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Severance pay calculatorTable of contents
Retirement severance is a one‑off benefit paid when employment ends in connection with retirement. The key is the link between termination and retirement — without it, the benefit is usually not due. Below is a practical explanation of when the retirement severance applies and how the amount is determined.
In general, the benefit is due when the employment ends because the employee is retiring. This typically means the employee meets retirement conditions and the contract ends at that time. Merely reaching retirement age is not enough; the formal transition to retirement and termination of employment are decisive.
The amount is often defined by the Labour Code, but it can also be set by a collective agreement, internal rules or the contract. In practice it is most often one month’s pay, although some sectors offer more favorable terms.
If your employer has special rules, check them carefully — they can provide a higher amount or additional conditions.
After a disciplinary dismissal, retirement severance is usually not due, because the termination is based on employee fault and is not linked to retirement. Exceptions may follow from a collective agreement or contract.
Being on sick leave does not automatically exclude retirement severance. What matters is whether the employment ends in connection with retirement. If so, the benefit may still apply even during L4.
Most common reasons:
An employee ends employment by mutual agreement and retires. Retirement severance is paid in the amount defined by the employer’s rules — most often one month’s pay.
Use the severance calculator, select “retirement” and enter the number of months from your employer rules. You’ll get an indicative result to compare with company policy.
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