Published: 24 October 2026 · Updated: 24 October 2026
Enter your last gross monthly salary and years of service in Germany and this severance pay calculator estimates your Abfindung instantly — the 0.5-months-per-year benchmark, what it means in months of pay, and an illustrative after-tax figure.
On a €4,200 monthly salary after 8 years in Germany, the standard severance estimate is €16,800 — 0.5 monthly salaries per year of service, equal to 4 months of pay. There is no automatic legal right to severance in most cases: it is usually negotiated, and the 0.5 factor is the benchmark courts and employers use as a starting point.
Researched by MixKhazana Team · Last updated 24 October 2026 · Data: §1a KSchG, §34 EStG (Fünftelregelung) and BMF guidance, 2026
German severance pay — Abfindung — is a one-off payment when employment ends. The formula used across Germany is simple: severance = 0.5 × gross monthly salary × years of service. It is the amount offered under §1a of the Employment Protection Act (KSchG) when an employer dismisses for operational reasons and the employee does not challenge the dismissal, and it is the benchmark most negotiations start from. The salary after tax in Germany guide explains what that monthly salary is worth after deductions, which matters when you judge whether a settlement is fair.
The 0.5 factor is a benchmark, not a law: older employees, long service, a weak dismissal case or a social plan (Sozialplan) can push it to 1.0 or higher, while a strong employer case can push it lower. Court-ordered dissolution severance is capped at 12 monthly salaries, rising to 15 or 18 for older, longer-serving employees under §10 KSchG. Critically, you have only three weeks from receiving notice to file a dismissal protection claim (Kündigungsschutzklage) — missing that deadline removes most of your leverage, so act fast and get legal advice early.
On tax: severance counts as taxable employment income but is exempt from social security contributions, which is why the net figure is better than an ordinary bonus of the same size. The Fünftelregelung (§34 EStG) softens the tax spike by spreading the payment over five years for tax purposes: the tax office compares tax on your ordinary income with tax on ordinary income plus one-fifth of the severance, and multiplies the difference by five. Since 2025 the employer no longer applies this in payroll — you claim the relief in your tax return, so more tax is withheld first and part is refunded later.
Answer block: according to the standard German practice confirmed by multiple labour-law sources in 2026, the rule of thumb is 0.5 gross monthly salaries per year of employment — for example, 10 years at €4,000 a month gives €20,000. That figure is a negotiation starting point, not a guaranteed entitlement.
| Standard factor | 0.5 months per year (§1a KSchG benchmark) |
| Court dissolution cap | 12 months (15–18 for older, long-serving staff) |
| Social contributions | Exempt — income tax only |
| Fünftelregelung | §34 EStG, claimed via tax return since 2025 |
| Claim deadline | 3 weeks for Kündigungsschutzklage |
At the standard 0.5 benchmark, 8 years on a €4,200 monthly salary gives €16,800 — 4 months of pay. Your actual settlement can be higher or lower depending on your case, age and any social plan.
No, not in most cases. A right exists only from a contract, a social plan, a §1a KSchG offer, a court settlement or a court-ordered dissolution. Most severance is negotiated to avoid a dismissal dispute.
Yes, severance is taxable employment income, but it is exempt from social security contributions. The Fünftelregelung under §34 EStG usually reduces the tax, claimed through your tax return since 2025.
It spreads a one-off payment over five years for tax purposes: tax is calculated on your income plus one-fifth of the severance, the difference is multiplied by five, and that is the tax on the severance. It softens the spike of receiving years of pay at once.
Severance alone does not trigger a blocking period (Sperrzeit). A blocking period threatens if you co-caused the ending, for example by signing a termination agreement without good cause, or if the notice period was not observed.
You have three weeks from receiving your notice to file a dismissal protection claim at the labour court. Missing it usually means the dismissal stands, and with it most of your severance leverage disappears.
Yes. The 0.5 factor is a starting point: weak dismissal grounds, long service, older age, maintenance obligations or a social plan can justify 1.0 or more, and some settlements exceed that. Legal advice before signing anything is strongly recommended.