Online net severance calculator 2023
YOUR SEVERANCE CALCULATOR FOR 2023 - CALCULATE SEVERANCE NET
How much is my severance pay?
The amount of severance pay is generally not regulated by law. There is also no general legal entitlement to receive a severance payment. The amount of the severance payment depends largely on the negotiating skills of the individual parties.
It also plays a role whether you are protected by the Dismissal Protection Act and 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 in employment law can often result in a severance payment that is 1.5 to 2 times higher. With the free severance pay calculator, our calculation already gives you a first indication of an appropriate amount of severance pay.
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 evaluation basis for our severance calculator to give you an informed estimate of the average possible amount of your severance pay.
Formula for the severance pay calculator in the event of termination
The expected severance pay after a termination, usually results from the average amount of your gross monthly salary (average of the last 12 gross monthly salaries) and the length of employment (also called length of service) with your employer.
If you have been with the company for more than 6 months, your years of service will be rounded up to one complete year. This includes all periods in which you were employed by your employer as an employee, 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 × gross monthly wage × 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.
How do I enter the gross salary into the severance calculator?
To calculate the amount of severance pay, the average gross monthly salary for the last year must first be entered into the severance pay calculator. To determine this value, the last pay slip can be used. In the field at the bottom left of the payslip is the gross salary already paid for the current year. To this amount, the outstanding special payments, such as Christmas bonus and vacation pay, supplements and bonuses, which would still be due in the current calendar year, must be added. Finally, this sum is divided by the number of months already elapsed in the current calendar year. This result represents the average gross monthly salary of the last year, which must be entered into the severance calculator.
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. With our severance pay calculator you can calculate the taxes this taxation of your severance pay.
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:
- The severance payment is divided by 5 and added to the taxable annual income.
- The tax rate for the income with severance pay is calculated.
- The income tax for the annual income without severance pay is calculated.
- The difference between the two amounts is multiplied by 5.
- The result is the mitigated income tax to be deducted from the severance payment
Conditions for the quintuple rule are:
- That the severance payment is paid within one calendar year.
- 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?
Generally, you should calculate the possible amount of your severance pay with the severance pay calculator as soon as possible, as you only have 21 days to file a dismissal protection action after receiving your notice from your employer. Only timely and correct action can secure your possible claim.
Why should caution be exercised in termination and settlement agreements?
Such offers may seem attractive at first, but are usually not as lucrative as first assumed.
In this case, an attorney for labor law should definitely be consulted in order to negotiate an appropriate severance payment on the one hand and to avoid disadvantages in connection with unemployment benefits on the other hand.
With the severance calculator you can calculate a possible 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.
- 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.
- An expert in employment law, who will advise 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 for severance pay is still possible due to certain circumstances, although it can actually be assumed that you have no chance of receiving severance pay. To recognize these special circumstances is possible for a specialized lawyer in the field of labor law due to years of experience in exactly this area.
- A common problem in enforcing severance pay after a termination 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 right to severance pay, the advice of a lawyer is always recommended.
These calculations assume a severance factor of 0.5. The severance calculator calculates the severance amount of your severance pay with a factor suitable for your industry.
Length of service in years
Gross salary per month
Length of service in years
Gross salary per month
Length of service in years
Gross salary per month
Questions and answers - FAQ severance calculator 2023:
Here we answer the most frequently asked questions (FAQ) about the severance calculator and how exactly the severance payment is made up.
Does age matter for severance pay?
Age can play a role in severance pay in combination with length of service. The older the employee is, the higher the severance payment can be. Age also depends on other aspects, such as the industry and other social factors.
What counts as length of service?
Length of service includes the period during which you worked continuously for your employer from the beginning of the employment relationship until the end of the employment relationship. Interruptions such as parental leave or illness also count towards length of service, provided the employment relationship was not terminated during these periods.
Not included in length of service: Unpaid internships, temporary employment and employment as a freelancer.
What is the average amount of severance pay?
The employer and the employee are free to negotiate the amount of the severance payment. The so-called "standard severance payment" is 0.5 gross monthly salary per year of service. The exact amount depends on many factors that must be negotiated between the employer and the employee. In addition to length of service, these include factors such as age, industry and, in particular, the expected effectiveness of the notice given.
Is there a right to severance pay?
No, there is no general statutory entitlement to severance pay. Severance pay is only provided for in a social plan or, if applicable, in the event of termination for operational reasons within the meaning of Section 1 a KSchG. In most cases, severance pay is the result of a negotiation between the employer and the employee. In a lawsuit, the continuation of the employment relationship is usually disputed and the employer must prove the reasons for termination. In order to end the process for the employee and the employer, a settlement is usually reached with a severance payment. The amount of the severance payment depends on many factors, such as the industry, the length of service, the age and whether the employee has any maintenance obligations.
What are the components of the gross monthly salary?
The gross monthly salary that must be entered in the severance calculator includes not only the gross monthly salary, but also all salary components such as bonus payments and special payments. These payments include, in particular, bonus payments, premiums, vacation and Christmas bonuses, non-cash benefits, the company pension plan and non-cash benefits such as a company car.
For the severance calculator, all these salary components that have been paid or will be paid in the calendar year must be added up and then divided by the number of months already worked up to the end of employment in this calendar year. The resulting gross monthly salary is then entered into the severance calculator. It should be noted that the gross salary is the amount before deduction of taxes, soli and social security contributions for the severance payment calculation. It is not the amount paid out on the payroll.