Severance pay calculator
The severance pay calculator determines your statutory entitlement when your employment is terminated for organisational reasons under § 67 of the Czech Labour Code. Enter your average monthly wage and how long you worked for the employer, and the calculator sets the applicable multiple (one, two or three times) and the resulting amount. It is useful for employees dismissed because the company is closing, relocating or making the position redundant.
How severance pay is calculated
Severance pay under § 67 of the Labour Code is owed to an employee whose employment ends by employer notice for so-called organisational reasons (§ 52 (a) to (c) — the employer or a part of it is being dissolved, is relocating, or the employee becomes redundant) or by agreement for the same reasons. The amount is a statutory minimum derived from the average monthly earnings and from how long the employment with that employer lasted:
- 1× average earnings if employment lasted less than 1 year,
- 2× if it lasted at least 1 year and less than 2 years,
- 3× if it lasted at least 2 years.
Severance = average monthly wage × multiple (1× / 2× / 3× by length of employment)
- Determine the average monthly earnings (usually from the previous calendar quarter).
- Establish how long the employment lasted.
- Multiply the earnings by the applicable multiple.
The calculator rounds to whole crowns and, for simplicity, treats the wage you enter as the average earnings.
Step-by-step worked example
An employee with average monthly earnings of CZK 40,000 who worked for the employer for 2 or more years and received notice for redundancy:
| Step | Item | Calculation | Amount |
|---|---|---|---|
| 1 | Average monthly wage | entered | CZK 40,000 |
| 2 | Length of employment | 2+ years → 3× | multiple 3× |
| 3 | Severance pay | 40,000 × 3 | CZK 120,000 |
The employee is entitled to severance of CZK 120,000, i.e. three times the average monthly earnings. This is the statutory minimum — a collective agreement or an arrangement with the employer may be more generous.
What affects the result
- Length of employment with the given employer — this determines the multiple (1×, 2× or 3×).
- Average monthly earnings — calculated under § 351 et seq. of the Labour Code, usually from gross pay for the previous calendar quarter, not just base salary.
- Reason for termination — entitlement arises only for organisational reasons under § 52 (a) to (c), or on health grounds under (d), where at least 12× is due.
- Collective agreement or internal rules — may increase severance above the statutory minimum.
When severance pay applies and what to watch out for
The calculator provides a quick estimate of the statutory minimum severance for organisational reasons. It does not cover the special case of at least twelve times the earnings when employment ends due to a work injury, occupational disease or the risk of one (§ 67(2)), nor any increase beyond the law. It does not account for income tax — severance is taxed but is not subject to social or health insurance. The result is indicative; the exact amount depends on the correctly determined average earnings. In an actual dispute, rely on the wording of the Labour Code and, where appropriate, professional advice.
⚠️ Indicative calculation, rates current for 2026. Not a substitute for an accountant or tax advisor — verify important decisions with the Czech Financial Administration.
FAQ
What is the severance for a CZK 40,000 wage and 2 or more years worked?
Three times the average earnings is due: 40,000 × 3 = CZK 120,000. This is the statutory minimum under § 67 of the Labour Code.
When am I even entitled to severance pay?
It arises on notice or agreement for organisational reasons — the employer or a part of it is being dissolved, is relocating, or you become redundant (§ 52 (a) to (c)). No severance is due if you are dismissed for breach of duty or resign yourself.
What are the severance multiples?
1× for employment shorter than 1 year, 2× for 1 to 2 years, and 3× for 2 or more years of employment with the employer.
Is severance calculated from gross or net pay?
From the average monthly earnings, set from gross pay under § 351 et seq. of the Labour Code, usually from the previous calendar quarter. The calculator uses the entered wage in a simplified way.
Is tax and insurance paid on severance?
Severance is subject to income tax from employment but is not included in the assessment base for social or health insurance. The employer therefore withholds only the tax advance.
When is severance twelve times the earnings?
At least twelve times the average earnings is due when employment ends because of a work injury, occupational disease or the risk of one (§ 67(2)). The calculator does not compute this case.
Can I get more than the calculator shows?
Yes. The multiples shown are the statutory minimum. A collective agreement, internal rules or an arrangement with the employer may increase the severance.
Does severance affect unemployment benefit?
Yes, the start of the labour office unemployment benefit is postponed by the number of months covered by severance, but the entitlement to the benefit itself is not lost.
Sources & legislation
📅 Last updated: 11 July 2026