Severance pay upon termination:
Your rights, opportunities and options for action

Severance pay upon termination – what you should know

Are you facing dismissal or have you already been fired? Have you been dismissed under misleading circumstances, or are the reasons given by the employer unjustified? Dismissal can feel unfair, and often they are not legally viable. Therefore, your chances of successfully challenging dismissal as an employee are significant.

We understand how stressful such a situation can be, after all, your income depends on your employment. Receiving a letter of termination can quickly lead to financial and social challenges. Therefore, it is crucial to seek professional advice. As specialist employment lawyers, we know the strategies that employees can use to defend themselves against termination. But act quickly, because employment law requires a short deadline of just two weeks to file a wrongful termination claim.

severance pay calculator

your legal severance pay claim according to Section 1a KSchG You can calculate this here. This can also serve as a guide for a possible severance payment in the context of the dismissal protection process.

severance pay calculator
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Requirements, amount and tax treatment of severance pay upon termination of employment

A Entitlement to severance pay upon termination This right exists only in certain legally regulated exceptional cases, such as a severance offer under Section 1a of the German Protection Against Unfair Dismissal Act (Kündigungsschutzgesetz) or within the framework of a social plan. In the vast majority of cases, however, the entitlement arises from negotiations between employee and employer or from a settlement reached in the context of an unfair dismissal claim before the labor court. A prerequisite for this is generally that the employment relationship is subject to protection against unfair dismissal and that the dismissal is legally reviewable.

The Amount of severance pay is not strictly prescribed, but is often based on the common rule of thumb of 0.5 gross monthly salaries per year of employment. Depending on the individual case, the severance payment can be significantly higher or lower. Key factors include the length of service, the employee's age, salary level, existing maintenance obligations, and the likelihood of success in an unfair dismissal claim. You can easily obtain an initial, realistic estimate of the potential severance payment amount with our severance calculator undertake this. This provides you with non-binding guidance and helps you better assess your negotiating position. Severance payments are subject to income tax but not to social security contributions. Under certain conditions, the so-called One-fifth rule to be applied for tax relief. Compliance with the [relevant regulations/guidelines] is also particularly important. three-week period for filing a lawsuit after receipt of the notice of termination, as missing the deadline can significantly hinder or even prevent the enforcement of a severance payment.

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How we support you

If you are dismissed, we will be at your side to help you make the best of the situation. With our many years of practical experience, we advise and represent you throughout the entire dismissal protection process - from receiving the letter of dismissal to the hearing before the employment court. It is crucial to clarify the background to the dismissal in detail. Depending on the prospects of success, it may make sense to insist on continuing your employment or to negotiate a severance payment. Our goal is to find an amicable solution that does justice to your rights and claims.

As your lawyer, we will handle all correspondence with your employer, the works council, the labor court and the relevant authorities to relieve you of as much stress as possible during this difficult time. We will be happy to clarify the legal and court costs as well as your possible claims against the employer in advance so that you know what to expect.

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Questions about severance pay upon termination

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