Is your temporary contract not being renewed? Then you are probably entitled to a transition payment. This payment is intended to make the transition to a new job easier. But how do you calculate what you are entitled to?
Transition Payment Formula
The transition payment amounts to:
1/3 of a monthly salary per year of service
For periods shorter than one year, this is calculated on a pro rata basis.
What Counts as Salary?
When calculating the transition payment, the relevant figure is the gross monthly salary, including:
holiday allowance (8%)
fixed bonuses
shift allowances or structural overtime payments
Calculation Examples
Example 1: An employee has worked for 1 year with a salary of EUR 2,400 per month.
Transition payment = 1/3 x EUR 2,400 = EUR 800.Example 2: An employee has worked for 2 years with a salary of EUR 3,000 per month.
Transition payment = 2 x 1/3 x EUR 3,000 = EUR 2,000.Example 3: A student had a contract of 8 months with a salary of EUR 1,800 per month.
Transition payment = (8/12) x 1/3 x EUR 1,800 = EUR 400 (rounded).
Transition Payment Checklist
Check whether your contract was terminated by the employer or not renewed.
Count the total number of months you were employed.
Take your gross monthly salary including allowances.
Calculate 1/3 of a monthly salary per year of service (pro rata for shorter periods).
Have the calculation checked by an employment law lawyer if you are in doubt.
Frequently Asked Questions
1. Do I also receive a transition payment with a short contract?
Yes, even with a contract of just a few months you are entitled to a payment.
2. When must my employer pay?
Within 1 month after the end of the contract.
3. What if my employer refuses?
Then you can, through a lawyer, initiate proceedings before the subdistrict court within 3 months after the end of employment.