Severance pay by country (2026)

Last updated July 18, 2026. Jump to: How severance works · The country table · Severance vs notice · What it means for employers · Statutory vs contractual · FAQ

How severance pay works

Severance is a payment made when employment ends, usually on the employer’s side of a dismissal rather than a resignation. Across our country guides, three things decide whether it is owed and how large it is:

• What kind of ending it is. The trigger matters. Many countries owe severance on a dismissal without cause or a redundancy, but pay little or nothing when the dismissal is for serious misconduct. In Brazil, for example, just-cause dismissal removes most severance; in Turkey it is owed only for reasons other than misconduct.
• How long the person worked. Statutory severance is almost always tenure-linked — a set amount of pay per year of service. Several countries also set a minimum service period before any severance is due, such as two years in the United Kingdom and Ireland.
• Whether a cap applies. Many formulas are capped. Spain caps unfair-dismissal compensation at 24 months’ pay; Peru caps its formula at 12 months; Croatia at six months. The cap can matter as much as the rate for a long-tenured employee.

So a single global figure does not exist. What an employee is owed depends on the country, the reason for the ending, and their length of service. The table below states each country’s severance term as our guide records it — not reduced to one score.

Severance pay by country

The table lists 35 countries whose guides state a severance or indemnity term on termination. Each entry is summarized from that country’s guide and checked July 2026. Where a formula exists, it is shown; where severance depends on the type of dismissal, that is noted. Open a country’s guide for the full eligibility rules, notice interplay, and exact calculation.

Source: our country guides, checked July 2026. Figures are the statutory position as each guide records it; the guide sets out eligibility, the notice interplay, and the exact calculation.

Some countries with a full guide do not state a severance figure in the same field — Italy, Poland, Sweden, Colombia, and Finland among them. That does not mean nothing is owed there; it means the severance detail is not summarized in our termination field. Open the country guide for the full termination rules in any of these.

How severance and notice interact

Severance and the notice period are two different obligations, and they often apply together. Notice is the warning time before employment ends — the employer either keeps the person working through it or pays it out in lieu. Severance is a separate sum owed on top, usually tied to tenure.

In many of the countries above, a dismissal without cause means both: notice (or pay in lieu) and severance. Jordan states this plainly — compensation of one month’s wages per year of service is owed in addition to the notice period. Argentina and Ghana settle severance alongside notice and outstanding balances too.

A handful of countries lean the other way, using notice as the main protection and leaving severance narrow. The United Kingdom has no statutory severance outside redundancy, but notice periods are always due. Because the two obligations combine differently in each place, the country guide is where the notice and severance rules sit side by side.

What severance means for employers

For a company hiring across borders, severance is a cost that lands at the end of an employment relationship, and it is easy to overlook when planning a hire. A long-tenured employee in a country with a generous per-year formula can be owed several months’ pay on exit. Building that into the plan from the start avoids a surprise later.

To fold potential exit costs into the wider cost of a hire, read our guide to the total employer cost of hiring abroad, and use the employment cost calculator to turn a salary into an all-in figure for a given country.

When employment ends, the severance calculation and the filing have to follow local law exactly — the right trigger, the right per-year rate, the right cap. Doing that in a country where you have no entity is where an employer of record comes in. An EOR is the legal employer, so it administers the termination — notice, severance, and final settlement — under local law on your behalf. Our guide to what an employer of record is explains the model in full.

Statutory minimum versus contractual severance

Everything in the table is the statutory position — the floor set by law. A contract or company policy can promise more: a higher per-year rate, a longer runway, or a guaranteed package even where the law mandates none. What an employer offers can go above the statutory minimum, but never below it.

Severance also sits inside a wider set of legal entitlements — leave, notice, and statutory benefits. For how those minimums compare across countries, see our guide to statutory employee benefits by country. Whatever severance a contract promises, the statutory floor for each country is the starting point.

Frequently asked questions

What is severance pay?

Severance pay is money an employer owes an employee when their job ends, set either by law or by contract. It is usually paid on a dismissal or redundancy rather than a resignation, and it is separate from the notice period. How much is owed, and whether it is owed at all, depends on the country, the reason for the ending, and the employee’s length of service.

Which countries require severance pay?

Many do, but not all. Our table lists 35 countries whose guides state a statutory severance or indemnity on termination, from Brazil and Mexico to Spain, Indonesia, and Turkey. A few countries, such as Germany and Norway, have no statutory severance when proper notice and a valid reason are met, though a payment is often negotiated. Always check the specific country.

How is severance pay calculated?

It is usually tied to length of service — a set amount of pay per year worked — and often capped. Spain pays 33 days’ salary per year for unfair dismissal, capped at 24 months; Turkey pays one month’s salary per year after a year of service; Brazil pays out the FGTS balance plus a 40% penalty. The rate, the trigger, and the cap all differ by country, so open the relevant guide.

What is the difference between severance and notice?

Notice is the warning time before employment ends — the employer either keeps the person working through it or pays it in lieu. Severance is a separate sum owed on top, usually tied to tenure. In many countries a no-cause dismissal means both: notice and severance. The two obligations combine differently in each place, which the country guide sets out.

Do contractors get severance pay?

No. Severance is an employment entitlement, so it applies to employees, not to genuine independent contractors. A contractor’s engagement ends on the terms of their contract, with no statutory severance. If you rely on contractors, our guide to contractor management covers keeping the relationship compliant and clearly non-employment.

Who pays severance when you use an employer of record?

An employer of record is the legal employer, so it administers the termination — calculating severance to local law, running the notice, and settling final dues. The cost is still yours as the client: the EOR bills the severance through, because the money is owed to your worker. What the EOR provides is that the exit is handled correctly under the rules of that country.