When your employment ends in Zambia, two of the most common entitlements are notice pay and leave pay. These are often the components employees are most confused about - how many days, what daily rate, and when they can be forfeited.
This explainer covers exactly what the Employment Code Act No. 3 of 2019 requires for both. Use our terminal benefits calculator to compute your own notice and leave pay instantly.
Notice periods under Section 53
Section 53 of the Employment Code sets the minimum notice periods that either party must give before ending a contract:
Contract Duration | Minimum Notice Period |
|---|---|
One month or less | 24 hours |
Between one and six months | 14 days |
More than six months | 30 days (one month) |
These are minimums. Your employment contract can specify a longer notice period (e.g. 60 or 90 days), but it cannot be shorter than the statutory minimum.
When is notice pay owed?
Notice pay is owed when the employer terminates your contract without giving you the full notice period. If your employer tells you to leave immediately instead of working out your 30-day notice, they must pay you 30 days' wages in lieu of notice.
Conversely, if you resign without serving your notice period, your employer can deduct the equivalent amount from your final pay. Always check whether your contract requires you to serve notice or allows payment in lieu.
How notice pay is calculated
Notice pay is based on your full daily rate - meaning your basic pay plus any regular allowances that form part of your normal remuneration. Irregular bonuses or one-off payments are excluded.
Daily rate = (Basic pay + Regular allowances) / 26 working days
Notice pay = Daily rate x Unserved notice daysExample: An employee earning K8,000 basic with K2,000 in regular allowances (K10,000 total) who is not given 30 days' notice:
Daily rate = K10,000 / 26 = K384.62
Notice pay = K384.62 x 30 = K11,538.46Leave accrual under Section 36
Section 36 of the Employment Code provides that every employee is entitled to a minimum of two days of paid leave for each month of service. This works out to 24 days of leave per year. Some contracts provide more generous leave (e.g. 25 or 30 days per year), but it cannot be less than 24.
Leave accrues continuously from your first day of employment. If you work for 18 months without taking any leave, you have accrued 36 days.
The Fifth Schedule daily rate formula
When leave is paid out upon termination, the daily rate is calculated under the Fifth Schedule of the Employment Code:
Leave daily rate = Monthly salary / 26 working daysThe monthly salary for this calculation includes basic pay and regular allowances - the same basis as notice pay. The 26-day divisor represents the average working days in a month (excluding Sundays and public holidays).
Worked example - leave pay
An employee who has worked for 2 years and 6 months (30 months), earning K12,000 per month, and has taken 35 days of leave:
Total accrued = 2 days x 30 months = 60 days
Less taken = 35 days
Outstanding = 25 days
Daily rate = K12,000 / 26 = K461.54
Leave pay = K461.54 x 25 = K11,538.46What "full pay" means for leave purposes
The Employment Code specifies that leave pay is calculated at "full pay" - which means your complete monthly remuneration including:
Basic salary
Housing allowance
Transport allowance
Lunch allowance
Any other regular, fixed allowances
It does not include irregular payments such as annual bonuses, commissions on specific deals, or overtime that varies month to month.
When leave pay is forfeited
There are limited circumstances where leave pay can be forfeited:
Abandonment of employment: If you simply stop showing up without formally resigning, your employer may treat this as abandonment and withhold leave pay
Contract provides for forfeiture: Some contracts state that leave not taken within a certain period is forfeited - but this cannot override the statutory minimum of accrued leave being paid out on termination
In practice, the Employment Code protects employees strongly here. Even in cases of summary dismissal for misconduct, accrued leave pay must still be paid because it represents compensation for work already performed.
Frequently asked questions
Can my employer force me to take leave during my notice period?
Yes, an employer can direct you to use your outstanding leave during the notice period. This is sometimes called "gardening leave". If you have 20 days of outstanding leave and a 30-day notice period, the employer may instruct you to take those 20 days as leave and only work the remaining 10 days. This reduces the leave pay owed on termination.
Is notice pay taxed?
Yes. Notice pay is part of your terminal benefits and is subject to PAYE, NAPSA, and NHIMA deductions. There is no tax exemption for notice pay in Zambia.
What if my contract says 60 days notice but I only get 14 days?
If your contract specifies a 60-day notice period and your employer only gives you 14 days, they owe you payment in lieu of the remaining 46 days. The contractual notice period takes precedence over the statutory minimum when it is longer. Calculate the pay owed using your daily rate multiplied by 46 unserved days.
For the full picture of all terminal benefit components, see our guide to calculating terminal benefits in Zambia. For redundancy-specific entitlements, read Redundancy pay and death in service benefits.