The rules on severance pay in detail

Statutory severance pay is calculated according to the employee’s years of service and the last month’s gross salary (including all wages and benefits) before termination. Allowances for annual leave, Christmas and Easter are also incorporated in the severance pay, effectively increasing it by one sixth. The monthly severance amount is currently capped at EUR 6,969.60. The calculation also depends on whether the termination was done with or without notice. The following table gives the severance pay that the employer has to pay when no notice period is given. If a notice period is given, the employer need pay only half of these amounts:

Years of service Minimum statutory redundancy pay

Up to 12 months

none

Between one and four years

two months

Between four and six years

three months

Between six and eight years

four months

Between eight and ten years

five months

Ten full years

six months

11 full years

seven months

12 full years

eight months

13 full years

nine months

14 full years

ten months

15 full years

11 months

16 full years

12 months

 

Employees with 17 or more years of service at the same employer by 12 November 2012 are entitled to an additional month’s severance pay for each year of service, but the gross monthly salary over EUR 2,000 is not taken into consideration for this calculation. Thus, these employees are entitled to 12 months’ severance pay (per the above chart) plus the following:          

 

Years of service Additional amount

For 17 full years

+ EUR 2,000

For 18 full years 

+ EUR 4,000

For 19 full years 

+ EUR 6,000

For 20 full years 

+ EUR 8,000

For 21 full years 

+ EUR 10,000

For 22 full years

+ EUR 12,000

For 23 full years

+ EUR 14,000

For 24 full years

+ EUR 16,000

For 25 full years

+ EUR 18,000

For 26 full years

+ EUR 20,000

For 27 full years

+ EUR 22,000

For 28 full years

+ EUR 24,000

                                     

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Author: Kremalis Law Firm

Date: December 2019