Germany has no general statutory right to severance pay. The number you ultimately receive is the result of a negotiation, driven by how strong your dismissal-protection claim is. That said, courts and lawyers have developed a customary starting point — the Regelabfindung — that anchors most discussions.
The Regelabfindung formula
The standard formula is:
0.5 × gross monthly salary × completed years of service
So an employee with a €5,000/month gross salary and 6 years of service would expect roughly €15,000 (5,000 × 0.5 × 6) as a starting point. The formula derives from § 1a KSchG, which sets it as the statutory amount where the employer offers severance in the dismissal letter for waiver of the claim.
What moves the number up
- A weak dismissal. If the substantive grounds look poor (e.g. no proper social selection, missing alternative-position check), severance can climb to one full monthly salary per year of service or more.
- Long notice still to run. Every month of notice period left adds leverage — the employer would otherwise have to pay you that anyway.
- Special protection. Pregnant employees, parental-leave employees, severely disabled employees, and works-council members can routinely negotiate well above the standard formula.
- Senior age and long tenure. Employees over 55 with 10+ years of service tend to achieve significantly higher numbers — both because reemployment is harder and because the social-criteria score is higher.
- Employer in a hurry. If the employer needs the position vacated immediately (acquisition, restructuring), they pay more for a fast exit.
What moves the number down
- A strong operational case. Clean restructuring with a proper social plan and full process compliance.
- Behavioural grounds. Where the employer has a documented chain of warnings and a recent breach, severance is harder to extract.
- Short tenure. Most settlements respect the Regelabfindung floor only loosely below two years.
- Social plan in place. If the works council has agreed to a Sozialplan that fixes severance amounts, individual negotiation is constrained.
Other things often included in a settlement
- Reference letter (Zeugnis). A negotiated Grade 2 (“stets zu unserer vollen Zufriedenheit”) with a positive closing formula is sometimes more valuable than an extra month of severance.
- Garden leave with continued benefits. Paid release until the end of the notice period, often without offsetting other income.
- Carry-over of unused vacation as pay.
- Return of work materials and confidentiality terms.
- Outplacement support — increasingly common for senior roles.
Real-world ranges by tenure and salary
| Tenure | Weak dismissal (high payout) | Typical Regelabfindung | Strong dismissal (low payout) |
|---|---|---|---|
| 2 years | ~1.5–2 monthly salaries | ~1 monthly salary | ~0.25–0.5 monthly salaries |
| 5 years | ~4–6 monthly salaries | ~2.5 monthly salaries | ~1 monthly salary |
| 10 years | ~9–14 monthly salaries | ~5 monthly salaries | ~2.5 monthly salaries |
| 20 years | ~20–28 monthly salaries | ~10 monthly salaries | ~5 monthly salaries |
The “weak dismissal” column assumes one or more of: defective social selection, missing vacancy check, no works-council consultation, or a protected employee category. The “strong dismissal” column assumes a clean operational case with a Sozialplan in place.
Beyond severance — what else to put in the settlement
- A negotiated Zeugnis with at least Grade 2 wording and a positive closing formula.
- Garden leave for the remainder of the notice period at full pay, without offset for other income.
- Vacation payout (Urlaubsabgeltung) on top of severance.
- Bonus accrual for the in-flight bonus year, pro-rated to your last working day.
- Return of company hardware terms — clear, no late surprises.
- An outplacement budget (~€5,000–€20,000 for senior roles is common).
- A confidentiality clause that doesn’t muzzle your future job search.