The old severance scheme: your claim under the Salaried Employees Act
For jobs that began before 2003 the employer pays severance directly: a multiple of your last monthly pay, stepped by years of service.
The old severance scheme (Abfertigung alt) covers salaried employees in Austria whose job began before 1 January 2003 and has lasted without a break for at least 3 years. Under section 23 of the Salaried Employees Act (Angestelltengesetz, AngG) it equals twice the pay due for the last month, rising to three times after 5 years of service, four times after 10, six after 15, nine after 20 and twelve after 25. Monthly pay includes a share of the special payments, so with the usual 14 salaries a year it is one sixth higher than the monthly salary. If you last earned €3,500 gross and spent 15 years with the firm, you receive 6 months at €4,083.33, €24,500 gross and €23,030 after 6 % wage tax. You lose it if you resign, walk out without good cause or are dismissed for misconduct. Up to three months' pay is due when the job ends; the rest may be paid in monthly instalments from the fourth month. If the employee dies, the legal heirs he or she had to support receive half.
Old-scheme severance by years of service
Severance gross
€24,500
| Months’ pay | 6 |
| Monthly pay incl. special payments | €4,083 |
| net after 6% | €23,030 |
Checked by Radif Partners · Editorial policy · Calculation method
The scale by years of service
| From year | Months of pay | Gross on €3,500 | Wage tax 6.0 % | Net |
|---|---|---|---|---|
| 3 | 2 | €8,167 | €490 | €7,677 |
| 5 | 3 | €12,250 | €735 | €11,515 |
| 10 | 4 | €16,333 | €980 | €15,353 |
| 15 | 6 | €24,500 | €1,470 | €23,030 |
| 20 | 9 | €36,750 | €2,205 | €34,545 |
| 25 | 12 | €49,000 | €2,940 | €46,060 |
Severance jumps at each threshold. If your job ends after four years and eleven months you get 2 months' pay; a month later, 3. When negotiating a mutual termination shortly before an anniversary, the end date is worth checking carefully. Service counts from the start of employment to its legal end, notice period included.
What counts is the pay for the last month, not an average over your career. If you moved to part-time shortly before the end, severance is based on the lower monthly pay; only for parental part-time does section 23(8) require your earlier normal hours. A marginal job you held with the same employer during parental leave is ignored in the calculation (section 23(1a)).
When the claim arises and when it is lost
The Business Service Portal lists the ways a job can end without losing severance: notice from the employer, unjustified or blameless dismissal, justified early departure, mutual termination, expiry of a fixed term and death. There is no claim after you resign, after leaving early without good cause and after dismissal for misconduct. Resigning still keeps a claim in two cases: during parental part-time (half, capped at three months' pay, if the job lasted five years) and to take up a regular or corridor pension after at least ten years.
Two further cases are in the Act itself. If the business is wound up and the employer's finances have deteriorated so much that payment cannot fairly be expected, severance may be reduced or cancelled (section 23(2)). If the business is sold and you refuse to continue although the buyer offers the same terms and credits your service, the claim lapses too (section 23(3)).
Leaving after parental leave
If you decide not to return after having a child, you can declare early departure during parental leave (Karenz), for leave of at least three months no later than three months before it ends. You then receive half of the severance, at most three months' pay, provided the job lasted at least five years not counting the leave. It is based on the pay for the last month before the leave began.
Old-scheme severance by years of service
Severance gross
€24,500
| Months’ pay | 6 |
| Monthly pay incl. special payments | €4,083 |
| net after 6% | €23,030 |
Timing: what comes at once and what in instalments
Take €3,500 and 15 years: severance is €24,500. Three months' pay, €12,250, is due when the job ends. The remaining €12,250 may be paid in monthly instalments from the fourth month, each in advance. If you go on to claim unemployment benefit, its daily rate is based on your contribution records, not on the severance.
Wage tax: 6.0 % or the multiplier method
Statutory severance is taxed under section 67(3) of the Income Tax Act. There are two ways to calculate it and the cheaper one applies: either 6.0 % of the severance, or the scale wage tax on one regular month multiplied by the number of months' pay. On small salaries, where regular wage tax is below 6.0 % of monthly pay, the second method wins. At €2,000 gross and 6 months you pay €422.04 instead of €840.00. Above that it stays at 6.0 %. Severance is taxed on its own under subsection 3, not through the annual sixth of subsections 1 and 2 that governs your holiday and Christmas pay.
Switching to the new scheme
If your employer offered a move to the new severance scheme, there are two variants. Freezing keeps the number of months earned under the old rules up to the switch date, calculated later from your last monthly pay, and it is still lost if you resign. Transfer converts it into a lump sum paid into the provision fund, after which only the new rules apply. You can model both parts separately in the severance calculator.