31/08/2026
A severance payment that looks like a clean lump sum on paper can be taxed very differently depending on where the employee is based. For example, in Denmark, certain severance payments benefit from partial tax exemptions depending on structure and tenure. Meanwhile, in Austria, the "Abfertigung Neu" system routes severance-style contributions through an ongoing employer-funded scheme rather than a single payout. Lastly, in Estonia, severance is generally treated as regular taxable income, with fewer special exemptions than neighboring systems.
Assuming one tax treatment across all three produces a wrong number in at least one of them. Rivermate applies the correct severance tax treatment market by market, across 180+ countries.
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