Severance Calculator (Unjustified Dismissal)

Código de Trabajo Art. 82 + Constitutional Court doctrine (integrated salary: +1/12 Bono 14 and +1/12 Aguinaldo). Math runs in your browser — no data sent anywhere.

Severance
Q 0.00
Aguinaldo prop.
Q 0.00
Bono 14 prop.
Q 0.00
Vacation cash
Q 0.00
TOTAL OWED
Q 0.00
Show the formula
Severance = (Avg salary × 7/6) × Years
The 7/6 factor (≈1.1667) adds the twelfth parts of Bono 14 and Aguinaldo to the base — required by Constitutional Court jurisprudence (exp. 1630-2004, 1061-2010, 2822-2011). Plus partial-year proportional aguinaldo, bono 14, and vacation cash (15 days × partial year ÷ 30 × salary).
The vacation line is an approximation on the salary entered above: Labour Code Art. 134 bases vacation pay on the average of ordinary and extraordinary pay of the last year, so with overtime or commissions use the vacation calculator for that line.

What Severance Is in Guatemala

In Guatemala, severance pay (indemnizacion por despido injustificado) is a mandatory payment an employer owes when they terminate a worker without justified cause. It’s regulated by Article 82 of the Labor Code (Decreto 1441) and works out to one month of salary for each year of continuous service — computed on the integrated salary (ordinary average x 7/6), per Constitutional Court jurisprudence.

Severance is NOT owed when:

  • The worker resigns (renuncia voluntaria).
  • The employer dismisses the worker with justified cause under Article 77 (e.g., missing two full consecutive working days without permission or justified cause, a crime against the employer’s property, revealing work secrets) AND communicates it in writing stating the cause (Article 78).
  • The contract was for a fixed term that has naturally expired.
  • The worker dies: Art. 85 establishes a separate compensation rule for dependants, subject to its employer-size limits and IGSS-benefit conditions; death does not eliminate all compensation.

In all other cases — most notably “I let you go because we’re restructuring” or “we don’t need you anymore” — severance is owed in full.

The Severance Formula

Integrated salary = (avg ordinary monthly salary last 6 months) x 7/6

Severance proper = integrated salary x (years and fractions of a year worked)

For incomplete year: integrated salary x (months worked / 12)

Total finiquito = Severance + Proportional Aguinaldo + Proportional Bono 14
                + Accrued vacation cash + Any unpaid salary

The Labor Code (Art. 82) specifies the salary average is from the last 6 months of ordinary income, NOT the contract’s nominal salary. If you received a raise 3 months ago, the average reflects that. The x 7/6 factor comes from Constitutional Court jurisprudence: the severance base must integrate one twelfth of Bono 14 and one twelfth of Aguinaldo on top of the ordinary average (see the integrated-salary section below). The proportional Aguinaldo, Bono 14, and vacation components are computed on the ordinary salary, not the integrated one.

What Counts in the Salary Average

INCLUDED (ordinary salary):

  • Base monthly salary
  • Habitual commissions
  • Regular overtime (when habitual, not occasional)
  • Regular productivity bonuses above Q250

ADDED ON TOP (the x 7/6 integration, per Constitutional Court jurisprudence):

  • One twelfth of Bono 14
  • One twelfth of Aguinaldo

EXCLUDED:

  • The Q250 monthly incentive bonus (Decree 78-89)
  • Aguinaldo and Bono 14 as full payments (only their twelfth parts are integrated, via the 7/6 factor)
  • Occasional extraordinary bonuses
  • Per diems and reimbursements

The Integrated Salary: Why the Base Is 16.67% Higher

Most online calculators (and many employer settlement offers) compute severance as plain salary x years. The integrated figure is 16.67% higher than that plain-salary figure. Guatemala’s Constitutional Court — in case files (expedientes) 1630-2004, 1061-2010, and 2822-2011 — established that the Article 82 base is the integrated salary (salario integrado): the average ordinary salary plus one twelfth of Bono 14 plus one twelfth of Aguinaldo. Since each twelfth equals 1/12 of a monthly salary, the integrated base works out to salary x 7/6.

Put plainly: the plain salary x years figure is the floor an employer might offer; the integrated figure is what courts award.

MethodCalculation (Q5,000 salary, 3.5 years)Result
Plain salaryQ5,000 x 3.5Q17,500.00
Integrated salary (what courts award)Q5,000 x 7/6 x 3.5Q20,416.67
Difference+16.67%+Q2,916.67

The same worker’s full package at the end of May: severance Q20,416.67 + proportional Aguinaldo Q2,500 (6 months) + proportional Bono 14 Q4,583.33 (11 months) + accrued vacation cash Q1,250 = Q28,750.00 total finiquito.

A real-world example published by Guatemalan labor advisors: a worker earning Q7,300 (Q6,500 base + Q800 habitual commissions) with 4 years, 7 months, and 12 days of service (~4.6167 years). Integrated salary: Q7,300 x 7/6 = Q8,516.67. Severance: Q8,516.67 x 4.6167 ≈ Q39,319 — not the ~Q33,702 a plain-salary calculation would produce.

If you’re offered a settlement computed on plain salary, you’re not obligated to accept it — the difference is claimable at the General Labor Inspection and the Labor Courts.

Proportional Benefits at Termination

When the labor relationship ends, the worker also receives proportional Aguinaldo, Bono 14, and vacation cash — regardless of who terminated the contract or why.

Proportional Aguinaldo: (monthly salary x months worked since Dec 1) / 12. Proportional Bono 14: (monthly salary x months worked since Jul 1) / 12. Vacation cash: 15 working days per year worked, prorated, paid on the average of ordinary and extraordinary pay over the last year (Labor Code Art. 134). The calculator above uses the salary you enter for this line; if you had overtime or commissions, use the vacation calculator for it.

These are owed whether you resigned, were dismissed for cause, or dismissed without cause. Severance proper is only owed in the unjustified-dismissal case.

Worked Examples for 2026

Case 1 — Worker dismissed without cause after 3 full years at Q6,000/month

  • Salary average (last 6 months): Q6,000
  • Integrated salary: Q6,000 x 7/6 = Q7,000
  • Years of service: 3.0
  • Severance: Q7,000 x 3 = Q21,000
  • Proportional Aguinaldo (5 months since Dec 1, on ordinary salary): (Q6,000 x 5) / 12 = Q2,500
  • Proportional Bono 14 (10 months since Jul 1, on ordinary salary): (Q6,000 x 10) / 12 = Q5,000
  • Accrued vacation (assume 30 days pending; fixed salary with no overtime, so the Art. 134 average of ordinary and extraordinary pay is Q6,000): Q6,000 / 30 x 30 = Q6,000
  • Total finiquito: Q34,500

Case 2 — Minimum wage worker dismissed after 8 months

  • Salary: Q4,002.28
  • Integrated salary: Q4,002.28 x 7/6 = Q4,669.33
  • Time worked: 8 months = 8/12 of a year
  • Severance proper: Q4,669.33 x 8/12 = ~Q3,112.88
  • Proportional Aguinaldo (assume 5 months since Dec 1): Q1,667.62
  • Proportional Bono 14 (8 months since Jul 1): Q2,668.19
  • Vacation cash (15 days x 8/12): Q1,334.09
  • Total: ~Q8,782.78

Case 3 — 10-year employee dismissed at Q12,000/month

  • Integrated salary: Q12,000 x 7/6 = Q14,000
  • Severance: Q14,000 x 10 = Q140,000
  • Plus proportional benefits = Q15,000 to Q25,000 depending on month
  • Total: Q155,000-Q165,000

Justified Dismissal: When Severance Is NOT Owed

Article 77 of the Labor Code lists 11 just causes, letters a) to k), that let the employer end the contract without liability (short English summaries):

  • a) Openly immoral conduct at work, or insults, slander or physical aggression against the employer or its representatives
  • b) The same acts against a coworker during work, if discipline is seriously disrupted or work is interrupted
  • c) The same acts against the employer outside the workplace during working hours, unprovoked, making working together impossible
  • d) A crime or offense against the property of the employer, coworkers or a third party inside the establishment; or intentional or negligent material damage to machines, tools, materials or products
  • e) Revealing the secrets referred to in Art. 63(g)
  • f) Missing work without permission or justified cause for two full consecutive working days, or six half-days in the same calendar month
  • g) Manifest refusal to adopt safety measures or procedures, or to follow clear instructions for efficiency
  • h) Breaking the Art. 64 prohibitions or the approved internal work rules after one prior written warning (no warning needed for drunkenness that endangers people or property)
  • i) Misleading the employer at hiring about qualities or knowledge, false references, or work that clearly shows incapacity
  • j) A final sentence of arresto mayor or prisión correccional
  • k) Any other serious breach of the obligations the contract imposes

Under Article 78, a dismissal for an Article 77 cause takes effect when the employer communicates it in writing to the worker, stating the cause, and the worker actually stops working. The worker may summon the employer before the Labor and Social Welfare Courts, before the prescription period runs, so the employer proves the just cause. If the employer does not prove it, it must pay the severance the Code grants plus, as damages, the wages lost from the dismissal until the severance is paid, up to twelve (12) months of salary, plus court costs.

The Finiquito Laboral

When the contract ends, the employer must prepare a finiquito laboral — an itemized settlement showing each component separately:

  1. Pending salary (days worked in the current month)
  2. Severance (indemnizacion) — if unjustified dismissal
  3. Proportional Aguinaldo
  4. Proportional Bono 14
  5. Accrued vacation cash
  6. Q250 bonus for any pending month
  7. Any other accrued benefits

Sign the finiquito only after reviewing each line. Never accept a global figure (“here’s Q15,000, sign here”) — you may be waiving rights.

How to Claim Severance

If the employer refuses to pay or pays less than owed:

  1. File a complaint at the General Labor Inspection (Inspeccion General del Trabajo, MINTRAB).
  2. Bring your contract, recent paystubs, DPI, and the unsigned finiquito if any.
  3. The inspection may conduct conciliation; Arts. 278-280 do not specify a 5-15-day hearing deadline.
  4. If conciliation fails, the inspection issues a certification allowing you to file a demanda ordinaria laboral in the Labor Court.
  5. You have 30 working days from dismissal to file in the Labor Court for severance claims.

Severance Doesn’t Pay ISR or IGSS

Article 70(2) of Decree 10-2012 (the ISR law) and Article 27 of Decree 295 (IGSS) both exempt severance from withholdings. You receive 100% of the calculated amount.

  • Codigo de Trabajo de Guatemala (Decreto 1441 of the Congress), Articles 78, 80, 82.
  • Decreto Numero 42-92 — Ley del Bono 14, Article 3 (proportional benefit on termination).
  • Decreto Numero 78-89 — Q250 bonus excluded from severance calculations.
  • Corte de Constitucionalidad — Case files (expedientes) 1630-2004, 1061-2010, and 2822-2011: integrated-salary doctrine (the severance base includes the twelfth parts of Bono 14 and Aguinaldo). The expediente texts are not published at a direct URL; they are consulted through the Court’s own search system.
  • Full texts: Labour Code (Decreto 1441) — CENADOJ consolidated text · Decreto 42-92, Ley de Bonificación Anual — official text, Organismo Judicial
  • Full text of Decreto 78-89: PDF published by the Congreso — an image-only scan with no text layer, so it is not searchable.
  • Ministerio de Trabajo y Prevision Social (MINTRAB) — Inspeccion General del Trabajo, central office at 7a Avenida 3-33, Zona 9, and departmental delegations.

This page provides general guidance on Guatemala labor law. For complex cases (executive contracts, collective bargaining, foreign workers, group layoffs), consult a labor attorney before signing any finiquito.