Is your temporary contract not being renewed? Then you are probably entitled to a severance pay. This compensation is intended to make the transition to a new job easier. But how do you actually calculate what you are entitled to?

Severance Pay Formula

The severance pay amounts to:

1/3 monthly salary per year of service

For periods shorter than a year, this is calculated pro rata.

What counts as salary?

When calculating the severance pay, it’s about your gross monthly salary, including:

• holiday pay (8%)

• fixed bonuses

• shift allowance or structural overtime payments

Example calculations

• Example 1: An employee has worked 1 year with a salary of €2,400 per month.
  → Severance pay = 1/3 x €2.400 = €800.

• Example 2: An employee has worked 2 years with a salary of €3,000 per month.
  → Severance pay = 2 x 1/3 x €3.000 = €2.000.

• Example 3: A student had a contract of 8 months with a salary of €1.800 per month.
  → Severance pay = (8/12) x 1/3 x €1.800 = €400 (rounded).

Severance Pay Checklist

• 📄 Check whether your contract has been terminated or not renewed by the employer.

• 📅 Count the total number of months you were in service.

• 💶 Take your gross monthly salary including allowances.

• 📝 Calculate 1/3 monthly salary per year of service (pro rata for shorter duration).

• ⚖️ Have the calculation checked by an employment lawyer if you have doubts.

Frequently Asked Questions

1. Do I get a severance pay even with a short contract?
Yes, even with a contract of only a few months, you are entitled to a payment.

2. When does my employer have to pay?
Within 1 month after the end of the contract.

3. What if my employer refuses?
Then you can start a procedure at the district court through a lawyer within 3 months after the end of the employment.