How is gratuity calculated in Myanmar?
Myanmar has no statutory gratuity formula. The proxy is severance under Notification 84/2015 — 0.5 month at 6 months service rising to 9 months at 10 years, plus 1 additional month per year beyond 10. Contractual gratuity adds on top per company policy. Calculate on the last drawn month's basic (or gross, per contract).
What Myanmar law says
There is no statutory gratuity formula in Myanmar. The closest legal mechanism is severance pay under ESDL 2013 and Notification 84/2015, which scales by tenure. Most employers calculate the payment on the last drawn month's basic salary; some contracts use gross (basic + fixed allowances). The contract should specify which.
Severance / gratuity schedule and worked examples
Employee on last drawn monthly basic of MMK 800,000:
| Tenure | Months payable | Calculation (MMK) | Amount (MMK) |
|---|---|---|---|
| 6 months – 1 year | 0.5 | 0.5 × 800,000 | 400,000 |
| 1 – 2 years | 1 | 1 × 800,000 | 800,000 |
| 2 – 3 years | 2 | 2 × 800,000 | 1,600,000 |
| 5 – 6 years | 5 | 5 × 800,000 | 4,000,000 |
| 10+ years (12 yrs example) | 9 + (12 − 10) = 11 | 11 × 800,000 | 8,800,000 |
The "10+ years" band starts at 9 months and adds 1 additional month per completed year beyond 10, capped per the current notification.
Documentation requirements
- Final settlement statement showing tenure band, months payable, basis (basic or gross), and amount.
- Last drawn payslip and tenure records (joining date and exit date).
- PIT withheld at the marginal rate on the payment month, remitted to IRD by the 15th of the following month.
- Record retention: at least 7 years.
Edge cases
- Resignation — no statutory entitlement; pay only if contract commits to it.
- Fixed-term contract expiry — no severance owed.
- Gross misconduct dismissal — no severance owed; document the cause.
- Mid-band tenure — Myanmar tradition rounds down to the lower full year completed.
- Basic vs gross — many contracts say "month's salary"; clarify whether allowances are included.
- Death-in-service / retirement — typically a separate contractual gratuity rather than the severance schedule.
Employer takeaway
Compute on last drawn month's basic (or gross per contract) × the months from Notification 84/2015: 0.5 (6mo–1yr), 1 (1–2), 2 (2–3), 3 (3–4), 4 (4–5), 5 (5–6), 6 (6–8), 7 (8–10), 9 + 1/year beyond 10 (10+). Pay within 7 days of last working day, withhold PAYE, itemise, and retain records 7 years.
Common payroll mistakes
- Using last 12-month average salary instead of the last drawn month — the Myanmar convention is the latter.
- Forgetting to add 1 additional month per year beyond 10 years of service.
- Paying severance on resignation when the statute does not require it.
- Treating severance as tax-free — it is fully PIT assessable (see gratuity tax).
- Withholding final pay pending exit clearance (see withhold for exit clearance).
- ESDL 2013 — severance and end-of-service obligations
- Notification 84/2015 — severance schedule by tenure
- Payment of Wages Law — final settlement
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