Severance Pay Calculator Luxembourg 2026

Luxembourg pays statutory severance (indemnité de départ) as a fixed number of months of salary that jumps at seniority thresholds — not as a per-year accrual. Below five years of service the legal entitlement is exactly zero.

Entitlement below 5 years
0 months
At 10 years of service
2 months
At 30 years of service
12 months
Notice from 10 years
6 months

Article L.124-7 of the Code du travail sets a band table rather than a formula: 1 month at 5 years of service, 2 months at 10 years, 3 months at 15, 6 months at 20, 9 months at 25 and 12 months from 30 years. Nothing accrues between two thresholds, so an employee dismissed at 9 years and 11 months receives one month, and the same employee one month later receives two.

Notice is separate from severance and also tenure-banded: 2 months below 5 years of service, 3 months from 5 years and 6 months from 10 years. Employers with fewer than 20 staff may extend the notice period instead of paying the severance months — a substitution that exists in Luxembourg law and has no equivalent in the neighbouring systems.

Luxembourg's statutory minimum wage of €2,771 per month for unskilled adult workers is the highest in the EU, which mechanically makes each severance month expensive: a single month of severance in Luxembourg is worth more in cash than three months in most central-European member states. Severance is calculated on the actual gross monthly salary, with no reference-pay ceiling of the kind Portugal applies.

Because the entitlement is a step function, timing of the dismissal matters far more here than in accrual systems such as France or the Netherlands. Use the calculator below with your exact years of service to see which band applies to you.

Severance Calculator

Severance Calculator

Calculate dismissal compensation, notice period, vacation and proportional bonuses

Contract Data

🇱🇺 Legislation Luxembourg

1 month/5 years, max 12 months

After 5 years of seniority.

Values to Receive
Severance1 months
€1,500.00
Notice Period90 days
€4,500.00
Proportional Vacation~14.7 days
€733.33
Proportional BonusesChristmas/Vacation
€1,000.00
TOTAL ESTIMATED:€7,733.33

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.

🇱🇺

Luxembourg

🇩🇪

Germany

🇫🇷

France

🇧🇪

Belgium

🇵🇹

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.