The NSSO Accepts An Alternative Calculation Method For The Seniority Bonus


Originally Published 12th March 2009

For a considerable period of time now the National Social

Security Office (NSSO) accepts that employers award a seniority

bonus to their employees after 25 or 35 years of service. This

premium is exempt from social security contributions and is

calculated as follows:

at 25 years of service: 1 x gross monthly pay;

at 35 years of service: 2 x gross monthly pay.

Initially the seniority bonus was always calculated on the basis

of the gross salary of the employee concerned. Now, the NSSO has

inserted an alternative calculation method in its instructions.

This alternative method allows the bonus to be based on the

average gross amount of a monthly salary in the company. According

to the NSSO, this indicates the proportion between the wages that

have been paid out and the amount of full time equivalents during

the previous calendar year.

Employers must however choose between both options. The

application of both calculation methods during one calendar year

results in the loss of the exemption from social security

contributions of all seniority premiums that have been awarded


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