Germany: severance pay (Abfindung) calculator

The standard severance under the German Dismissal Protection Act and the rule of thumb for negotiations, with your length of service in years and months.

Severance pay (gross)

€14,000.00

4 monthly salaries: 0.5 × 8 counted years

8 years counted
Factor 0.5
4 monthly salaries

With a monthly salary of €3,500.00 gross and a length of service of 8 years, the factor 0.5 gives a severance pay of €14,000.00 gross.

Pro rata by months it would be €14,000.00.

A legal entitlement to severance pay exists only in exceptional cases, above all when the employer makes an offer under KSchG § 1a; otherwise it is a matter of negotiation (termination agreement, settlement in a dismissal protection case).

I’m not an accountant or a financial advisor. This is an estimate, for information only. Check with a professional before you decide.

Your numbers

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Monthly salary (gross)

What you are entitled to in money and benefits in kind in the month the employment ends (KSchG § 10 para. 3), gross: salary plus regular allowances and the value of benefits in kind.

Length of service: years

The full years the employment has lasted.

Length of service: extra months

The full months on top of the years (from 0 to 11).

Factor per year of employment

0.5 is the statutory rule of KSchG § 1a and the usual rule of thumb. In termination agreements and settlements the factor is negotiable.

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The calculation
	Monthly salary	€3,500.00
×	Factormonthly salaries per year of employment	0.5
×	Counted years of employmentyears without more than six months added	8
=	Severance pay (gross)	€14,000.00

How it works

The monthly salary is what you are entitled to in money and benefits in kind in the month the employment ends, gross (KSchG § 10 para. 3).
The statutory rule (KSchG § 1a): 0.5 monthly salaries for every year of employment. A period of more than six months is rounded up to a full year; exactly six months or less does not count.
Severance pay = monthly salary × factor × counted years. In negotiations the same factor of 0.5 is used as a rule of thumb; depending on the situation, a different factor can be agreed.

Worked example

Monthly salary €3,500, 8 years of employment, factor 0.5: 3,500 × 0.5 × 8 = €14,000 gross. With 8 years and 7 months, 9 years count: €15,750; with 8 years and 6 months it stays at 8 years (€14,000), pro rata by months it would be €14,875.

Sources

Text checked on October 5, 2026

Good to know

The monthly salary is gross and includes the money and benefits in kind of the last month (KSchG § 10 para. 3): salary, regular allowances, the value of a company car you may also use privately. Take it from your payslip.
Taxes and contributions: severance pay is taxable. The one-fifth rule (EStG § 34) softens the tax but since 2025 is no longer applied in the wage tax deduction, only in the tax return. Social contributions are normally not due on severance paid for the loss of a job.
Unemployment benefit: if you end the employment yourself, for example by resigning or signing a termination agreement, you must expect a block period of up to twelve weeks without good cause (SGB III § 159). If the employment ends against severance without the employer’s notice period being observed, unemployment benefit can be suspended, for at most a year (SGB III § 158).
Deadline to sue: if you do not want to accept a dismissal, you must file a claim with the labor court within three weeks of receiving the written notice (KSchG § 4). If you receive an offer under KSchG § 1a and do not sue, you are entitled to the severance.
This is not legal advice: what is realistic in your case depends on the chances of a dismissal protection claim, your age, your prospects on the job market and the negotiation. Get advice before signing, for example from a specialist employment lawyer, a trade union or the works council.

Frequently asked questions

Am I entitled to severance pay in Germany?

Not automatically: the law knows no general entitlement. It arises above all when the employer offers severance under KSchG § 1a in a dismissal for operational reasons and you do not sue, or when a social plan or collective agreement provides for it. Otherwise it is negotiated, usually in a termination agreement or a settlement before the labor court.

How high is the standard severance?

0.5 monthly salaries for every year of employment: that is the statutory rule in the case of KSchG § 1a and the rule of thumb in negotiations. With €3,500 and 8 years that is €14,000. A period of more than six months is rounded up to a full year.

Is there an upper limit?

If the labor court dissolves the employment against severance, it sets up to 12 monthly salaries, up to 15 from age 50 with 15 years of employment and up to 18 from age 55 with 20 years (KSchG § 10). For an agreement between the parties this limit is not binding.

Do I have to pay tax on severance pay?

Yes, it is taxable. The one-fifth rule (EStG § 34) can soften the tax but since 2025 it is applied only in the tax return, no longer by the employer in the wage tax deduction. Social contributions are normally not due on severance paid for the loss of a job.

Is severance pay offset against unemployment benefit?

Not simply offset, but unemployment benefit can be suspended if the employment ends without the employer’s notice period being observed (SGB III § 158, for at most a year). And if you end the employment yourself without good cause, you must expect a block period (SGB III § 159).