Korte Law international boutique law firm
  1. Home
  2. Insights

How Severance Pay Is Calculated in Morocco (2026 Guide for Foreign Employers)

By , Managing Partner, Rechtsanwalt · Published 09 November 2026

Practice area: Labor Law

Korte Law - Morocco

In short. As of November 2026, an employee on a permanent contract (CDI) who is dismissed after at least 6 months with the same company is entitled to severance pay under the Labour Code (Law 65-99, Arts. 52-53). Severance is paid in hours of salary for each year of work: 96 hours for years 1 to 5, 144 for years 6 to 10, 192 for years 11 to 15 and 240 beyond year 15. It is owed on top of notice pay and on top of any damages for abusive dismissal (Art. 59).

1. Who is entitled

The employee must be on a permanent contract (CDI) and be dismissed after at least 6 months of service with the same company (Art. 52). Severance is not owed where the dismissal is for serious misconduct under the list in Art. 39, and a misconduct dismissal is only valid if the procedure of Arts. 62 to 65 was followed (Art. 61). A contract or collective agreement may grant more than the statute.

2. The hour bands

Years of serviceHours of salary per year
1 to 596
6 to 10144
11 to 15192
Over 15240

Each band applies only to the years that fall inside it. The top band is not applied to the whole career.

3. The salary used

The hourly reference salary is the average of the 52 weeks before termination (Art. 55), never below the legal minimum wage (Art. 56), and it includes commissions and benefits in kind (Art. 57). For delegates and union representatives in mandate, the severance is doubled (Art. 58).

4. Worked example

An employee earns MAD 50 per hour and leaves after 8 years. Years 1 to 5: 5 x 96 = 480 hours. Years 6 to 8: 3 x 144 = 432 hours. Total 912 hours x MAD 50 = MAD 45,600. A final part-year is a grey area: the text we checked does not say whether it is pro-rated, so confirm the treatment before you rely on a figure.

5. Notice, and why severance does not replace it

Notice periods are set by decree 2-04-469 of 29 December 2004 and depend on the employee's category and seniority. Notice that is not worked is paid out (Art. 51), and a contract clause that shortens the statutory notice is void (Art. 43). Severance comes in addition to notice pay.

6. Unfair dismissal

A dismissal without valid reason can lead to reinstatement or to damages of 1.5 months of salary per year of service (a fraction of a year counts), capped at 36 months (Art. 41). Damages are added to notice pay and severance (Art. 59).

7. Settlement

A conciliation before the labour inspector gives the agreement finality (Arts. 41 and 76). A private settlement signed without the inspector does not give the same protection.

8. Common mistakes

  • Applying the top band to all years instead of only the years inside it.
  • Calculating on base pay only, without commissions and benefits in kind.
  • Assuming severance replaces notice pay or damages for unfair dismissal.
  • Using a shorter notice period from the contract than the statute allows.
  • Signing a private settlement without going through the labour inspector.

A note on how this works in practice. Much of what decides the outcome sits below the statute, in the way an inspector or court reads the reference salary and the contract in front of it, and that knowledge is held locally. Instructing Moroccan counsel before a dismissal is almost always less expensive than repairing one afterwards.

Speak to a lawyer about your project

Back to "Korte Law" homepage