Severance pay calculator — international

What is severance pay?

Severance pay is compensation an employer owes an employee when ending the employment relationship. In most countries, it's a legal obligation, not a goodwill gesture. The amount typically depends on the employee's salary, how long they've worked there, and the country's labor code.

The range is enormous. The United States has no statutory severance requirement at all. Indonesia mandates up to 9 months of salary. France factors in age, tenure, and company size. Spain uses a flat 20 days of salary per year of service for justified dismissals, but 33 days for unfair ones. If you're hiring across borders, these differences directly affect your cost of doing business and your risk exposure if things go wrong.

How is severance pay calculated?

Most countries use some variation of "monthly salary x years of service x multiplier", but the details vary by country. The Netherlands uses a clean formula: one-third of monthly salary per year of service. The UK has a tiered system based on age brackets.

Some countries use fixed scales. The payout depends on which tenure bracket the employee falls into, not a per-year calculation. Others layer additional obligations like mandatory notice periods, 13th-month pay, or accrued leave payouts on top of severance. This calculator applies the specific formula for each country so you don't have to decode labor codes yourself.

Is severance pay the same as a redundancy payment?

In practice, yes. The terminology differs by region. In the UK and Australia, "redundancy pay" refers to the statutory payment when a role is eliminated. In the US and most of Europe, the same concept is called "severance." The underlying obligation is the same: compensating an employee whose employment ends through no fault of their own. This calculator covers both, regardless of what your country calls it.

Is severance pay taxable?

In most countries, yes. Severance pay is generally treated as taxable income, though the rules on timing, thresholds, and exemptions vary. Some countries tax it at a reduced rate or allow it to be spread across multiple tax years. Others exempt the first portion up to a statutory cap. The tax treatment matters when budgeting for total termination cost. What the employee receives after tax may be less than the gross amount you pay, but your obligation is based on the gross figure.

What's a typical severance package?

Market convention varies by region. In the US, where there's no statutory requirement, the common benchmark is 1 to 2 weeks of salary per year of service, but this is entirely negotiable. In much of Western Europe, statutory minimums start at around 1 month of salary per year of service, with contested dismissals often reaching 2 to 3 times that amount. High-protection countries like France, Italy, and Indonesia sit at the expensive end of the spectrum. Countries like Denmark, Singapore, and Hong Kong are more employer-friendly. The calculator above shows you exactly where each country falls.

How does an Employer of Record affect severance?

The statutory cost is the same whether you employ directly or through an Employer of Record. What changes is who carries the compliance risk. An EOR acts as the legal employer in-country, which means they handle notice periods, severance calculations, final pay, and documentation according to local law. If you don't have a legal entity in the country and aren't confident about the termination process, working through an EOR sharply reduces your exposure to unfair dismissal claims.