Severance Pay (Abfindung) Calculator Germany 2026

Germany has no general statutory right to severance pay. What most dismissed employees actually receive is the §1a Kündigungsschutzgesetz offer — half a month's salary per year of service in exchange for not filing a dismissal-protection claim.

§1a KSchG rate
0.5 months / year
Statutory general entitlement
None
Practical ceiling modelled
18 months
Notice from 8 years
120 days

Under §1a KSchG an employer terminating for urgent operational reasons (betriebsbedingte Kündigung) may offer 0.5 months of gross salary per year of service, payable only if the employee lets the three-week window for a Kündigungsschutzklage expire. This calculator models exactly that rate — 15 days per year of service — with a practical ceiling of 18 months, the range German labour courts typically settle within.

Notice follows the §622 BGB ladder, which is tenure-banded and independent of any severance: 30 days below 2 years, 60 days from 2 years, 90 days from 5 years and 120 days from 8 years of service, each running to the end of a calendar month or the 15th.

The decisive German feature is procedural rather than arithmetic: dismissal protection under the KSchG applies in establishments with more than ten employees once the employee has completed six months of service, and the works council (Betriebsrat) must be heard before any termination is valid. A dismissal issued without that consultation is void regardless of how much severance is offered.

For reference, the German statutory minimum wage stands at €2,409 per month in 2026, and social-security contributions continue to apply to a severance payment only in narrow cases — Abfindungen are generally free of social contributions but fully subject to income tax, softened by the Fünftelregelung (one-fifth rule) spreading the tax burden.

Severance Calculator

Severance Calculator

Calculate dismissal compensation, notice period, vacation and proportional bonuses

Contract Data

🇩🇪 Legislation Germany

0.5 month/year (customary benchmark, not statutory)

No general statutory entitlement — set by negotiation, social plan or court settlement.

Values to Receive
Severance75 days
€3,750.00

Germany has no general statutory right to severance pay. The 0.5 month/year figure is a common negotiation and court-settlement benchmark, not a legal entitlement; a claim only arises under §1a KSchG, a social plan (Sozialplan), a collective agreement or a settlement.

Notice Period90 days
€4,500.00
Proportional Vacation~14.7 days
€733.33
Proportional BonusesChristmas/Vacation
€1,000.00
TOTAL ESTIMATED:€9,983.33

Attention

You may be entitled to unemployment benefits.

⚠️ Values are estimates. Consult a specialist lawyer.

Country guides

Detailed rules and worked examples for each pilot country.

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Luxembourg

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Germany

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France

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Belgium

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Portugal

Severance Calculator — Frequently Asked Questions

Everything you need to know about severance pay in the EU

Severance Pay Guide – Termination Rights Across the EU

Severance PayAbfindungIndemnité LicenciementNotice PeriodUnfair DismissalRedundancy PayDespidoEmployment ProtectionSocial PlanTermination Rights

When an employment contract ends, severance pay (indemnité de licenciement, Abfindung, indennità di licenziamento) compensates workers for job loss. Rules vary significantly across EU member states regarding eligibility, calculation methods, and maximum caps. This guide explains how severance is determined in each country for 2026.

How Severance Pay Is Calculated

Severance calculation methods differ by country. France mandates 1/4 of monthly salary per year of service for the first 10 years, then 1/3 thereafter (indemnité légale de licenciement). Germany has no statutory requirement, but courts typically award 0.5 months' salary per year of service (Abfindung). Spain applies 20 days' salary per year for objective dismissals (despido objetivo) and 33 days for unfair dismissal (despido improcedente). Portugal provides 12-18 days per year depending on tenure. Luxembourg applies specific formulas based on service length and age.

Notice Periods in EU Countries

Notice periods (préavis, Kündigungsfrist, preavviso) protect both employer and employee during contract termination. Germany requires 4 weeks to 7 months depending on tenure. France mandates 1-3 months based on seniority and role. Belgium's notice periods can extend to 62+ weeks for long-tenured employees. Luxembourg requires 2-6 months depending on years of service. Spain applies 15-30 days. Understanding your notice period is essential for planning career transitions and negotiating exit packages.

Protection Against Unfair Dismissal

EU law and national legislation protect workers against unfair dismissal (licenciement abusif, ungerechtfertigte Kündigung). Most countries require employers to justify termination with valid reasons: economic redundancy (licenciement économique), professional misconduct (faute grave), or performance issues. Special protections exist for pregnant workers, employee representatives, and workers on sick leave. Wrongful dismissal can result in additional compensation, reinstatement orders, or damages beyond statutory severance.

Collective Redundancy Rules

EU Directive 98/59/EC regulates collective redundancies. Employers must inform and consult employee representatives before large-scale layoffs. Notification thresholds vary: dismissing 10+ employees in companies with 20-99 workers, or 10% of workers in companies with 100-299 employees. Social plans (plan social, Sozialplan) may provide enhanced severance packages. In France, the PSE (Plan de Sauvegarde de l'Emploi) can offer several months of additional compensation above the statutory minimum.

Tax Treatment of Severance Payments

Tax treatment of severance varies significantly. In France, statutory severance (indemnité légale) is tax-exempt up to certain limits. Germany allows the Fünftelregelung, spreading the tax burden over five years for a lower effective rate. Spain exempts severance up to the statutory maximum for unfair dismissal. Luxembourg applies favorable taxation to departure compensation. Understanding the tax implications of your severance package helps evaluate total compensation and compare across countries.