Does a retiring employee have a right to severance pay? - Retirement on a voluntary basis

Verified 01 janvier 2024 - Legal and Administrative Information Directorate (Prime Minister)

Your situation

  • Your employer automatically retires you
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If your employer decides to hire you to retire automatically, you are entitled to a retirement allowance.

Please note

You are also entitled to a notice of the same duration as the notice in the event of dismissal.

The amount of your retirement allowance may not be less than the following statutory amount, depending on your seniority in the company:

  • ¼ months of salary per year of seniority for the first 10 years
  • ∙ months of salary per year of seniority from 11e year

The salary used to calculate the allowance, called reference salary, is, depending on what is most advantageous to you:

  • This is the monthly average of your salaries for the last 12 months before the day the letter of retirement is sent
  • That's one-third of your salaries in the last three months. In this case, any premium or other element of annual or exceptional salary paid during these 3 months shall be recalculated over 3 months. For example, if you received an annual bonus of €550, it shall be taken into account up to €137.50 (550 / 12 x 3).

A collective agreement may provide for more favorable amounts.

Your seniority is calculated until the effective termination date of your employment contract, i.e until the end of the notice periodeven if it is not accomplished.

If your seniority includes an incomplete year, the allowance is calculated in proportion to the number of complete months.

Example :

For a seniority of 12 years and 9 months and a reference salary of €2,200, the minimum allowance shall be: [(2 200 x 1/4) x 10] + [(2 200 x 1/3) x 2 ] + [(2 200 x 1/3) x (9/12)] = €7,516.67.

If you worked full-time and part-time in the same company, the allowance is calculated in proportion to the length of time you worked full-time and part-time.

Example :

You worked 5 years in your company including 3 years full time, then 2 years part time.

Your reference salary is €1,500 part-time, either €3,000 full-time.

The amount of your allowance is calculated as follows: (3000 x 1/4 x 3) + (1500 x 1/4 x 2) = €3,000.

Social contributions

Depending on the amount, your retirement allowance is submitted contributions (from Social Security, to CSG: titleContent and CRDS: titleContent):

  • If it is less than €463,680, it shall be exempt from social security contributions on the part of its amount which is less than €92,736
  • If it is greater than €463,680, it shall be subject in full to social security contributions
  • The share of your compensation less than €92,736 is exempt from CSG and CRDS
  • The portion of your allowance that is greater than €92,736 is fully subject to CSG and CRDS (without allowance of 1.75%)

Income taxation

Your retirement allowance is partly exempt from income tax.

The portion of your tax-exempt allowance is based on what is most advantageous to you one of the following 3 amounts:

  • Minimum legal amount or amount provided for in the collective agreement or agreement
  • Or twice the amount of gross annual remuneration you received in the year before your retirement, up to €219,960
  • Or 50% of the amount of your compensation up to €219,960 for allowances received in 2020

In addition to your retirement allowance, you can receive the following amounts (if you meet the conditions to receive it):

Who can help me?

Find who can answer your questions in your region

  • For further information

    Telephone administrative information - Allo Public Service

    The informants who answer you belong to the ministry responsible for labor.

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    Attention: the service does not respond questions relating to unemployment compensation and representations to Pôle emploi, civil servants or public service contractors, the amount or payment of social, wage or employer contributions.

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