Compare severance tax
Compare estimated German income tax for 2026 with and without the one-fifth rule (Fünftelregelung). This concerns your annual income-tax assessment, not the severance amount paid by your employer.
Severance and the one-fifth rule in 2026: how to use this tool
1. Find your annual taxable income
Enter your estimated annual taxable income excluding severance and your taxable one-off compensation separately. Gross salary and taxable income are not the same. Losses, replacement benefits and special cases may require individual calculation.
2. Check eligibility carefully
Genuine compensation under §24 EStG and concentrated income (Zusammenballung) are essential. Payment within a single calendar year may not be sufficient. Do not tick a condition unless you have checked it.
3. Understand the annual comparison
The result models annual income tax, solidarity surcharge and church tax. Since 2025, employers do not apply §34 preferential taxation during payroll withholding. Whether relief arises in the annual tax assessment depends on the actual circumstances.
A worked example — not a personal forecast
At €50,000 ordinary taxable income and €30,000 assumed qualifying severance, the 2026 basic tariff gives regular income tax of €22,464 versus €21,393 under the §34 model. The income-tax difference is €1,071. Surcharges and personal circumstances can change the total comparison. The conditions for relief are not established by this example.
Frequently asked questions about severance tax
Does the one-fifth rule apply automatically to every severance payment?
No. Genuine compensation and a relevant concentration of income are among the conditions. The three checkboxes only record assumptions; they do not replace a legal review.
Why does the one-fifth rule not appear on my payslip?
Since 2025, employers no longer apply §34 when calculating wage-tax withholding. Possible relief is assessed through the annual income-tax return; a specific refund is not guaranteed.
Can I enter my gross annual salary as taxable income (zvE)?
No. Taxable income includes other tax adjustments and differs from gross salary. Without a reliable annual value, this model could mislead.
Is this result my net severance payout?
No. This tool compares estimated annual taxes . It does not calculate employer payout, social contributions, unemployment benefits or benefit suspension periods.
What matters with children, church tax or unemployment benefits?
Child allowances affect the notional solidarity/church-tax base under §51a. Special church-tax cases and progression for some replacement benefits are not fully modelled. Seek individual advice when these apply.
Official sources: §34 EStG · §51a EStG · Federal Finance Ministry — severance compensation · Federal Employment Agency — severance and unemployment benefits.
More tools: Gross-to-Net Calculator for regular employment wages and the Payslip Explainer for individual payslip lines.
Indicative calculation. Not tax advice. Not an official tax assessment or binding payout estimate.