What are the Severance Pay requirements in Argentina?



Modified on: Thu, 23 Oct, 2025 at 4:56 PM


In Argentina, the employment relationship is protected by law, and terminations are subject to specific rules. When an employment contract ends, either through dismissal, resignation, or mutual agreement, the employer must pay all legally required final payments (“liquidación final”).

The amount and type of compensation depend on the reason for termination.



Types of Termination


a. Dismissal Without Just Cause (Despido sin causa)

If the employer terminates the contract without justified cause, the employee is entitled to severance pay (indemnización por antigüedad) and other mandatory payments.

b. Dismissal With Just Cause (Despido con causa)

If the employee is dismissed for a serious breach of duty (as defined by the LCT), the employer is not required to pay severance, but must still settle any pending wages, proportional vacation, and proportional annual bonus (SAC).

c. Voluntary Resignation (Renuncia)

If the employee resigns, they are not entitled to severance, but they must receive payment for:

  • Days worked up to the resignation date

  • Proportional annual bonus (SAC)

  • Unused or proportional vacation days

The employee must usually give 15 days’ prior notice (or as required by the applicable collective bargaining agreement).



Severance Pay (Indemnización por Antigüedad)

Applies only when:
The dismissal is made without just cause and the employee has more than 3 months of service.


Calculation:

  • Formula:
    One month of salary × each year of service (or fraction greater than 3 months)

  • Salary base:
    The best monthly, normal, and habitual remuneration received during the last year of employment (or during the full period worked, if less than one year).

  • Limits:
    The salary base cannot exceed three times the average monthly salary stated in the applicable collective bargaining agreement (CCT).

Example:

If an employee worked 5 years and their best monthly normal salary in the last year was ARS 500,000:
Severance = 5 × 500,000 = ARS 2,500,000.



Additional Mandatory Payments at Termination

Upon termination, regardless of the cause, the following items must be included in the final settlement (liquidación final):


ConceptDescription
Days workedSalary for days worked during the final month.
Integration of month of dismissal (Integración del mes de despido)If dismissal occurs mid-month, payment for the remaining days of that month.
Unused or proportional vacation payCompensation for vacation days earned but not taken.
Proportional Annual Bonus (Sueldo Anual Complementario – SAC)Pro-rata portion of the 13th-month salary for the current semester.
Indemnity for lack of notice (Indemnización sustitutiva de preaviso)If the employer fails to give required prior notice (usually 15 days to 2 months depending on seniority), the equivalent salary must be paid.
Seniority severance (Indemnización por antigüedad)As described in Severance Pay.
SAC on termination items (if applicable)Certain items may require a proportional SAC payment.
Other pending amountsAny unpaid reimbursements, commissions, or overtime normally earned.

Payment Deadlines


Employee TypeDeadline for Payment
Monthly-paid employeesWithin 4 business days after termination.
Weekly-paid employeesWithin 3 business days after termination.


These deadlines start counting from the day after the employee is formally notified of termination (via telegram or signed document).


The deadline to de-register an employee from Social Security is immediately after temriantion, with a maximum deadline of  of 5 days.

Notice Periods (Preaviso)


SeniorityRequired Notice by Employer
Up to 5 years1 month
Over 5 years2 months


If the employer does not provide advance notice, they must pay an indemnización sustitutiva de preaviso, equal to the salary for the required notice period.

Employees who resign must generally provide 15 days’ notice unless otherwise stated by their CCT.


Special Cases

  • Fixed-term contracts: If ended before the agreed end date without cause, the employee may claim damages equivalent to lost wages up to the end of the term.

  • Probationary period (Período de prueba): Termination during the trial period does not generate severance, but unused vacation and proportional SAC still apply.

  • Death of the employee or employer: Special indemnities apply as per Articles 248–249 LCT.




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