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How to calculate the specific conventional break allowance?

Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)

The employee CDI: titleContent that signs certified conventional failure shall receive a specific allowance at the end of the breach of his employment contract.

The amount of compensation may not be less than statutory redundancy.

The employee's seniority shall be taken into account in the amount of the allowance calculation.

However, the calculation of the specific allowance varies according to the employee's remuneration.

You can estimate the amount of compensation using the following simulator:

Calculate the amount of conventional severance pay

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Seniority less than 10 years

Amount of compensation

The statutory allowance is calculated from the gross salaries prior to termination.

The allowance may not be less than 1/4 months' salary per year of service.

Seniority shall be calculated until the date of actual termination of the employment contract, i.e. at the end of the notice.

In the case of an incomplete year, the allowance shall be calculated proportionally the number of full months.

Example :

for a reference salary €1,500, the minimum indemnity with 3 years and 6 months' seniority shall be: [(1 500 x 1/4) x 3] + [(1 500 x 1/4) x (6/12)] = €1,312.50.

Reference Salary Calculation

The salary taken into account is called reference salary. It shall be determined by taking into account, in accordance with the most advantageous formula:

  • or the monthly average of the last 12 months preceding the termination,
  • is the monthly average of the last 3 months. In this case, exceptional or annual premiums and rewards shall be taken into account in proportion of the time worked. If an annual premium has been collected, add 1/12e the amount of the premium to each of the last 3 months of reference.

When the employee has been on sick leave in the last few months, the reference salary to be taken into account is that of the last 12 or 3 months preceding the stoppage.

Please note

if the employee's seniority is less than 12 months, the allowance shall be calculated by averaging all gross salaries preceding the termination.

Calculation of seniority

Lseniority shall be calculated until the date of actual breach of the employment contract, i.e. at the end of the notice.

If the employee worked full time before moving to part time (or vice versa), the allowance is calculated proportionally the length of time he worked full and part time.

Example :

an employee worked 3 years full time, then 2 years half time. His average gross salary for the last 12 months at half-time is €1,000 either €2,000 full-time). The calculation of the allowance is as follows: (2000 x 1/4 x 3) + (1000 x 1/4 x 2) = €2,000.

Parental leave for part time education is considered to be a full-time working period.

Older than 10 years

Amount of compensation

The statutory allowance is calculated from the gross salaries prior to termination.

The allowance shall be at least equal to the following:

  • 1/4 months salary per year of service up to 10 years
  • 1/3 months salary per year of service after 10 years
Reference Salary Calculation

The salary taken into account is called reference salary. It shall be determined by taking into account, in accordance with the most advantageous formula:

  • or the monthly average of the last 12 months preceding the termination,
  • is the monthly average of the last 3 months. In this case, exceptional or annual premiums and rewards shall be taken into account in proportion of the time worked. If an annual premium has been collected, add 1/12e the amount of the premium to each of the last 3 months of reference.

When the employee has been on sick leave in the last few months, the reference salary to be taken into account is that of the last 12 or 3 months preceding the stoppage.

Calculation of seniority

The seniority shall be calculated until the date of actual breach of the employment contract, i.e. at the end of the notice.

In the case of an incomplete year, the allowance shall be calculated proportionally the number of full months.

Example :

for a reference salary €1,500, the minimum allowance with seniority of 12 years and 9 months is: [(1 500 x 1/4) x 10] + [(1 500 x 1/3) x 2] + [(1 500 x 1/3) x (9/12)] = €5,125.

If the employee worked full time before moving to part time (or vice versa), the allowance is calculated proportionally the length of time he worked full-time and part-time.

Example :

one employee worked 10 years full time, then 3 years half time. His average gross salary for the last 12 months at half-time is €1,000 either €2,000 full-time). The calculation of the allowance is as follows: (2000 x 1/4 x 10) + (1000 x 1/3 x 3)= €6,000.

Parental leave for part time education is considered to be a full-time working period.

FYI  

of treaty provisions, contractual or usage may provide for a different formula than the statutory allowance, which is more advantageous for the employee.

In this case, the employee receives the highest compensation.

An increased allowance (said legal supra) may also be negotiated in addition to the termination indemnity.

This allowance benefits from the same exemptions from social security contributions and income tax as the termination allowance (unless the employee is entitled to a retirement pension).

The allowance is then exempt from social security contributions, for the fraction less than €87,984 and based on the following 3 amounts:

  • Total legal redundancy pay
  • 2 times the amount of annual gross remuneration received in the previous year
  • 50% of the amount of compensation received

The allowance is exempt from income tax conditions for the employee.

The conventional severance pay shall be subject to CSG: titleContent only for the part of the amount that exceeds the amount of the legal or conventional allowance.

The social package shall apply to conventional severance benefits for the excluded part of the contribution basis, whether or not subject toCSG: titleContent.

The allowances are subject to the social package of 1to up to €87,984.

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