Getting dismissed is one of the most financially disorienting experiences a worker can have. And the confusion is made worse by the fact that most people have no idea what they're legally entitled to until the moment they need to know. Employment contracts are vague. HR departments are not always forthcoming. And the rules vary enormously across the EU.
This guide covers the severance pay rules in six major EU countries with real formulas, real examples, and the practical details that actually matter.
How Severance Pay Works: The Basic Formula
Across all six countries covered here, the underlying logic is the same:
Daily salary × Severance days = Severance amount
Where daily salary is your monthly gross salary divided by 30, and severance days are calculated based on your years of service at the country-specific rate.
Beyond the base severance, most countries also require payment of:
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Proportional vacation pay — any accrued but unused vacation days
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Proportional bonus — the portion of your annual bonus earned up to termination
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Notice period compensation — either worked notice or payment in lieu
The total package can be significantly larger than the base severance figure. Always calculate all three components.
Use our Severance Calculator to get the exact figures for your situation.
Luxembourg: Generous but Capped
Luxembourg's severance system is straightforward. The formula is:
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30 days of salary per year of service
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Maximum: 12 months of salary
For an employee earning €4,000/month with 5 years of service:
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Daily salary: €4,000 ÷ 30 = €133.33
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Severance days: 5 years × 30 days = 150 days
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Base severance: 150 × €133.33 = €20,000
The 12-month cap means that even with 20 years of service, severance cannot exceed 12 months of salary. This cap is relatively low compared to Belgium and France.
Notice periods in Luxembourg are calculated based on seniority:
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Under 5 years: 60 days
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5-10 years: 90 days
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Over 10 years: 180 days
Luxembourg also has specific rules around the reason for dismissal. Dismissal for serious misconduct (faute grave) eliminates the severance entitlement entirely. Dismissal for economic reasons (licenciement économique) follows a separate collective procedure for larger redundancies.
France: No Cap, Complex Calculation
France has no maximum cap on severance — you accumulate entitlement indefinitely. The formula:
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¼ month of salary per year for the first 10 years (approximately 8.33 days/year)
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⅓ month of salary per year beyond 10 years
For an employee earning €3,500/month with 8 years of service:
- Severance: 8 × (3,500 ÷ 4) = €7,000
For an employee earning €3,500/month with 15 years of service:
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First 10 years: 10 × (3,500 ÷ 4) = €8,750
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Next 5 years: 5 × (3,500 ÷ 3) = €5,833
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Total: €14,583
Notice periods in France:
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Under 2 years: 1 month
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2+ years: 2 months
One critical French distinction: the indemnité de licenciement (statutory severance) only applies to dismissal by the employer. Employees who resign are not entitled to statutory severance — though they may negotiate a rupture conventionnelle (mutual termination agreement), which does trigger severance entitlement and is increasingly popular precisely for this reason.
Germany: Moderate Rates, Seniority-Based
Germany's severance system is more moderate than France or Belgium. The formula:
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½ month of salary per year of service (15 days/year)
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Maximum: 18 months of salary
For an employee earning €4,500/month with 6 years of service:
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Daily salary: €4,500 ÷ 30 = €150
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Severance days: 6 × 15 = 90 days
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Base severance: 90 × €150 = €13,500
Notice periods in Germany escalate significantly with seniority:
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Under 2 years: 1 month
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2-5 years: 2 months
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5-8 years: 3 months
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8-10 years: 4 months
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10+ years: up to 7 months
One important German nuance: statutory severance (Abfindung) is not automatically guaranteed in Germany. The legal entitlement to severance only applies in specific circumstances — primarily when the employer invokes Section 1a of the Kündigungsschutzgesetz (KSchG), offering severance in exchange for the employee not contesting the dismissal. In practice, severance is almost always negotiated and paid — but it's technically a negotiated outcome rather than a pure legal entitlement in many cases.
German workers have 3 weeks to contest a dismissal through the labor courts (Arbeitsgericht). This tight deadline is critical — missing it generally waives your right to challenge.
Belgium: The Most Generous System
Belgium has the most generous severance system in this comparison — no cap and a high accrual rate. The formula uses a complex week-based calculation:
- Base: (3 + floor(years) × 3) weeks per year, up to a maximum of 78 weeks
For an employee with 5 years of service:
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Severance weeks: 3 + (5 × 3) = 18 weeks
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For a monthly salary of €3,800: 18 weeks × (€3,800 × 12 ÷ 52) = €15,738
Notice periods in Belgium are among the longest in the EU, calculated in weeks:
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The formula generates notice periods that can reach 126 days (18 weeks) for 5 years of service
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Maximum notice period: 78 weeks for very long-tenured employees
Belgium's 2014 unified statute (statut unique) harmonized severance rules between blue-collar and white-collar workers. Before this reform, white-collar workers had much more favorable terms. The current system provides strong protection for all workers regardless of collar color.
One Belgian peculiarity: the employer can choose to have the employee work the notice period or pay a severance indemnity in lieu. The employee cannot be forced to work notice if the employer prefers to pay — but the employee also cannot force the employer to pay instead of having them work notice.
Spain: Two-Tier System Based on Dismissal Type
Spain has a dual severance system depending on the type of dismissal:
Objective dismissal (economic, technical, organizational reasons — procedurally correct):
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20 days per year of service
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Maximum: 12 months of salary
Unfair dismissal (improcedente — employer cannot justify the dismissal):
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33 days per year of service
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Maximum: 24 months of salary
For an employee earning €2,800/month dismissed for economic reasons with 4 years of service:
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Daily salary: €2,800 ÷ 30 = €93.33
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Severance days: 4 × 20 = 80 days
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Base severance: 80 × €93.33 = €7,467
If the same dismissal were deemed unfair:
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Severance days: 4 × 33 = 132 days
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Base severance: 132 × €93.33 = €12,320
Notice periods in Spain are relatively short — a flat 15 days regardless of seniority for objective dismissals. This is the shortest notice period in this comparison.
Spanish labor courts are actively used — workers who believe their dismissal was unfair routinely challenge it, and settlements (acuerdos de conciliación) are very common before reaching a full hearing.
Portugal: Modest Rates, Long Maximum
Portugal's severance system is more conservative than its Iberian neighbor:
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12 days per year of service
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Maximum: 240 days (8 months) of salary
For an employee earning €1,800/month with 6 years of service:
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Daily salary: €1,800 ÷ 30 = €60
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Severance days: 6 × 12 = 72 days
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Base severance: 72 × €60 = €4,320
Notice periods in Portugal:
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Under 1 year: 15 days
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1-3 years: 30 days
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3-5 years: 30 days
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5+ years: 60 days
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10+ years: 75 days
Portugal reformed its severance system significantly in 2012, reducing from 30 days/year to the current 12 days/year. Workers hired before November 2011 may have transitional rights that preserve higher accrual rates for their pre-2012 service period — worth checking if you've been with an employer for a long time.
Side-by-Side Comparison
| Country | Days/year | Cap | Notice (5 years) |
|---------|-----------|-----|------------------|
| Luxembourg | 30 | 12 months | 90 days |
| France | ~8.33 (no tier 2) | None | 60 days |
| Germany | 15 | 18 months | 60 days |
| Belgium | ~21 (week formula) | None | 126 days |
| Spain | 20/33 | 12/24 months | 15 days |
| Portugal | 12 | 240 days | 30-60 days |
What to Do If You're Being Dismissed
Regardless of country, the same principles apply:
1. Don't sign anything immediately. Employers sometimes present separation agreements at the moment of dismissal. You are never legally required to sign on the spot. Take time to review and ideally consult a lawyer or union representative.
2. Calculate everything. Base severance is just one component. Add accrued vacation, proportional bonus, and notice compensation. The total is often 30-50% higher than the base severance figure.
3. Know your deadlines. Challenge periods are short — 3 weeks in Germany, 1 month in France, 2 months in Spain. Missing these deadlines generally waives your rights permanently.
4. Consider negotiating. Employers often prefer a clean settlement to litigation risk. If you have grounds to challenge, use them as leverage in negotiation rather than immediately going to court.
5. Use official resources. Every EU country has a labor inspectorate and labor courts accessible to workers. They are significantly more worker-friendly than in many non-EU countries.
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