Settlement Receipt

Meaning of Settlement Receipt

If an employment relationship is terminated, a compensation receipt can be requested from the employee . The employer can also ask to have this signed back. In this way, the employee confirms that he has received all working papers and that there are no more salary claims against his employer. But what about the legal validity of a settlement receipt? What does such a document say? And when does it make sense to sign a settlement receipt?

What is a settlement receipt?

Once you sign a compensation receipt, you could lose your entitlements against your employer . For this reason, it is often advisable not to sign a settlement receipt. Provided that they are part of the content of the receipt and that they are not indispensable claims. The compensation receipt is a recognized labor law instrument , whereby employers protect themselves against claims from the employee. In order for this contractual content to be really effective, a few special features must be taken into account when creating it. For example, there is a waiver of a dismissal protection suit not effective if the employee does not receive anything in return from the employer.

You can now find out what you need to know about the compensation receipt and various compensation clauses and how to use the labor law instrument correctly.

What are compensation clauses?

The compensation clauses are an integral part of the compensation receipt. The employer can confirm that the employee is no longer entitled to any claims after termination of the employment relationship. However, these can only relate to certain points and do not have to relate to the complete relationship. For example, the employee can only waive the payment of his vacation pay, but can still claim the outstanding wage payments.

It is also possible for the employer to guarantee financial compensation so that the employee does not make any further claims. As I said, this can, but by no means has to happen. If the employer wants to protect himself against an action for protection against dismissal without any consideration, this could be problematic. However, these and a few other clauses are ineffective.

Invalid compensation clauses

Whether a compensation clause is ineffective or valid has been clearly defined by the case law of the Federal Labor Court (BAG).

The surprising clause

In Section 305c (1) BGB it says: “ Provisions in general terms and conditions that are so unusual in the circumstances, in particular in terms of the external appearance of the contract, that the contractual partner of the user does not need to expect them, are not part of the contract. “ This even happens very often if, for example, a debt waiver is simply placed at the end of a body text in the settlement receipt and does not have a separate heading. If the employee assumes completely different content, a suddenly appearing claim can be declared invalid.

The unreasonable disadvantage

According to Section 307, Paragraph 1, Clause 1 of the German Civil Code (BGB) , a compensation receipt can also result in an unreasonable disadvantage for the employee. This is the case if the content relates exclusively to the interests of the employer. And if the employee does not receive anything in return for his waiver.


In case of doubt, it is advisable to always conduct an employment relationship with a specialist lawyer for labor law. Especially in complicated cases, both parties would then be on the safe side and no one has to expect surprises.

This is how you formulate a settlement receipt

The acknowledgment of receipt

It is important that the employee has read the compensation receipt and accepted its content. For example, you could say something like this:

“I hereby confirm receipt of the following working papers:

  • Income tax card for 2020
  • Certificate of employment for the employment agency
  • certificate of employment
  • Holiday certificate
  • Payroll for the month of 09/2020

The working papers have been duly issued or completed. I also confirm that I have read the confirmation of receipt carefully. For this it was translated into my national language.

Signature of the employee:”

Compensation clause

“I have the following claims from the employment relationship:

  • Remaining end-of-work allowance including continued payment of wages ____ euros
  • End of vacation allowance ____ euros
  • capital accumulation benefits
  • Claims from company pension schemes
  • Severance payment ____ euros
  • Other ____Euro

The employment relationship ends on September 30, 2019.

I hereby confirm that the payroll including vacation allowance has been made. The outstanding amounts were transferred to my account _________________ or I received them in cash on ___________.

I received __________ days of vacation for the 2019 calendar year.

My remaining vacation of _____ days was paid out to me in the amount of _____ euros.

I have heard the reference to the possibility of a dismissal protection suit, but will not bring a dismissal protection suit. (The complaint AZ .: _____________ at the labor court will be withdrawn with immediate effect.)

I have been informed of possible claims from the company pension scheme. However, I confirm that I will not make any claims on it.

I acknowledge the termination of the employment relationship on September 30, 2020. I waive my right to pursue the continuation of the employment relationship in court.

Employees and employers of sevDesk GmbH agree that there are no claims from the employment relationship. The parties are also agreed that there are no further claims based on any facts. By signing this compensation clause, I acknowledge that the agreement is valid for my continued payment of wages, the right to a certificate, the claims from company pension schemes. I agree to this expressly and of my own free will.

This settlement receipt was translated into my national language on __________ and explained accordingly. I have read it carefully and it has been pointed out that I am not obliged to sign, but that I am doing it of my own free will.

Signature: _______________”

Generally renounce general waiver declarations such as: “I hereby declare that I am no longer entitled to any claims due to the termination of my employment relationship.” It is important that you justify the employee’s obligation if he is to waive the dismissal protection suit, for example.

There is also the option of using a sample settlement receipt , which you can download for free.

Waiver of all claims?

Even if certain claims are included in the equalization receipt, there are some that cannot be affected by law. For example, according to Section 12 EntgFG, employees have a statutory right to continued remuneration . And the statutory minimum wage is also regulated in Section 3 MiLoG and remains unaffected by a compensation receipt. Employees can still not waive collective bargaining rights or rights from the works agreement . In this case, approval from the works council would also be required in order to make a waiver valid.

In addition, the waiver of protection against dismissal may also be ineffective. For example, if it is an unreasonable disadvantage. In addition, pension entitlements, entitlements or entitlements to the issuing of certificates are generally not effective through a signature on the compensation receipt.

What workers can do

Employees who are no longer entitled should still ask for a cooling off period if they are presented with a compensation receipt. During this time, employees can check whether entitlements still exist. There is also the possibility of obtaining legal advice . It is really advisable to read the settlement receipt and its contents carefully. Employees have the right to delete parts of it.

A later contestation of the settlement receipt would be conceivable and possible if the content was an error or the employer acted unlawfully or even fraudulently deceived.

The most important facts about the settlement receipt

  • Employers can confirm in the compensation receipt that all important documents have been handed over to the employee. This includes the job reference, the tax documents, the wage slip or the like.
  • Compensation clauses are part of a compensation receipt.
  • Compensation clauses usually contain a waiver of subsequent additional claims. It is customary to waive an action for protection against dismissal, but this is only valid under certain conditions.
  • If there is an unreasonable disadvantage or if certain clauses came as a surprise, they can be declared ineffective.
  • An unreasonable disadvantage exists if the employee does not receive anything in return for his waiver.
  • Employees should check the settlement receipt before signing it. Especially if this only represents the interests of the employer.
  • Employers should also secure themselves through a settlement agreement.

No legal entitlement to a compensation receipt

It is important to mention at this point that, as an employer, you have no legal right to sign a compensation receipt. Employees can therefore refuse to sign. What he is obliged to do, however, is to sign the receipt of his working papers . This is justified in § 368 BGB. However, as soon as it is a matter of receiving a “proper certificate”, this does not apply. The reason: The proper issuing of a certificate cannot be guaranteed or assessed due to the lack of a content check. However, you can show your employee a compensation receipt if you consider this to be useful.


With an accounting program, you can easily create the corresponding settlement receipts and save them as a template or template. This makes sense if your company consists of several employees. Employment contracts, processing contracts or the like can also be managed easily.
So you can easily take care of pay slips or tax matters.


The compensation receipt is a recognized labor law instrument that employers use to protect themselves against any claims. However, there is no obligation for the employee to sign. It is also important to correctly formulate various compensation clauses in order to prevent ineffectiveness . Workers should take time to review the content.

Settlement Receipt

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