Question 1

How is severance calculated beyond 10 years?

Accepted Answer

Beyond 10 years of seniority, legal severance is calculated in two tiers: 1/4 month's salary per year for the first 10 years, then 1/3 month's salary per year beyond 10 years. For example, for 15 years seniority with a €3,000 salary: (1/4 × 3,000 × 10) + (1/3 × 3,000 × 5) = €7,500 + €5,000 = €12,500. This two-tier formula makes severance proportionally higher for employees with long seniority.

Question 2

Is there a cap on severance pay?

Accepted Answer

There is no legal cap on severance pay itself. However, for tax and social contribution exemptions, severance is exempt up to 2 times the annual Social Security ceiling (PASS), approximately €92,736 in 2026. Beyond this amount, severance is subject to social contributions and income tax. Collective agreements may provide for severance above the legal minimum without a cap.

Question 3

Is partial seniority taken into account?

Accepted Answer

Yes, seniority is calculated precisely, taking into account complete months and month fractions. If an employee has 10 years and 6 months of seniority, the calculation will account for the first 10 years at 1/4 rate, then the additional 6 months at 1/3 rate. Contract suspension periods (illness, parental leave, sabbatical) are treated differently depending on their nature: occupational illness leave and maternity leave count fully toward seniority.

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