MKB Juristen drafts custom legal documents
It is best not to cobble together or copy important contracts, terms and conditions, and other legal documents yourself. We help entrepreneurs on a budget with customized legal solutions, clear costs upfront, and practical explanations.
- Custom contracts, terms and conditions, and legal documents
- Budget-friendly and clear about the costs upfront
- Request a free consultation or a no-obligation quote
If an employee dies, the employment contract ends immediately and automatically — you do not need to give notice or dissolve it. You pay the salary and holiday allowance up to the day of death to the heirs, plus a statutory death benefit equal to one month's salary (including holiday allowance) to the surviving relatives. Company property is returned, and the employee's personal belongings go to the surviving relatives.
The death of an employee deeply affects colleagues and surviving relatives. First and foremost, express your condolences — but you also need to arrange a number of business matters.
The employment contract ends automatically
Unlike the tenant of commercial premises (whose heirs can continue the business), an employment contract immediately and automatically upon death — after all, you chose the employee for their personal qualities. You do not need to do anything: no notice of termination, no dissolution, no dismissal.
Wages and death benefit
However, you still have obligations that pass to the heirs. You pay the salary up to the day of death, and the holiday allowance is retained; both are part of the inheritance.
In addition, the surviving relatives are entitled to a death benefit equal to one month's salary, plus holiday allowance. This benefit falls outside the inheritance and does not need to be deposited into the estate account. Who is entitled to it depends on who the employee leaves behind: in principle, the spouse or partner; in their absence, the minor children; and otherwise, the person with whom the employee lived in a family setting and whom he supported. Others are not entitled.
You may grant a higher death benefit, agreed upon in advance (for example, in the employment contract as a secondary employment condition) or via a collective labour agreement. The benefit is exempt from wage tax to the extent that it does not exceed three months' salary.
Return items
If the employee still possessed company property (a bicycle, computer, or company car), the next of kin may not keep it: whoever is in possession of it must return it. Conversely, you give the employee's personal belongings (such as a photo frame or briefcase) to the next of kin — which you may not keep either. Therefore, contact the next of kin after the death to make practical arrangements.
Frequently Asked Questions
Do I have to terminate the employment contract if an employee dies?
No. The agreement ends immediately and automatically; there is no question of dismissal. You do not need to give notice or dissolve the contract.
How much is the death benefit?
Statutory one month's salary, including holiday allowance, to the surviving relatives. This falls outside the inheritance. You may grant a higher benefit; up to three months' salary is tax-free.
Who receives the death benefit?
In principle the spouse or partner; otherwise the minor children; and otherwise the person with whom the employee lived in a family relationship and whom he supported.
Questions regarding the death of an employee?
The employment lawyers at MKB Juristen advise you on wages, death benefits, and settlement. View our expertise in employment law or schedule an intake interview .
