Are social security contributions charged on German severance packages?

No, genuine severance indemnities paid for loss of employment are completely exempt from statutory social security contributions (pension, health, care, unemployment).

How is the tax relief claimed?

The tax relief is claimed on your annual personal income tax return filed with the local tax authority (Finanzamt).

DEGermany Severance Tax 1/5th RuleImpôts

Germany Severance Tax Calculator 2026 (Fünftelregelung § 34 EStG)

Calculate severance settlement net payouts and tax relief in Germany using the statutory 'one-fifth rule' (Fünftelregelung) under Sections 24 and 34 of the German Income Tax Act (EStG) in EUR (€).

Salaires et Rémunérations Impôt sur le Revenu Paie et Déductions

Résultat Calculé

Net Severance Payout (With 1/5th Rule)

€0

Données du Simulateur

Regular Gross Annual Income (Excluding Severance)

€

Sélection rapide :

Gross Severance Package Amount (EUR €)

€

Sélection rapide :

Résultat Calculé

Net Severance Payout (With 1/5th Rule)

€0

Severance Tax Liability (Reduced)

€0

Tax Savings from 1/5th Rule

€0

Effective Tax Rate on Severance

€0

Méthodologie de Calcul

Fünftelregelung Method: 1) Calculate tax on regular income (Tax A). 2) Calculate tax on regular income + 1/5th severance (Tax B). 3) Total tax on severance = (Tax B - Tax A) * 5. Net Severance = Gross Severance - Severance Tax.

Avertissement Légal et Pédagogique

This tool calculates tax relief on extraordinary termination severance payments under § 34 EStG.

Ce simulateur est conçu à des fins éducatives et informatives. Les résultats ne constituent pas un conseil financier, fiscal ou juridique contraignant.

Foire Aux Questions

The Fünftelregelung mitigates progressive tax bracket spikes. The severance amount is taxed as if only one-fifth of the lump sum were added to the taxable base, multiplied by five.

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