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What is Indemnización por despido?

On a dismissal without cause, the Employment Contract Law (Ley de Contrato de Trabajo) sets a seniority-based severance equal to one month of the best normal and regular remuneration for each year worked (or fraction greater than three months).

Notice pay (preaviso) and the sums for the current month are added on top. Seniority severance is not subject to aportes.

In practice

A worker with 3 years of service and a best remuneration of $1,500,000 receives seniority severance of approximately $4,500,000, plus notice pay.

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