Online net severance calculator 2022

Calculate taxes on your severance pay for 2022

How much is my severance pay?

The amount of severance pay is generally not regulated by law, but can be predicted for many cases using our severance calculator. The amount of the severance payment depends largely on the negotiating skills of the individual parties. 

It also plays a role whether the notice of termination given is legally contestable. As a general rule, each employment relationship is unique and must therefore be considered on its own merits.

Keep in mind that the expertise and negotiating skills of an expert can often result in a severance payment that is 1.5 to 2 times higher. With the free severance calculator, you will already receive an initial indication of an appropriate severance amount.

Calculation basis for the severance pay calculator

We have used current labor law court decisions and settlements from the past as the basis for calculating our severance pay calculator. 

This collected data provides the valuation basis for our severance calculator to give you an educated guess on the potential amount of your severance pay.

Severance calculator


Your expected settlement amount is as follows

0 €. *

The chances of getting a fair settlement are much higher with a lawyer.

* The above amounts do not constitute a legal assessment but are indicative.
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Formula for the severance pay calculator in the event of termination

The expected severance payment is usually based on the average amount of your gross monthly salary and the length of employment with your company.

If you have been with the company for more than 6 months, the number is rounded up to a complete year of service. This includes all periods during which you were employed by your employer, including parental leave, for example.

With regard to your gross monthly salary, your employer will try to limit this to the basic salary in order to calculate your severance pay as low as possible. However, for the calculation of the severance pay and thus also for the entry in the severance pay calculator, all salary components can be added to the basic salary.

The following formula is usually used to calculate the amount of severance pay:

Factor x gross monthly wage x number of years of employment

Normally, the factor applied is 0.5, which means that the severance payment is half a gross monthly salary per year of employment.

The greater the doubts about the effectiveness of a termination, the higher the factor can be. It also plays a role in which industry you work and whether you proceed against your termination without or with a lawyer.

Net settlement

Do I have to pay tax on my severance pay?

Yes, since 01.01.2006, severance pay is generally subject to tax. Therefore must every severance pay received by an employee must be fully taxed. You can calculate this taxation of your severance pay with our severance pay calculator.

Can I save taxes when I receive a severance package?

If a termination for operational reasons takes effect in November or December of a year and a severance payment is paid, there is an option to split the severance payment over two years. For the taxable employee, this results in the Possibilitypossibilityto keep the tax contributions incurred as low as possible.

What is the quintuple rule?

In order to relieve the employee a little, there is the quintuple regulation, which allows the severance pay to be divided up over five years for tax purposes.

With the one-fifth rule, the amount of tax is calculated as follows:

  1. The severance payment is divided by 5 and added to the taxable annual income. 
  2. The tax rate for the income with severance pay is calculated.
  3. The income tax for the annual income without severance pay is calculated.
  4. The difference between the two amounts is multiplied by 5.
  5. The result is the mitigated income tax to be deducted from the severance payment

Conditions for the quintuple rule are:

  1. That the severance payment is paid within one calendar year.
  2. That the severance pay and any other income by the end of the year must be greater than the salary that will be lost by the end of the year.

In our severance calculator, the one-fifth rule is applied for taxation.

What taxes/contributions must be paid in addition to income tax in the case of a severance payment?

From the severance pay employees do not have to pay contributions to pension, health, long-term care and unemployment insurance. Only in the case of voluntarily statutorily insured persons does the severance pay count as insurable income, so that contribution payments are necessary.

In the case of all employees, the applicable rate for church tax is deducted from the severance payment (8% or 9%) plus the Soli, which is calculated on a tax burden of €16,956 upwards (married couples in the splitting tariff: €33,912).

Our severance calculator takes into account all the above-mentioned tax deductions.

When should a termination be responded to?

In general, you should calculate the possible amount of your severance pay with the severance pay calculator as soon as possible, since you only have 21 days to file a dismissal protection action.

Why should caution be exercised in termination and settlement agreements?

Such offers may seem profitable at first, but are usually not as lucrative as first assumed. 

Here, it is essential to consult an attorney for labor law in order to negotiate a severance payment that you have earned, on the one hand, and to avoid a disadvantage in connection with unemployment benefits, on the other. 

With the severance calculator you can calculate a realistic severance amount.

Why should you let experts enforce your severance pay?

In principle, it is possible to represent yourself before the labor court and conduct the negotiations without external assistance. However, data from the past has clearly shown that in such a case, the highest possible severance payment is usually not achieved. As a rule, severance payments are higher if you have a lawyer support you and represent you in court.

  1. Employers are supported in court by specialists in labor law. Their goal is to pay as little severance pay as possible. Against such an expert, a negotiation becomes very difficult for a layperson. Therefore, the desired severance pay can usually not be achieved.
  2. An expert who advises you on your action for protection against dismissal knows exactly which details are important in such a negotiation. Often, an action for protection against dismissal is still possible due to certain circumstances, although it can actually be assumed that you have no chance of receiving a severance payment. To recognize these special circumstances is possible for a specialized lawyer due to years of experience in exactly this area.
  3. A frequent problem in enforcing a severance payment is compliance with form and deadlines. Accordingly, an action for protection against dismissal must be filed correctly and, above all, within a narrow time window. In order not to make any unnecessary mistakes here and lose the chance of a severance payment, the advice of a lawyer is always recommended.

Example calculations:

These calculations assume a severance factor of 0.5. The severance calculator calculates your severance pay with a factor that fits your industry.

Severance pay

Length of service in years

Gross salary per month

7.500 €

5

3.000 €

15.000 €

10

3.000 €

22.500 €

15

3.000 €

30.000 €

20

3.000 €

Severance pay

Length of service in years

Gross salary per month

10.000 €

5

4.000 €

20.000 €

10

4.000 €

30.000 €

15

4.000 €

40.000 €

20

4.000 €

Severance pay

Length of service in years

Gross salary per month

12.500 €

5

5.000 €

25.000 €

10

5.000 €

37.500 €

15

5.000 €

50.000 €

20

5.000 €

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