Termination costs in global employment are rarely just a final salary cheque. Notice periods, statutory redundancy pay, accrued leave, and (in Germany) a severance formula that has no direct UK equivalent all feed into the total. This page works through two jurisdiction pairs the Severance & Notice Estimator calculates automatically, using 2026 statutory rates.
What Does Exit Cost in the UK for a £50,000 Salary, 5 Years’ Service, Age 35?
UK exit costs have two distinct components that are calculated differently and should not be conflated: statutory notice pay and statutory redundancy pay.
Statutory notice period
After 2 or more complete years of service, the employer must give 1 week’s notice per completed year, up to a maximum of 12 weeks. At 5 years: 5 weeks’ statutory notice. Contractual notice periods are often longer (particularly for senior hires); statutory is the floor.
Notice pay is calculated on the employee’s actual weekly gross pay, not the capped rate that applies to redundancy pay:
£50,000 ÷ 52 weeks = £961.54/week
5 weeks × £961.54 = £4,808 notice pay
Statutory redundancy pay
Redundancy pay uses an age-tiered multiplier against capped weekly pay (£754/week for 2026, projected). Because this employee is aged 35 (in the 22-to-40 bracket), the multiplier is 1.0 week per year of service:
5 years × 1.0 × £754/week cap = £3,770 statutory redundancy
Note: the £754 cap means high-earning employees receive less redundancy pay per year of service than their actual weekly rate. An employee on £30,000/year (£576.92/week) would have statutory redundancy fully uncapped and receive £2,885.
Total minimum exit cost, UK £50,000, 5 years, age 35
| Component | Calculation | Amount |
|---|---|---|
| Notice pay (5 weeks) | 5 × £961.54 | £4,808 |
| Statutory redundancy (5 years, 1.0×) | 5 × 1.0 × £754 | £3,770 |
| Accrued unused holiday (example: 10 days) | 10 × £192.31 (daily rate) | £1,923 |
| Total minimum exit cost | £10,501 |
Unused holiday varies by individual. The statutory minimum is 28 days per year, and at exit any accrued but untaken leave must be paid out at the contractual daily rate. This is often the largest variable in UK exit costs for long-tenured employees with generous leave policies.
What Does Exit Cost in Germany for a €60,000 Salary, 7 Years’ Service?
Germany is frequently the most expensive EOR jurisdiction to exit. Two factors drive this: long statutory notice periods (tenure-scaled, not capped at 12 weeks like the UK) and a severance formula under §1a KSchG that applies when employers terminate for operational reasons.
Statutory notice period
German notice periods for employers are set by §622 BGB and scale steeply with tenure. At 7 years (84 months, within the 5–8 year bracket), the employer must give 8 weeks’ notice to the 15th or end of the month:
€60,000 ÷ 52 weeks = €1,153.85/week
8 weeks × €1,153.85 = €9,231 notice pay
Unlike the UK, Germany does not have a pay-in-lieu-of-notice (PILON) provision by default. The employee typically serves their notice period actively, meaning you continue to pay their full salary for 8 weeks even if they have no productive work to do.
Severance under §1a KSchG
There is no automatic statutory severance in Germany. However, when an employer terminates for operational reasons (redundancy), they can offer severance under §1a to achieve legal finality. The employee waives their right to challenge the dismissal in the Labour Court (Arbeitsgericht) in exchange for the payment.
The formula: 0.5 months’ gross pay per year of service (periods over 6 months rounded up to a full year).
Monthly gross: €60,000 ÷ 12 = €5,000
7 years × 0.5 × €5,000 = €17,500 severance offer
In practice, German Labour Court settlements routinely settle at 0.5–1.5 months per year of service depending on case strength. The §1a route is the employer-controlled floor; employees who believe their dismissal was unfair often negotiate upwards.
Total minimum exit cost, Germany €60,000, 7 years
| Component | Calculation | Amount |
|---|---|---|
| Notice pay (8 weeks) | 8 × €1,153.85 | €9,231 |
| Severance (§1a KSchG) | 7 × 0.5 × €5,000 | €17,500 |
| Accrued unused holiday (example: 10 days) | 10 × €230.77 (daily rate) | €2,308 |
| Total minimum exit cost | €29,039 |
UK vs Germany: Why Does the Gap Matter for EOR Buyers?
| Metric | UK (£50k, 5yr, age 35) | Germany (€60k, 7yr) |
|---|---|---|
| Notice period | 5 weeks | 8 weeks |
| Notice pay | £4,808 | €9,231 |
| Statutory redundancy / severance | £3,770 | €17,500 |
| Total minimum exit cost (excl. holiday) | £8,578 | €26,731 |
| Unfair dismissal protection kicks in | After 2 years | After 6 months (KSchG) |
Germany’s exit costs are material enough that many EOR providers and legal teams recommend budgeting 3–6 months of employment cost as an exit reserve for any German hire, particularly in senior roles with long expected tenure. Run your specific salary, tenure, and age profile through the live estimator to see the full breakdown for your scenario.
UK rates: Employment Rights (Increase of Limits) Order 2026 (projected). German rates: §622 BGB (notice), §1a KSchG (severance). Sources verified April 2026.