The calculation of the transitional compensation follows a simple formula: for each full year of service 1/3 monthly salary, with a maximum of €94,000 or one year's salary in 2025. Use the gross salary including holiday pay and fixed allowances, excluding variable bonuses.
Example 1: Employee with 6 years of service and €3,000 monthly salary. Calculation: (6 x 1/3 x €3,000) = €6,000. Example 2: With 15 years of service and €4,500 salary: (10 x 1/3 x €4,500) + (5 x 1/2 x €4,500) = €11,250 (note the transitional arrangement for older years of service). Partial years count pro rata.
Use the online calculation tool of the Government for exact amounts. In case of dismissal during maternity leave or illness, protection rules apply, but the calculation remains the same. Employers must pay the compensation within one month after the dismissal date. In collective labour agreements, a higher compensation may have been agreed, which takes priority.
Tip: Keep payslips as evidence. In case of disputes, you can go to the subdistrict court within two months after dismissal.