German Severance Tax Calculator 2027: what is left if paid in 2027?
If your severance is only paid in 2027, the tax office uses the 2027 tariff: on current figures a basic allowance of €12,564 (2026: €12,348) and the 42% rate from €70,601 of taxable income. This calculator uses those figures to show what is left net after income tax with the one-fifth rule, solidarity surcharge and church tax, and what your employer withholds first. Whether a payment in the new year pays off depends above all on your other income in that year.
Severance net, with the one-fifth rule
EUR
Example calculation with default valuesView sources
The one-fifth rule reduces the tax on this severance noticeably, because one fifth of the amount lands on a flatter part of the tariff than the whole sum would.
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Your details
If you know the amount from the offer or the termination agreement, enter it directly. Otherwise the calculator estimates a usual severance with the statutory rule of thumb.
The agreed amount, paid within a single calendar year. Unused vacation, bonuses and salary up to your leaving date are not part of it, they are ordinary pay.
Your taxable income (zu versteuerndes Einkommen) is stated on your last tax assessment. If you do not have it to hand, the calculator estimates it from your annual gross salary.
For the year in which the severance is paid, after all deductions: the employee lump sum, pension and insurance deductions and other allowances are already taken off. The figure "zu versteuerndes Einkommen" on your last tax assessment is a good guide.
Joint assessment uses the splitting tariff and the doubled solidarity surcharge exemption. The calculator estimates payroll withholding only for unmarried people, because for married people it depends on the tax class.
Only if you belong to a church that levies church tax. The rate depends on the federal state you live in.
Optional. Unemployment benefit is tax free but raises the tax rate on your other income and on the severance (progression proviso, section 32b EStG). Sickness benefit, parental allowance and short-time work allowance work the same way, you can include them here.
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Side by side
Difference+2,048.89 EUR
Calculation and comparison
- Income tax on the severance, with the one-fifth rule
- 13,850 EUR
- Solidarity surcharge on the severance
- 270.96 EUR
- Total taxes on the severance
- 14,120.96 EUR
- What your employer withholds first (approx.)
- 16,543.45 EUR
- What comes back with your tax return (approx.)
- 2,422.49 EUR
- Income tax on the severance, without the one-fifth rule
- 15,681 EUR
- Saving from the one-fifth rule (income tax)
- 1,831 EUR
- Effective income tax rate on the severance
- 34.63 percent
- Effective rate without the one-fifth rule
- 39.20 percent
- Income tax on your income without the severance
- 8,777 EUR
- Total income tax for the year
- 22,627 EUR
Good to know
Since 2025 your employer no longer applies the one-fifth rule in payroll. It taxes the severance like any other one-off payment and withholds a flat 5.5 percent solidarity surcharge on it once the annual wage tax exceeds the exemption. The withholding and refund figures here are approximations: payroll works with your expected annual wage, the standard pension and insurance allowance and your tax class, not with your taxable income. They assume tax class I and a taxable income that comes from your wages with this employer in the same year. If the severance is paid in the year after you leave, alongside a new job, or you have other income, the withholding can differ considerably. The money only comes back with your income tax return: enter the severance in Anlage N as compensation to be taxed at the reduced rate.
- A genuine severance, meaning compensation for the loss of the job, carries no social security contributions. Remuneration paid alongside it, such as unused vacation, bonuses or overtime, does.
Non-binding estimate under section 34 EStG, the 2027 income tax tariff on current and partly provisional figures, section 32b EStG and the Solidarity Surcharge Act. Not modelled: caps and remission of church tax, child allowances for solidarity surcharge and church tax, other extraordinary income, loss carry forwards, and an employee lump sum on the unemployment benefit, which is normally already used up by wages and severance. The concentration-of-income test is assumed, not checked. Withholding and refund are approximations, and the rule of thumb for the severance amount is not an entitlement. Not tax or legal advice.
The link carries your inputs, not the result: whoever opens it calculates with the current figures.
What changes in 2027 compared with 2026
| Figure | 2026 | 2027 | Status |
|---|---|---|---|
| Basic tax-free allowance | €12,348 per year | €12,564 per year | draft |
| 42% top rate from | €69,879 | €70,601 | draft |
| 45% rate from | €277,826 | €250,000 | draft |
| 47% rate from | did not exist | €280,000 | draft |
| Solidarity surcharge exemption (wage tax) | €20,350 per year | €20,350 per year | unchanged |
| Employee lump-sum deduction | €1,230 per year | €1,430 per year | draft |
Severance in 2026 or 2027: which year is better?
In most cases the better year is the one in which your other income is lower; after leaving at the end of a year, that is often 2027. The less you otherwise earn in the year of payment, the more the one-fifth rule in section 34 EStG saves, and it applies unchanged in 2027, still only through the tax return and not in payroll. Take care with a high income or a large severance: in 2027 the 45% rate already starts at €250,000 (2026: €277,826), and a 47% rate applies from €280,000. If your other income plus one fifth of the severance reaches these ranges, 2027 can cost more even with somewhat lower other income. Then compare both years with your own figures, here and in the severance calculator for 2026.
The formula
Net = severance minus the income tax, solidarity surcharge and church tax it causes. Income tax with the one-fifth rule = 5 x (tax on taxable income plus one fifth of the severance, minus tax on taxable income without the severance), using the 2027 income tax tariff on current figures. The calculator computes surcharge and church tax on the income tax of the whole year, with and without the severance; the surcharge is only due once that tax exceeds €20,350 per person.
Worked example 2027
Example with the calculator defaults and the 2027 figures: with a taxable income of €45,000 before the severance and a severance of €40,000, the severance costs €13,850 in income tax under the one-fifth rule plus €270.96 solidarity surcharge, without church tax. That leaves €25,879.04 net. Without the rule the income tax would be €15,681, so the rule saves €1,831 there. Your employer first withholds about €16,543.45, and about €2,422.49 comes back with your tax return.
Key figures for 2027
| One-fifth rule | unchanged in 2027, still only through the tax return, not in payroll |
|---|---|
| Basic allowance 2027 | €12,564 per person (2026: €12,348) |
| 42% rate from | €70,601 of taxable income (2026: €69,879) |
| 45% rate from | €250,000 (2026: €277,826) |
| 47% rate from | €280,000 (2026: did not exist) |
| Solidarity surcharge exemption 2027 | €20,350 of income tax per person, doubled for a joint assessment |
| Employee lump sum 2027 | €1,430 (2026: €1,230), used only when estimating from gross salary |
Figures verified:
Severance in 2027: what you need to know
For tax purposes what counts is the year in which the severance reaches your account (cash principle, section 11 EStG). If it is paid in 2027, the 2027 tariff and allowances apply. So work with your taxable income for 2027: anyone leaving at the end of 2026 often has little other income in 2027, and that is exactly when the one-fifth rule helps most.
The 2027 tariff on current figures: basic allowance €12,564, 42% from €70,601, 45% from €250,000, 47% from €280,000. If your other income already sits in one of these linear ranges and the whole severance stays inside it, the one-fifth rule gains nothing; at the boundary between two ranges a small benefit can remain. The calculator shows you how it works out in your case.
Nothing changes about the procedure in 2027: your employer deducts the full wage tax and a flat 5.5 percent solidarity surcharge, and you only get the one-fifth rule through your tax return for 2027. The surcharge is only due once the year’s income tax exceeds €20,350 per person, and above that it grows in the phase-in zone at 11.9 percent of the excess.
To estimate taxable income from gross salary, the calculator uses the 2027 employee lump sum of €1,430 (2026: €1,230) and the 2027 social insurance figures. The statutory rule of thumb for the size of a severance, half a monthly salary per year of service under section 1a KSchG, does not depend on the year.
Frequently asked questions about 2027
- Should my severance be paid in 2026 or in 2027?
- What usually decides is your other income in the year of payment. If you leave at the end of 2026 and earn less in 2027, the one-fifth rule usually saves clearly more with a payment in 2027. With a high income or a large severance the new tariff can turn this around: in 2027 the 45% rate already starts at €250,000, and a 47% rate applies from €280,000. If your other income plus one fifth of the severance reaches that far, 2027 can cost more even with somewhat lower other income. If you receive unemployment benefit in 2027, it raises the tax rate through the progression proviso; enter it in the calculator. In any case, compare with the severance calculator for 2026. You set the date in the termination agreement, and as long as the severance is not yet due you can move it by mutual agreement (Federal Fiscal Court, judgment of 11 November 2009, IX R 1/09).
- What changes in 2027 for the tax on a severance?
- Nothing in the rules: the severance stays fully taxable, the one-fifth rule applies unchanged, and employers still do not apply it in payroll. The tariff figures change, on current figures: basic allowance €12,564, 42% from €70,601, 45% from €250,000 and a 47% rate from €280,000. The solidarity surcharge exemption is €20,350.
- Will my employer apply the one-fifth rule in 2027?
- No. The one-fifth rule has not existed in payroll since 2025, and no return has been adopted for 2027. Your employer taxes the severance at the full progression and withholds a flat 5.5 percent solidarity surcharge on it once the annual wage tax exceeds the exemption. You get the relief with your tax return for 2027, which you can file from the following year.
- Are the 2027 figures final yet?
- Not all of them. On current figures part of the 2027 tariff is still a draft and can change in the legislative process; the notice at the top of the page shows what is still open. The rules the calculation follows are fixed: one-fifth rule, solidarity surcharge with exemption and phase-in zone, progression proviso. As soon as the final figures are published, the calculator uses them.
- Can I split the severance between 2026 and 2027?
- That normally costs you the one-fifth rule: it requires the severance to be received within a single calendar year, and only small partial payments of up to ten percent of the main amount are harmless. Splitting can therefore only pay off if the one-fifth rule gains you nothing anyway, for example because your other income is already in the top-rate range.
- How does unemployment benefit in 2027 affect my severance?
- If you receive unemployment benefit in 2027 and the severance is paid in the same year, the benefit raises the tax rate on the severance and on your other income through the progression proviso (section 32b EStG). Your employer does not take this into account, so a back payment can arise. Enter the expected benefit in the calculator. If the benefit is suspended because of the severance (section 158 SGB III), none is paid during that time.
Keep calculating
As of (tax year 2027) · last verified:
Sources:
- § 34 EStG (außerordentliche Einkünfte, Fünftelregelung)
- § 24 EStG (Entschädigungen)
- § 32a EStG (Einkommensteuertarif)
- § 32b EStG (Progressionsvorbehalt)
- EStH 2025, H 34.2 Berechnungsbeispiel 3 (Fünftelregelung mit Progressionsvorbehalt)
- § 3 SolZG 1995 (Freigrenze)
- § 4 SolZG 1995 (Zuschlagsatz und Milderungszone)
- § 39b EStG (Lohnsteuer auf sonstige Bezüge)
- Wachstumschancengesetz vom 27.03.2024, BGBl. 2024 I Nr. 108 (Wegfall der Fünftelregelung im Lohnsteuerabzug)
- § 1a KSchG (Abfindungsanspruch bei betriebsbedingter Kündigung)
- § 10 KSchG (Höhe der Abfindung)
- § 158 SGB III (Ruhen bei Entlassungsentschädigung)
- § 159 SGB III (Ruhen bei Sperrzeit)
Scope of review: formulas and reference values were checked against the sources listed above, by the Nomado24 editorial team. What is verified is the calculation logic, not your personal situation. Not tax or legal advice.