if the paper says one thing and the system another, there is a problem.
How PymesPros helps
The PymesPros payroll engine calculates the settlement with these articles, generates the record with each line and its legal citation, deactivates the employee atomically and posts the journal entry. If you only want an estimate, the free severance calculator uses the same logic.
This guide is informational and does not replace the advice of a licensed public accountant. Rates, ceilings and dates are adjusted by the authorities from time to time: confirm them at the official source before applying them.
Frequently asked questions
Is an estimate the same as a release?
No. The calculator estimates. The release is the signed document. Confirm the cause, the average salary and the days with a professional or with the Labor Ministry.
Is it calculated on the last salary or the average?
On the average salary when there was variable pay. If the salary is fixed, they match.
Are vacation and the thirteenth and fourteenth month always paid?
Yes, proportionally to the time worked, regardless of the reason for termination.
What if the company is a micro-business?
The severance cap drops to 15 months and the partial severance rule for resignation does not apply.
Keep reading
How to run payroll in Honduras
The items a payroll includes, the order to build it and the mistakes that cost the most in a review.
Read the guide →13th and 14th month salary in Honduras
How much is due, when it is paid, how the proportional part is calculated and how to set money aside during the year.
Read the guide →Vacation and overtime pay in Honduras: how to calculate and record them
The days owed, how they are counted, the value of the hour and the surcharges set by the Labor Code.
Read the guide →Human resources and personnel management
A complete human resources department, without having to build one.
See human resources →Want to see it working in your company?
Request a free 14-day demo, with sample data and no card. Leave your details and we will contact you to activate it, or write to us directly.
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