Question 1

How is mutual termination compensation calculated?

Accepted Answer

The specific mutual termination payment cannot be less than the legal severance pay. It is calculated as: 1/4 month of gross salary per year of service for the first 10 years, then 1/3 month per year beyond. The reference salary is the more advantageous between the average of the last 12 months and the average of the last 3 months (with pro-rata of annual bonuses).

Question 2

Can you negotiate a higher compensation?

Accepted Answer

Yes, absolutely. The legal minimum is just a floor. In practice, negotiated amounts are often higher, especially for employees with good negotiating power. Favorable factors include: significant seniority, rare skills, the employer's initiative in the termination, or a reorganization context. It is common to negotiate 25% to 50% more than the legal minimum.

Question 3

What is the tax treatment of mutual termination compensation?

Accepted Answer

Mutual termination compensation benefits from income tax exemption up to the highest amount between: the legal or contractual severance, 50% of total compensation, or twice the gross annual salary. Regarding social contributions, the tax-exempt portion is also exempt from contributions up to 2 times the annual Social Security ceiling.

Standard Mutual Termination Calculator 2026

⚠️ Aviso - Direito do trabalho

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