October 6, 2026

Transition Payment in the Netherlands: Your Rights

Transition Payment in the Netherlands: Your Rights in 2026

Table of Contents / İçindekiler

A transition payment in the Netherlands is statutory compensation generally owed when an employer dismisses an employee or decides not to renew a fixed-term contract, subject to legal exceptions. It normally equals one-third of the relevant gross monthly salary for each year of service, with a proportional amount for shorter periods and a statutory cap. If employment ends through a settlement agreement, the compensation must be negotiated and recorded rather than assumed to arise automatically under the statutory rules.

Author: Av. Derya Yurteri Çetin, whose work at DYC Legal Consultancy includes Dutch employment and immigration law, explains the payment, the calculation and the decisions employees should check before accepting an exit offer.

Key rules

Accrual starts on the first day of employment; qualifying short contracts count.

The formula uses the relevant gross salary and actual service period.

The 2026 cap is €102,000 gross, or one gross annual salary if higher.

A VSO requires an express agreement on severance.

A statutory payment claim must reach the court within three months after employment ends.

See the official transition-payment guidance, UWV maximum and court filing rules.

What does a transition payment cover?

The Dutch term transitievergoeding describes a statutory payment connected to the end of employment. It supports the move to another job, but it is not a reimbursement that requires you to produce training invoices. You decide how to use it, as explained in the government guidance on entitlement and use.

When checking an offer, put the payment on its own line. Salary through the termination date, outstanding holiday allowance, unused leave and other contractual entitlements need their own assessment. An offer described as a “total package” can make it difficult to see what compensation is actually being offered.

Paying compensation also does not, by itself, establish that a dismissal is lawful. The legal route and reason remain separate questions. The official employment guidance distinguishes the payment obligation from the requirement for a valid dismissal reason.

Who is entitled, and when are there exceptions?

Employer dismissal and an unrenewed temporary contract

Employees dismissed through the appropriate employer-led route generally qualify. A fixed-term contract can also create entitlement when the employer chooses not to continue it; you do not need a permanent position. See the government explanation of non-renewal.

There is no general two-year waiting period. Qualifying service begins on day one, including a probationary period. Permanent, temporary and on-call contracts fall within the framework, according to Ondernemersplein’s employment guidance. The amount for a short employment period will naturally be smaller.

Resignation, renewal offers and other exclusions

Ordinary voluntary resignation usually does not qualify. An exception may apply where the employer’s seriously culpable conduct causes the employee to leave. This is a demanding legal test: an unhappy working relationship is not enough to establish it. Before resigning, preserve the relevant correspondence and obtain advice on the evidence.

Other exclusions concern seriously culpable employee conduct, retirement-related termination, employer insolvency and certain renewal offers. A qualifying CAO provision may replace the statutory payment for dismissal on economic grounds. A CAO is a collective labour agreement; a social plan or individual contract should not simply be assumed to displace the law. The official list of entitlement exceptions is the starting point for checking your circumstances.

How is the transition payment calculated?

Start by confirming the employment dates and the salary used for the calculation. Do not rely only on the headline salary printed in the settlement proposal.

The core formula is:

Relevant gross monthly salary ÷ 3 × complete years of service.

For the remaining period, the government calculation guidance gives this formula:

(Gross salary over the remaining period ÷ relevant gross monthly salary) × (one-third of that monthly salary ÷ 12).

Keep full years and the remaining period separate so that the same service is not counted twice. An online calculator can provide an estimate, but its output depends on the dates and salary components entered.

Which salary components matter?

Holiday allowance and an applicable fixed year-end payment need attention. Relevant overtime, shift allowances, bonuses and profit-related payments may also enter the calculation. Their averaging rules differ, so neither the latest payslip nor the most recent bonus alone necessarily supplies the right figure. The official WAB brochure explains the components and reference periods.

Collect your contract, salary amendments, payslips and bonus records. If you worked under consecutive contracts or changed employer within a group, ask whether earlier service counts. Do not reset the start date automatically because a new document was signed.

Hypothetical worked example

Assume an employee has a €3,000 basic gross monthly salary, receives 8% holiday allowance, has no other relevant components and completes five years plus four full salary months. Assume those remaining months produce €12,960 in relevant gross salary and no exclusion or cap affects the result.

Step	Calculation	Gross amount
Relevant monthly salary	€3,000 + €240	€3,240
Five complete years	€3,240 ÷ 3 × 5	€5,400
Remaining period	(€12,960 ÷ €3,240) × (€1,080 ÷ 12)	€360
Total	€5,400 + €360	€5,760

This illustrates the formula rather than predicting an individual entitlement. Different dates, variable remuneration or qualifying service can change the result. Ask for the employer’s calculation in writing so you can identify any difference at its source.

all you need to know about transition payment

What is the maximum in 2026?

For 2026, the statutory ceiling is €102,000 gross. If the relevant gross annual salary is higher, the ceiling is one gross annual salary. UWV confirms both limits.

This is a ceiling applied to the calculated statutory payment, not an amount everyone receives. It also does not automatically cap separately negotiated VSO compensation. Check the official figure again if employment will end in a later year, because the statutory maximum is adjusted annually.

Transition payment and a settlement agreement: the important distinction

A vaststellingsovereenkomst, usually shortened to VSO, is an agreement to end employment by mutual consent. In this route, statutory transition-payment entitlement is not automatic; the parties agree on severance. The statutory calculation remains a useful comparison when assessing an offer. UWV explains the difference between mutual consent and employer notice with employee consent.

Those routes should not be confused. In opzegging met instemming, the employer gives notice and the employee consents in writing; statutory entitlement will generally remain relevant. The legal mechanism matters more than the heading used by HR.

What should you negotiate or check?

Ask for a breakdown showing compensation, salary through the end date, leave, holiday allowance, bonuses and any proposed deductions. Review the notice period, payment date, release of claims, restrictions on future work and any contribution towards legal advice. A larger headline amount can be less useful if employment ends earlier or valuable claims are waived.

The statutory figure is a benchmark, not a promise that every employer will pay a particular multiple. Negotiation depends on the documents, dismissal position and applicable arrangements. The official VSO guidance also confirms that an employee does not have to accept the proposal.

Following conclusion of a VSO, employees generally have 14 days to withdraw in writing; this becomes 21 days if the agreement omits the required reflection-period information. Keep evidence of delivery. Read DYC’s guide to settlement agreements in the Netherlands for the wider document review.

What if you are on sick leave or work fewer hours?

Illness does not automatically remove entitlement. Reduced pay during sickness should not automatically become the salary base for this calculation. The official guidance on illness and calculation uses the relevant contractual wage, including where actual sickness pay was lower.

Whether employment may lawfully end is a separate issue. A VSO during sickness can affect continued salary and benefit rights; receive individual advice before agreeing. DYC’s article on settlement agreements during sick leave addresses that wider risk.

A partial transition payment may arise where a reduction in working hours is substantial and expected to be permanent. UWV’s partial-dismissal guidance identifies a reduction of at least 20%, permanence and documentation in a contract. A temporary schedule change should not be treated as automatically qualifying.

Can an employer deduct training or outplacement costs?

Certain qualifying costs can be deducted, but an employer cannot simply subtract every course or HR expense. Ask what was spent, why, when, and on which legal basis. Ordinary costs to improve performance in the existing role and costs tied to reintegration obligations are excluded under the government deduction guidance.

Prior written agreement is generally relevant, although collective arrangements and qualifying dual education have specific exceptions. The WAB brochure’s deduction conditions explain those distinctions. Ask for an itemised justification rather than accepting a single unexplained “training deduction”.

Gross versus net: tax and unemployment benefits

The calculated payment is gross. Your employer normally withholds payroll tax, and the final income-tax result depends on your personal situation. There is no reliable universal percentage for converting an offer into a net amount. The payment can also affect income-related allowances, as explained by the Belastingdienst guidance on severance taxation.

Tax and unemployment benefits are different systems. UWV states that a transition payment need not be reported as income for WW and the other listed benefits. That does not establish WW eligibility: the termination route, notice period and other conditions still need checking. A package combining wages and compensation requires attention to each component.

When must it be paid, and what if it is missing?

Government guidance says the statutory payment should arrive within one month after dismissal. A qualifying instalment arrangement can spread payment over a maximum of six months; statutory interest applies from one month after employment ends to the unpaid amount. See the official payment timetable.

If the statutory amount is unpaid or disputed, the application must reach the kantonrechter within three months after employment ends, according to the Dutch courts’ employee procedure guidance. This is the subdistrict court. Contacting HR is not the same as submitting a court application; do not assume reminders or negotiations preserve the deadline.

A contractual claim for unpaid VSO compensation may require a different route. Identify the legal basis before relying on a deadline. If you also dispute the dismissal itself, act promptly because other termination claims can have shorter time limits.

What should international employees check?

A severance payment does not itself extend an employment-based residence permit. For highly skilled migrants, current IND guidance provides up to three months to find new work, with up to six months for qualifying cases from 22 May 2026, including holders who have had the permit for at least two years. The search period starts when the contract ends and cannot exceed permit validity.

The official guidance also contains an exception for victims of labour exploitation. Earlier unemployment and other permit categories require their own assessment. Check your permit history, expiry date and current IND conditions before choosing a termination date; do not infer your immigration position from the number of salary months in an offer.

Frequently asked questions

Do I need two years of service?

No. Qualifying accrual starts with the first employment day. Short service affects the amount, not a general waiting period; official transition-payment guidance confirms this.

Can I negotiate more than the statutory calculation?

You can propose additional VSO compensation. There is no guaranteed multiplier; assess the full offer and your legal position using the official settlement framework.

Does finding another job immediately cancel the payment?

Finding a different job does not by itself appear among the statutory exclusions. Check any VSO clause that changes compensation if you start elsewhere before the agreed end date.

Is a poor-performance dismissal enough to refuse payment?

Poor performance and seriously culpable conduct are different concepts. An employer’s description needs legal assessment against the entitlement rules; it does not settle the issue on its own.

Does the payment include all my remaining holiday entitlement?

Ask for separate figures. The VSO guidance on final settlement identifies outstanding payments such as holiday pay, so an unexplained package total is insufficient for a useful comparison.

What should I do if the employer’s figure looks wrong?

Request the dates, salary base and deductions, compare them with your records, and obtain advice. If a statutory claim is needed, protect the three-month court deadline while discussing the calculation.

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Discuss your payment or exit offer with DYC Legal Consultancy

Prepare your employment contract and amendments, payslips, bonus information, proposed VSO or termination letter, social plan and the employer’s calculation. Include any stated response deadline and, where relevant, your residence-permit details.

Contact DYC Legal Consultancy about your transition payment or settlement offer to discuss the calculation, documents, available options and next steps before committing to an agreement.