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What to do when an employee dies? A guide for Germany

Written by
Kliemt.HR Lawyers, the first port of call in employment law for top-class and future-proof advice.
How should an employer react when an employee dies? This article summarises what employers in Germany should do and what guidance employment law provides in this difficult situation.

Irrespective of any legal assessment, it is important to note that the death of an employee is always also a very tragic event that causes lasting shock to the surviving dependants, but also to the workforce. An employer can communicate condolences by sending a letter of condolence to the employee’s relatives, possibly jointly with the employee’s coworkers. It could also choose to commission a death notice for the employee, if this is appropriate.

Continued payment of salary

If an employee dies, his or her agreed pay is generally only payable up to the time of death, as the employment relationship ends automatically on death. However, it will often be the case that a collective bargaining agreement, a works agreement or the individual employment contract in question contains a provision stating that remuneration for the month of death is still payable in full (and possibly beyond). All payments in excess of the salary earned up to the date of death are non-contributory in social insurance. The wage tax deduction for remuneration paid after the date of death is no longer based on the wage tax deduction characteristics of the deceased, but on those of his or her heirs.

Death benefit

There is no legal obligation for the employer to pay death benefits to the surviving dependants of a deceased employee. However, this type of obligation is often set out in the individual employment contract, a collective bargaining agreement, a works agreement or is accepted company practice. In this case, it is often provided that the allowance is to continue to be paid to the spouse or dependent children for a limited period of time. The death benefit must be distinguished from the salary owed for the month of death for tax purposes. The death benefit is also not subject to social insurance contributions, as this is not salary in the traditional sense.

Holiday pay

In the event that the employee would still have been entitled to leave at the time of his or her death, holiday claims should be treated and settled in the same way as if the employment relationship had been terminated by notice. This means that the holiday pay entitlement is calculated on the basis of the holiday entitlement accrued up to the date of death (it ceases to accrue on death).

This holiday compensation claim is to be settled on this basis and is inheritable according to a recent decision of the Federal Labour Court (judgement dated 22 January 2019 – 9 AZR 45/16), which followed a decision of the European Court of Justice. As this is a claim of the heirs, any payments are also no longer subject to social security contributions and would be taxable for the deceased employee’s heirs.

Other points to note

The employer should remember to deregister the deceased employee from the social security system and, at an appropriate time, to request the return of any items lent to the employee from his or her heirs. The employer must also hand over to the heirs all objects that belonged to the deceased employee. It should be noted this should only take place after a certificate of inheritance has been presented. In principle, no payments should be made directly to relatives before a certificate of inheritance has been presented. An exception may apply here if a regulation explicitly favours the spouse or dependent children, irrespective of any assessment under inheritance law.


It is thankfully rare that an employment relationship ends because of an employee’s death, but when it does happen, the employer must take a few things into account. Any remuneration to be continued beyond the time of death and any death benefit must be treated distinctly from the pay the employee would have received up to his or her death under social security and wage tax law. Any vacation entitlement that is outstanding must be compensated and the resulting claim is inheritable and payable to the deceased employee’s heirs.