Germany severance pay calculator
Calculate German severance pay (Abfindung) based on standard 0.5 factor, years of service, and tax savings under the Fünftelregelung.
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Abfindungen are exempt from statutory social security contributions (Sozialversicherungsbeiträge) if paid upon dismissal.
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About this tool
Calculate German severance pay (Abfindung) following dismissal or termination agreement (Aufhebungsvertrag). Calculates gross payout using the standard formula (0.5 × monthly salary × years of service) and estimates preferential tax withholding under the Fünftelregelung (§ 34 EStG).
How to use it
- 1 Enter your gross monthly salary before termination.
- 2 Enter your completed years of service with the company.
- 3 Choose your severance factor (0.5 is standard statutory benchmark).
- 4 Review your gross severance, estimated net payout, and tax savings under the Fünftelregelung.
Questions
What is the standard formula for severance pay in Germany?
Under § 1a KSchG, the standard rule-of-thumb is 0.5 gross monthly salaries for each full year of company service.
How does the Fünftelregelung save tax on severance pay?
The Fünftelregelung (§ 34 EStG) calculates income tax as if only one-fifth of the severance were received in that year, multiplying the incremental tax by five to mitigate bracket creep.
Are social security contributions deducted from German severance pay?
No. Genuine severance pay awarded for the loss of a job is legally exempt from statutory health, pension, care, and unemployment insurance contributions.
Is my data uploaded?
No. This tool runs in your browser, so your text and files never reach our server.
Is this tool free?
Yes. It’s free to use with no sign-up and no limits for normal use.
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