How is salary-in-lieu-of-notice calculated in Myanmar?
Salary-in-lieu-of-notice in Myanmar equals the unserved notice period multiplied by monthly salary (basic or gross per contract). Notice durations follow ESDL 2013 / Notification 84/2015 — 2 weeks for probation, 1 month for 6mo–5yr service, 3 months for 5+ years. The amount is fully taxable PIT income; gross up at the marginal rate in the month paid.
What Myanmar law says
Salary-in-lieu-of-notice (often "PILON") is the cash equivalent of the notice period the leaving party did not serve. Under ESDL 2013 and Notification 84/2015:
| Tenure | Notice (and PILON) |
|---|---|
| Probation (under 6 months) | 2 weeks |
| 6 months – 1 year | 1 month |
| 1 – 5 years | 1 month |
| 5+ years | 3 months |
PILON is owed by whichever party wishes to short-serve notice — employer terminating with immediate effect pays PILON to employee; employee leaving without serving notice owes PILON to employer (set off against final settlement with consent).
Worked example
Employee on MMK 800,000/mo basic + MMK 200,000 fixed allowances = MMK 1,000,000 monthly gross.
| Scenario | Calculation | PILON (MMK) |
|---|---|---|
| 3-yr tenure, employer terminates with no notice (1 mo) | 1 × 800,000 | 800,000 (basic) |
| Same case, contract says gross | 1 × 1,000,000 | 1,000,000 |
| 7-yr tenure, employer terminates with no notice (3 mo) | 3 × 800,000 | 2,400,000 (basic) |
| Probationer terminated, no weeks served | 0.5 × 800,000 | 400,000 |
| Employee resigns, serves 1 wk of 4-wk notice | 3 wks × (800,000 ÷ 4) | 600,000 (employee owes) |
PILON paid by employer is fully taxable PIT income in the month paid; gross up at the marginal rate.
Documentation requirements
- Termination / resignation letter with last working day.
- PILON calculation showing basis (basic vs gross), notice months.
- Final settlement statement with PILON line.
- PIT remittance to IRD by the 15th of the following month.
- Record retention: at least 7 years.
Edge cases
- Garden leave — employee on payroll for the notice period; no separate PILON.
- Mutual waiver — written agreement to waive notice; no PILON either way.
- Gross misconduct — employer may dismiss without notice and without PILON.
- Resignation with partial notice served — employee owes PILON for unserved portion; set off against final settlement only with consent or court order.
- Fixed-term contract early exit — notice rules generally do not apply; contract governs.
- Foreign-currency-paid roles — convert at CBM rate on settlement date.
Employer takeaway
PILON = unserved notice months × monthly salary. Schedule: 2 weeks probation, 1 month 6mo–5yr, 3 months 5+yr. Use basic or gross per contract. Add to final settlement, gross up PAYE at marginal rate, pay within 7 days of last working day, remit PIT by the 15th, retain records 7 years. Mutual written waiver permitted.
Common payroll mistakes
- Using "1 month for everyone" — schedule jumps to 3 months at 5 years.
- Computing on basic when contract says "gross".
- Skipping PAYE gross-up on PILON.
- Forgetting to add PILON to final settlement (see final settlement).
- Auto-deducting employee-owed PILON from final settlement without consent (see notice period pay).
- ESDL 2013 — notice and pay in lieu
- Notification 84/2015 — notice schedule
- Union Tax Law 2025-2026 — PIT on lump sums
Related questions
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