If your employer pays your salary late or stops paying altogether, you are not powerless. German law gives you strong rights: default interest after a single day’s delay, a contractual right to refuse further work (Zurückbehaltungsrecht) after 1–2 months of arrears, a right to extraordinary termination with severance in some cases, and — if the employer is insolvent — three months of Insolvenzgeld via the Bundesagentur für Arbeit. Acting quickly is essential, because most employment contracts contain Ausschlussfristen that bar your claim after 3 months.
When salary is „late”
Your salary becomes due on the date stated in your employment contract — typically the last working day of the month, or the first working day of the following month. From the day after the due date, the employer is in default (Verzug) under § 286(2) BGB without any further warning being required, because the date for payment is fixed by the contract.
Default triggers:
- Default interest: 5 percentage points above the ECB base rate (§ 288(1) BGB). For consumers, this is currently around 8.12% p.a. (June 2026). Calculated from the day after the due date until the day of actual payment.
- Right to demand payment plus a flat €40 reminder fee (§ 288(5) BGB).
- Right to refuse further work (Zurückbehaltungsrecht) after substantial arrears, with continued pay.
- Right to extraordinary termination (§ 626 BGB) after substantial arrears not cured after warning.
- Right to claim damages for any quantifiable loss caused by the delay (overdraft interest on your bank account, missed bill payments, etc.).
Step-by-step response when salary is late
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Day 1–3: Send a written reminder (Mahnung)
A short, polite written reminder setting a 7-day payment deadline. Reserve all legal rights (default interest, Zurückbehaltungsrecht, extraordinary termination). Sent by email and registered post.
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Day 8–14: Formal Geltendmachung
Formal written demand citing § 614 BGB (wage claim) + § 288 BGB (default interest) with a new 7-day deadline and explicit reservation of the right to file a Zahlungsklage and to suspend work performance.
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Day 15+: Zurückbehaltungsrecht
After substantial arrears (typically 1.5–2 months’ salary), you can refuse to come to work — with continued pay — until the arrears are cleared. Strict procedural requirements (see below).
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Day 21+: Zahlungsklage at the Arbeitsgericht
File a wage-payment claim at the labor court. The Streitwert is the sum of unpaid wages; the lawyer fee is modest under RVG. Most cases settle at the Gütetermin with payment within 30 days.
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Insolvency case: file with the Bundesagentur für Arbeit
If the employer is insolvent, the last 3 months of unpaid wages are covered by Insolvenzgeld (insolvency money). Filing deadline: 2 months from the insolvency opening.
The Ausschlussfrist trap
The clock runs on each individual wage period separately. If your March salary is unpaid: the written assertion deadline for March is end of June (3 months from due date); the litigation deadline is end of September. The April salary clock runs separately, and so on.
See our Ausschlussfrist article for the full mechanics. The single most common reason expat employees lose otherwise-valid wage claims is missing the Ausschlussfrist.
The right to refuse work (Zurückbehaltungsrecht)
Under § 273 BGB, you have a right to refuse further work performance until the employer has paid the overdue wages. This is one of your strongest enforcement tools — but it has strict procedural requirements:
- Substantial arrears: typically at least 1.5–2 months of unpaid net wages. Single-day delays do not justify it.
- Prior warning: a written warning to the employer announcing the intention to exercise the Zurückbehaltungsrecht if payment is not made by a specific deadline.
- Proportionality: the refusal must be proportionate to the arrears.
- Continued pay: during the lawful exercise of the right, you remain entitled to your full salary (the employer is in Annahmeverzug — default of acceptance).
The pitfall: if your right does not exist (the arrears are too small, or no prior warning was given), the refusal counts as unauthorized absence — grounds for warnings and even dismissal. Always get legal advice before exercising it.
Extraordinary termination by the employee
Sustained, substantial wage arrears can justify an extraordinary termination by the employee under § 626 BGB. The thresholds are roughly:
- 2+ months of complete non-payment, or
- 3+ months of significant partial non-payment, or
- Repeated chronic late payments over a longer period after warnings.
The employee must give the employer prior warning and a final deadline. Where the conditions are met:
- Employment ends without notice on the day of the extraordinary termination.
- The employee has a damages claim against the employer for the lost notice-period wages (Schadensersatz für entgangenen Verdienst — typically equal to several months of salary).
- The damages claim functions effectively as a severance.
- No Sperrzeit (waiting period) is imposed by the Arbeitsagentur, because the employer caused the termination.
This route is powerful but procedurally sensitive — the prior warning, the specific reasons, and the timing all matter. Always with legal support.
Insolvency: Insolvenzgeld
If the employer files for insolvency (Insolvenzantrag), the employees’ last 3 months of unpaid net wages before the insolvency opening are paid by the Bundesagentur für Arbeit as Insolvenzgeld under §§ 165 ff. SGB III. Key points:
- The 3-month period runs backwards from the day of the insolvency opening.
- Capped at the Beitragsbemessungsgrenze (about €7,550/month gross in 2026 West).
- Net only — gross deductions (tax, social security) are not paid out, but the employer’s social-security obligations are taken over by the Bundesagentur.
- Application deadline: 2 months from the day the employee learns of the insolvency opening.
- Application form is available on the Bundesagentur website (Antrag auf Insolvenzgeld).
For wages older than the 3-month Insolvenzgeld window, claims must be filed in the insolvency proceedings (Insolvenztabelle) and ranked. Recovery rates are typically low (0–20%).
What counts as „salary” in default claims?
- Base salary — always.
- Commissions earned but not paid — yes.
- Bonus claims that have crystallized (i.e., the entitlement is no longer discretionary) — yes.
- Overtime pay where contractually agreed — yes.
- Vacation pay (Urlaubsentgelt) for vacation already taken but not paid — yes.
- Urlaubsabgeltung at end of employment — yes (subject to separate rules).
- Allowances (housing, mobility, expenses) where contractually agreed — yes.
- Profit-sharing where vested — yes.
- Reimbursement of business expenses — typically yes (separate basis, but enforceable alongside).
Real-world examples
Documentation to preserve
- All payslips received (Lohnabrechnungen).
- Bank statements showing wage receipts and non-receipts.
- Employment contract (for the due date and any Ausschlussfrist).
- All correspondence with the employer about pay (emails, WhatsApp, letters).
- Any internal HR communications about company cash flow or upcoming delays.
If you suspect insolvency is coming, request a copy of all of these from HR before filing or before announcing your departure — once insolvency is opened, access can become more difficult.
Frequently asked questions
Can the employer just say „cash flow problem, please be patient”?
No — the wage claim is absolute. Cash flow is the employer’s risk. Default interest accrues regardless. The employee’s enforcement rights are not suspended by the employer’s financial difficulty.
What if my employer asks me to defer salary as a „loan” to the company?
Be very careful. A converted-to-loan claim ranks lower in insolvency than a wage claim, and may not be covered by Insolvenzgeld. Get legal advice before signing anything that re-characterizes your wage claim.
Does it help to threaten extraordinary termination?
Yes — in our experience, a properly drafted „warning of impending extraordinary termination” letter often catalyzes payment within 7–14 days. Even financially stressed employers prioritize keeping key employees who have signalled they will leave.
Can I just resign and demand payment later?
You can resign with notice, but ordinary resignation does not give you damages for lost notice-period wages. Only extraordinary termination on the employer’s fault gives you that damages route. The procedural conditions matter — talk to a lawyer first.