Terminating an employee in Germany: the employer’s guide

German termination law cares about process, not just intent. A dismissal can fail on a technicality. A wrong signature. A skipped works council step. A verbal notice instead of a signed letter. Any of these can undo a dismissal, even when the underlying reason is solid. This guide walks the real process. It covers who is protected, how much notice is owed, what severance actually looks like, and where employers go wrong. Firing someone in France instead? Our France termination guide covers the same ground for a very different set of rules.

Last updated July 31, 2026. Jump to: How termination works · The KSchG threshold · Notice periods (BGB §622) · Severance: custom, not automatic · Works councils · Who gets special protection · Letter formalities · Employer costs and mistakes · What an EOR handles · FAQ

How termination works in Germany

German law recognizes two kinds of dismissal, and they work very differently.

• Ordinary dismissal (ordentliche Kündigung). The normal route. It runs on statutory notice. Once the KSchG applies, it also needs a justified reason. The reason must be personal, conduct-related, or operational.
• Extraordinary dismissal (außerordentliche Kündigung). Immediate termination, with no notice period. Reserved for serious cause, such as gross misconduct. The employer must act within two weeks of learning the facts, under BGB §626(2). Miss that window and the dismissal fails — even if the misconduct was real.

In practice, most exits are ordinary dismissals. Some end in a negotiated separation agreement instead. Extraordinary dismissal is a narrow tool. It covers serious breaches. It is not a shortcut around notice.

The KSchG protection threshold

The KSchG is Germany’s main dismissal-protection law. It does not apply to every employee automatically — two conditions have to be met first.

Once both are met, an ordinary dismissal needs a justified reason. It must be personal (health, capability), conduct-related (misconduct), or operational (redundancy, restructuring). Below the threshold, or in the first 6 months, an employer can give notice without stating a reason. Notice is still owed either way. The threshold changes whether a reason is required. It does not change whether notice is owed.

Statutory notice periods (BGB §622)

Notice length depends on who is giving it and how long the person has worked there.

During probation (up to 6 months, if agreed in the contract): either side can end it with 2 weeks’ notice.

Employee resigning: a flat 4 weeks, to the 15th or the end of a calendar month. This applies regardless of tenure, unless the contract sets a longer period.

Employer dismissing: notice scales with tenure. It runs to the end of a calendar month once tenure passes 2 years.

A contract can set a longer notice period than the statutory minimum. It cannot set a shorter one. And the employee’s notice can never be longer than the employer’s. For the same figures compared against other countries, see our notice periods by country table.

Severance pay: custom, not automatic

Germany has no general statutory right to severance. If an employer gives proper notice with a valid reason, nothing extra is owed. That surprises employers from countries where severance follows a fixed formula.

Two things put a real number on the table anyway:

• The §1a KSchG offer. For an operational (redundancy) dismissal, the employer can offer severance in the termination letter itself: 0.5 gross monthly salaries per year of service. In exchange, the employee agrees not to file a wrongful-dismissal claim within 3 weeks. A period over 6 months rounds up to a full year.
• Negotiated settlements. Around 4 in 5 unfair-dismissal claims in Germany settle rather than go to judgment. Judges commonly start from the same 0.5-month-per-year figure. They adjust it for age, tenure, and how strong the case looks. Settlements often land between 0.25 and 1 month per year of service. A weak employer case can push it higher.

So "0.5 month per year" is the number to plan around. It shows up as a formal §1a offer, or as the anchor a settlement conversation starts from. It is common practice, not a statute that applies to every exit. For how Germany compares with other countries on this, see our severance pay by country table.

Works councils and the §102 consultation

Where a Betriebsrat (works council) exists, it must be heard before every dismissal. That includes ordinary, extraordinary, and even probation dismissals. This step only applies if a works council exists at the business. Most small employers and startups have none, so it does not apply to them.

The employer must give the works council the reasons for the dismissal. This has to be in writing or another documented form — a verbal heads-up is not enough. The council then has 1 week to object to an ordinary dismissal, or 3 days for an extraordinary one. Skip this step, or skip it properly, and the dismissal is void under §102 BetrVG. That holds no matter how solid the underlying reason was.

Who gets special protection

A few categories sit outside the normal KSchG process. They need extra steps before a dismissal can proceed at all.

Missing one of these categories is one of the fastest ways a dismissal gets struck down in Germany. Check them before you draft the letter, not after.

Termination letter formalities

German law is strict on form. Under §623 BGB, a termination is only valid in written form. That means a physical letter with a handwritten, "wet ink" signature, from someone authorized to terminate.

Email, fax, SMS, WhatsApp, and scanned signatures do not count. A dismissal sent that way is void, no matter how clear the intent. The letter also has to actually reach the employee. Sending it is not enough. The date it arrives is what starts the clock on any deadline to respond. Getting this one step wrong can lose a termination that was otherwise justified — for a purely procedural reason.

Employer costs and common mistakes

Budget for more than the payroll cost of notice. A German termination can carry:

• Notice-period pay. The employee is usually paid through notice, whether or not they keep working.
• Negotiated severance, if a settlement is the practical way to close out the case — see the 0.5-month-per-year reference point above.
• Legal fees, since German employers cannot recover their own legal costs even if they win at the labor court.
• Time and management attention. Unfair-dismissal claims move faster than in many countries, but a hearing can still take months.

The most common mistakes we see are avoidable:

• Terminating by email instead of a signed letter.
• Skipping the works council, where one exists.
• Missing a protected-category check.
• Treating Germany like an at-will market and assuming no reason is needed.
• Letting the two-week window for an extraordinary dismissal lapse while still investigating.

What an EOR handles

Germany does not recognize a standard employer-of-record model the way many countries do. A third party employing staff on another company’s behalf needs an AÜG licence (Arbeitnehmerüberlassungsgesetz). Remote& holds it. That licence is what lets us act as the legal employer for a German hire. One honest concession: if you already have retained German employment counsel and an established local entity, running this process yourself is perfectly workable.

As the legal employer, an AÜG-licensed EOR runs the termination itself. That means:

• Checking whether the KSchG applies.
• Calculating the correct notice.
• Consulting a works council, where one exists.
• Drafting a compliant, signed letter.
• Handling any negotiated settlement.

The cost of notice or severance is still the client’s, since it is owed to the employee. What the EOR removes is the risk of a procedural mistake voiding the whole thing. Our Germany guide covers the full hiring and employment picture. Our Global Workforce Management page explains the EOR, contractor, and Contractor of Record models side by side.

Frequently asked questions

How do you terminate an employee in Germany?

Give written notice under BGB §622. Use a physical letter with a handwritten signature. If the company has more than 10 employees and the person has worked there over 6 months, you also need a justified reason under the KSchG — personal, conduct-related, or operational. Consult the works council first, if one exists. Check the employee is not in a specially protected category before you draft the letter.

What is the KSchG and who does it protect?

The Kündigungsschutzgesetz is Germany’s main dismissal-protection law. It applies once a company has more than 10 employees and the person being dismissed has worked there for more than 6 months. Once both conditions are met, an ordinary dismissal needs a justified reason, not just notice. Below that threshold, an employer can dismiss with notice and no stated reason.

How much notice do I have to give an employee in Germany?

It depends on tenure and who is giving notice. An employee resigning owes a flat 4 weeks, to the 15th or end of a calendar month. An employer dismissing owes more as tenure grows — from 4 weeks under 2 years, up to 7 months past 20 years of service, under BGB §622. A contract can make these periods longer, but not shorter.

Is severance pay mandatory in Germany?

No. There is no general statutory right to severance if an employer gives proper notice with a valid reason. In practice, severance shows up two ways. One is a formal §1a KSchG offer: 0.5 month’s salary per year of service, for a redundancy dismissal. The other is a negotiated settlement, which is how most unfair-dismissal claims end. The 0.5-month-per-year figure is the common reference point in both cases. It is not a fixed entitlement everyone gets.

Do I need a works council’s approval to dismiss someone in Germany?

You need to consult it, not necessarily get its approval. Where a works council exists, the employer must inform it of the dismissal and the reasons before issuing notice. It gets 1 week to respond for an ordinary dismissal, or 3 days for an extraordinary one. Skipping this step makes the dismissal void, even with a valid reason. Where no works council exists, this step does not apply.

Can I fire an employee by email in Germany?

No. Under BGB §623, a valid dismissal needs written form. That means a physical letter with a handwritten signature, from someone authorized to terminate. Email, fax, SMS, and messaging apps do not count. A dismissal sent that way has no legal effect, no matter how clearly it states the intent to terminate.

Who is protected from dismissal in Germany?

German law also protects specific groups by name. Pregnant employees cannot be dismissed during pregnancy or up to 4 months after birth. Severely disabled employees need the Integrationsamt’s consent first. Works council members have near-total protection from ordinary dismissal. Employees on approved parental leave are protected too. Each category needs its own check before a dismissal can proceed.

What does an employer of record handle for a German termination?

An AÜG-licensed EOR is the legal employer, so it runs the process. It checks whether the KSchG applies. It calculates the correct notice. It consults a works council if one exists. It issues a compliant written letter, and manages any settlement. The notice or severance cost is still the client’s, since it is owed to the employee. The EOR’s job is making sure the process itself does not fail on a technicality.