HR-Glossar
Kündigungsfrist (notice period)
How German notice periods lengthen with service, why they apply only to the employer and what can and cannot be varied by contract.
1. What is Kündigungsfrist (notice period)?
The Kündigungsfrist is the period between a dismissal or resignation taking effect and the end of the employment relationship. For employment contracts it is governed by Section 622 BGB – the German Civil Code, which exists in an official English translation.
Two features regularly surprise companies operating from abroad.
First, the statutory period lengthens with length of service. It starts at four weeks to the fifteenth or the end of a calendar month, and increases in steps as service accumulates – reaching several months for long-serving employees. Notice is therefore not a fixed cost but one that grows with tenure.
Second, these extended periods apply only to dismissal by the employer. An employee may resign on the basic period throughout, unless a longer period has been agreed – and an agreed period for the employee may never exceed the one applying to the employer.
The result is asymmetric by design: the longer someone has worked for a company, the harder it becomes for the company to release them quickly, while their own freedom to leave stays unchanged.
2. Origin and development
The graduated notice period reflects a simple assumption: the longer someone has been with an employer, the more their working life is bound to it, and the longer they will need to find something else. The period is therefore not a formality but a protective mechanism, and the asymmetry between employer and employee follows from that purpose.
For international groups, this has a consequence that appears late in restructuring planning. Where a workforce has long average tenure, notice periods alone can account for a substantial share of separation costs – before any severance is discussed. In jurisdictions that work with fixed notice or pay in lieu, this is easy to miss.
A second point follows from the German construction: there is no general right to pay in lieu of notice. The employment relationship continues during the notice period, with all its obligations. An employer that wants the employee to stop working must release them from duties – and whether that release is revocable or irrevocable has consequences for holiday entitlement and for social security treatment.
3. Core principles and how it works
The basic period applies to both sides
Four weeks to the fifteenth or to the end of a calendar month. Note that this is a period and a permitted end date – a dismissal cannot simply take effect four weeks from any given day.
Extended periods bind only the employer
The graduated periods in Section 622(2) BGB apply to dismissal by the employer. The employee may resign on the basic period unless a longer one is agreed.
An agreed employee period may not exceed the employer's
Section 622(6) BGB prohibits a longer period for the employee than for the employer. Clauses that do this are ineffective. During an agreed probationary period of up to six months, Section 622(3) BGB allows two weeks' notice on both sides.
Collective agreements may deviate
Section 622(4) BGB permits deviation by collective agreement, including shorter periods. Where a company is bound by one, the statutory ladder may not apply.
No general pay in lieu of notice
The relationship continues through the notice period. An employer wishing to end attendance must release the employee from duties, and the form of that release matters. Notice runs from receipt and requires written form on paper under Section 623 BGB – electronic form is expressly excluded.
4. Who is Kündigungsfrist (notice period) relevant for?
- Foreign parent companies planning separations – notice periods are a cost factor that grows with tenure and is easily overlooked. - HR functions at group level – calculating separation costs requires the German ladder, not a fixed multiple. - Payroll teams – release from duties, holiday and social security treatment interact during the notice period. - Employees – for them the asymmetry works in their favour and is often unknown. - Companies bound by collective agreements – there the statutory ladder may be replaced.
5. How it differs from related terms
- Notice period and dismissal protection – the period determines when employment ends; dismissal protection determines whether it may be ended at all. They are independent. - Ordinary and extraordinary dismissal – extraordinary dismissal under Section 626 BGB ends the relationship without notice but requires serious cause and a two-week window. - Notice period and termination agreement – a mutual agreement may end employment at any date, including immediately. This is one reason such agreements are common in Germany. - Release from duties and pay in lieu – German law knows release from duties, not a general right to buy out the notice period. - Notice period and fixed-term contracts – a fixed-term contract ends by itself; it can be terminated during its term only if expressly agreed or provided by collective agreement.
6. Variants and adaptations
Situations that deviate from the standard ladder:
- Probationary period – two weeks' notice during an agreed probation of up to six months. - Small establishments – Section 622(5) BGB allows a shorter agreed period in establishments below a statutory size, within limits. - Fixed-term contracts – ordinary termination only where expressly agreed. - Collectively agreed periods – may be longer or shorter than the statutory ladder. - Special protection groups – for pregnant employees, severely disabled employees and employees on parental leave, termination generally requires prior official approval, which affects timing far more than the notice period itself.
7. Advantages and challenges
Advantages
- Predictable, statutory periods that require no negotiation
- Length of service is rewarded with a longer transition
- The asymmetry leaves employees mobile while protecting them against rapid release
- Clear rules reduce disputes about the end date
Challenges
- Notice costs grow with tenure and are underestimated in restructuring budgets
- No general right to pay in lieu – the relationship continues, and written form on paper is mandatory
- The permitted end dates make the effective period longer than it first appears, and are easy to miss
- Clauses imposing longer periods on employees than on the employer are ineffective
- Special protection groups require official approval, which can delay matters considerably
8. Best practices for implementation
Calculate notice cost per employee, not as an average
The ladder depends on individual service. A workforce with long average tenure produces separation costs that a flat assumption will understate – often substantially. Check any applicable collective agreement first; it may replace the statutory ladder entirely.
Mind the permitted end dates
Four weeks *to the fifteenth or the end of the month* is not the same as four weeks. Missing the date pushes the end back by half a month or more.
Decide on release from duties deliberately
Irrevocable release with express set-off against holiday discharges the entitlement; revocable release does not, and the holiday must then be paid out.
Serve notice on paper, with provable receipt
Section 623 BGB excludes electronic form. A dismissal sent by email is void – and this is a common error in groups accustomed to digital signature workflows.
9. Tips for employers and employees
For employers
- **Notice cost grows with tenure** – calculate per person, not as an average
- **Paper only** – Section 623 BGB excludes electronic form; an emailed dismissal is void
- **Mind the end dates** – the fifteenth or the end of the month, not any date
- **No pay in lieu** – release from duties is the German instrument, and its form matters
For employees
- **Your period stays short** – extended periods bind the employer, not you
- **A longer period for you than for the employer is ineffective** – Section 622(6) BGB
- **The relationship continues** – with pay, and with your obligations
- **Check any release from duties** – whether it is revocable affects your holiday entitlement
10. Conclusion
German notice periods have two features that companies operating from abroad regularly miss. They lengthen with length of service, reaching several months for long-serving employees – so notice is a cost that grows with tenure rather than a fixed figure. And the extended periods bind only the employer: an employee may resign on the basic period throughout, and a contract may not impose a longer period on them than on the employer.
The second surprise is structural. German law knows no general right to pay in lieu of notice. The employment relationship continues, with pay and with obligations on both sides. An employer that wants attendance to stop must release the employee from duties – and whether that release is revocable or irrevocable determines whether holiday entitlement is discharged or must be paid out at the end.
One formal point is worth stating plainly because it recurs in international groups: Section 623 BGB requires written form on paper and expressly excludes electronic form. A dismissal issued through a digital signature platform is void, and the employment relationship simply continues.
A note on sources: the German Civil Code is available in an official English translation, cited below.
Sources
- German Civil Code (BGB) – official English translation (opens in a new tab)
- Section 622 BGB – Notice periods for employment relationships (German original) (opens in a new tab)
- Section 623 BGB – Written form of termination (German original) (opens in a new tab)
- Section 626 BGB – Termination without notice for serious cause (German original) (opens in a new tab)
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