On a €2,000/month salary with 7 years of service, redundancy severance comes to €4,000 gross (1 month from your employer, 1 from Töötukassa), leaving a net of approximately €3,040 after income tax and funded pension. Adjust your salary, tenure, and pension rate below.
Employer pays
1 month
any tenure, TLS §90
5-10 years
+1 month
from Töötukassa
10+ years
+2 months
from Töötukassa
Tax
22% income tax
no social tax
5-10 years: Töötukassa adds 1 extra month on top of the employer's 1 month.
Net koondamishüvitis received
€3,040
Gross severance
€4,000
Total months' pay
2
Effective rate
24.0%
| Employer portion (1 month, always) | €2,000 |
| Töötukassa top-up (1 month) | €2,000 |
| Gross severance | €4,000 |
| Income tax (tulumaks, 22%) | -€880 |
| Funded pension (II pillar) | -€80 |
| Net severance received | €3,040 |
Models koondamine (redundancy) specifically under Töölepingu seadus §90. The employer's 1-month portion applies at any tenure; Töötukassa adds a further 1 month at 5-10 years or 2 months at 10+ years. Koondamishüvitis is exempt from social tax and unemployment insurance, but subject to ordinary 22% income tax and funded pension (II pillar) withholding at your chosen rate, computed here using the same incremental method as our Estonia Salary Calculator. Doesn't model termination for cause (no statutory severance), notice-period shortfall compensation, or the discretionary up-to-3-month payment for resigning over an employer's serious breach. This is an estimate, not legal or payroll advice.
Koondamishüvitis, redundancy severance under Article 90 of the Töölepingu seadus (Employment Contracts Act), comes from two different payers stacked together. Your employer always pays 1 month's average salary, calculated from your last 6 months of pay, regardless of how long you've worked there. If you've completed at least 5 years of service, Töötukassa, the state Unemployment Insurance Fund, adds a further payment on top: 1 extra month for 5 to 10 years of service, or 2 extra months for more than 10 years.
This only applies to redundancy specifically. Termination for cause or proven misconduct carries no statutory severance at all, and an ordinary resignation with standard notice doesn't trigger severance either. The one exception is resigning because of the employer's own serious breach of contract, which can lead to a discretionary payment of up to 3 months' salary, decided case-by-case rather than by a fixed formula, so it isn't part of this calculator.
On tax: koondamishüvitis is treated as ordinary taxable income, subject to the same flat 22% income tax as regular salary, and funded pension (II pillar) contributions are withheld from it too if you participate at a non-zero rate. It's exempt from social tax and unemployment insurance premiums on both the employee and employer side, since it's a compensatory payment rather than ordinary wages for work performed.
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Your employer pays 1 month's average salary regardless of tenure. If you have 5-10 years of service, Töötukassa (the Unemployment Insurance Fund) adds a further 1 month; at 10+ years, it adds 2 months. On a €2,000/month salary with 7 years of service, that's €4,000 gross (2 months' pay).
Two different payers. Your employer pays the base 1 month directly. Any additional tenure-based top-up (1 or 2 extra months) comes from Töötukassa, the state Unemployment Insurance Fund, not your employer, though it's paid as part of the same overall severance process.
No. Statutory severance under Töölepingu seadus §90 applies to redundancy (koondamine) specifically. Termination for cause or misconduct after a proper process carries no statutory severance entitlement.
An ordinary resignation with the standard 30-day notice carries no severance. The exception is resigning because of the employer's serious breach of the employment contract, which can trigger a discretionary compensation of up to 3 months' salary, set case-by-case rather than by a fixed formula, so it isn't modeled by this calculator.
Yes, it's subject to the same 22% flat income tax as ordinary salary, and funded pension (II pillar) is withheld from it at your chosen contribution rate if you participate. It's exempt from social tax and unemployment insurance premiums on both sides, the same treatment used elsewhere in this codebase for compensation-type payments.
Gross severance (2 months' pay: 1 from your employer, 1 from Töötukassa) comes to €4,000. After income tax and funded pension, that's a net of approximately €3,040. Enter your own salary, tenure, and pension rate above for your exact figures.
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