Severance pay types 
Severance pay types
Definition
The different severance pay types depend on the reason for the contract expiration; that is, the contract termination type within the SAP R/3 system as well as the different types of contracts.
The severance pay types also differ according to the different work regimes mentioned above.
Some severance pay types are subject to income tax, while others are not:
Severance pay type |
Income Tax |
Vacation not taken |
Subject (*) |
Severance pay due to seniority |
Exempt |
Severance pay due to "force majeure" |
Exempt |
Severance pay due to incapacity or death of the worker |
Exempt |
Severance pay due to expiration of fixed period contract |
Exempt |
Severance pay in substitution of notice |
Subject (*) |
Severance pay due to integration of the dismissal month |
Subject (*) |
Severance pay for termination due to marriage |
Subject |
Severance pay for termination due to pregnancy |
Subject |
Severance pay as compensation for length of service |
Subject |
(*) In these cases the proportional Annual Extra Payment (SAC) is also subject to income tax.
For further details, see also:
Settings General description of the calculation process