Glossary

In English: Severance pay

Money for losing the job. German law gives no general right to it. It is the price the company pays to avoid a court case it might lose. A common starting point is 0.5 monthly salaries per year of service.

Watch out: Severance is fully taxable.

Legal basis

KSchG §1a, §9, §10. Checked against the statute text on 12 November 2026.

Open the simulator See Abfindung in action: work through a layoff case where it decides the outcome.

This page explains German employment law in general terms. It is not legal advice for your situation. If a layoff affects you, talk to an employment lawyer, your union or your Betriebsrat.