{"id":2446,"date":"2025-01-23T15:51:00","date_gmt":"2025-01-23T12:51:00","guid":{"rendered":"https:\/\/dyclegal.com\/?p=2446"},"modified":"2025-05-12T15:52:21","modified_gmt":"2025-05-12T12:52:21","slug":"transition-payment-in-the-netherlands-2025-employee-rights-severance-pay-explained","status":"publish","type":"post","link":"https:\/\/dyclegal.com\/en\/blogs\/transition-payment-in-the-netherlands-2025-employee-rights-severance-pay-explained\/","title":{"rendered":"Transition Payment in the Netherlands (2025): Employee Rights &amp; Severance Pay Explained"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_Transition_Payment_in_the_Netherlands\"><\/span>What is a Transition Payment in the Netherlands?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>When an employment contract ends at the employer\u2019s initiative in the Netherlands, the employer is generally required by law to pay a <strong>transition payment<\/strong> (in Dutch: <em>transitievergoeding<\/em>) to the employee. This transition payment is essentially a form of statutory severance pay in the Netherlands, designed to support the employee after the end of employment. It was introduced to <strong>Dutch labour law termination<\/strong> rules in 2015 to ensure all employees receive fair compensation when their job is terminated. The <strong>purpose<\/strong> of the transition payment is to help employees transition to new work \u2013 for example, it can be used for retraining or education \u2013 though employees are not obliged to spend it on training. In plain terms, it is part of <strong>employee rights in the Netherlands<\/strong> that provides a financial cushion when an employee\u2019s contract is terminated or not renewed by their employer.<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">\u0130\u00e7indekiler<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #352f4d;color:#352f4d\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #352f4d;color:#352f4d\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/dyclegal.com\/en\/blogs\/transition-payment-in-the-netherlands-2025-employee-rights-severance-pay-explained\/#What_is_a_Transition_Payment_in_the_Netherlands\" >What is a Transition Payment in the Netherlands?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/dyclegal.com\/en\/blogs\/transition-payment-in-the-netherlands-2025-employee-rights-severance-pay-explained\/#Who_is_Entitled_to_a_Transition_Payment\" >Who is Entitled to a Transition Payment?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/dyclegal.com\/en\/blogs\/transition-payment-in-the-netherlands-2025-employee-rights-severance-pay-explained\/#When_is_a_Transition_Payment_Not_Required_Exceptions\" >When is a Transition Payment Not Required? (Exceptions)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/dyclegal.com\/en\/blogs\/transition-payment-in-the-netherlands-2025-employee-rights-severance-pay-explained\/#How_is_the_Transition_Payment_Calculated\" >How is the Transition Payment Calculated?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/dyclegal.com\/en\/blogs\/transition-payment-in-the-netherlands-2025-employee-rights-severance-pay-explained\/#Legal_Basis_in_the_Dutch_Civil_Code_and_Recent_Changes\" >Legal Basis in the Dutch Civil Code and Recent Changes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/dyclegal.com\/en\/blogs\/transition-payment-in-the-netherlands-2025-employee-rights-severance-pay-explained\/#Additional_Severance_Compensation_in_Case_of_Employer_Misconduct\" >Additional Severance Compensation in Case of Employer Misconduct<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/dyclegal.com\/en\/blogs\/transition-payment-in-the-netherlands-2025-employee-rights-severance-pay-explained\/#Receiving_Your_Transition_Payment_Timeline_and_Procedure\" >Receiving Your Transition Payment: Timeline and Procedure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/dyclegal.com\/en\/blogs\/transition-payment-in-the-netherlands-2025-employee-rights-severance-pay-explained\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/dyclegal.com\/en\/blogs\/transition-payment-in-the-netherlands-2025-employee-rights-severance-pay-explained\/#Source\" >Source<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<p><strong>Why does this payment exist?<\/strong> The transition payment exists to make dismissals fairer and to help employees move on after losing a job. It encourages employers to either invest in their employees\u2019 development or compensate them upon dismissal. For employees, it means that if you are <strong>facing the end of employment in the Netherlands<\/strong> through no fault of your own, you have a right to a monetary compensation that can help tide you over or fund career-related expenses. This right is enshrined in the Dutch Civil Code and forms a key part of <strong>employee rights<\/strong> regarding termination.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_is_Entitled_to_a_Transition_Payment\"><\/span>Who is Entitled to a Transition Payment?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Under <strong>Dutch labour law<\/strong>, not every ending of a contract triggers a transition payment \u2013 it applies primarily when the <strong>employer<\/strong> is the one ending the employment. According to Article 7:673 of the Dutch Civil Code, an employee is entitled to a transition payment if the employment is terminated at the employer\u2019s initiative. In practice, you are entitled to a transition payment in the following common situations:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Dismissal by Employer:<\/strong> If your employer dismisses you \u2013 whether by giving notice after obtaining UWV permission (e.g. for economic reasons or long-term illness) or via a court decision to dissolve the contract at the employer\u2019s request \u2013 you are entitled to the transition payment. In the Netherlands an employer must have a valid reason to terminate a contract; if they proceed with a lawful dismissal, they must pay this compensation.<\/li>\n\n\n\n<li><strong>Non-Renewal of a Fixed-Term Contract:<\/strong> If you are on a temporary (fixed-term) contract and the employer decides <strong>not to renew<\/strong> it at expiry, you are entitled to the transition payment upon that contract\u2019s end. Even though the contract is ending \u201cnaturally,\u201d the law treats a decision not to continue as a termination on the employer\u2019s initiative, triggering severance pay.<\/li>\n\n\n\n<li><strong>Employee Resignation Due to Employer\u2019s Misconduct:<\/strong> If <strong>you resign because of serious misconduct by your employer<\/strong>, you are still entitled to the transition payment. This covers situations like an employee quitting due to the employer\u2019s discrimination, harassment, or other seriously culpable behavior by the employer. In such cases, even though the employee formally \u201cquits,\u201d the law sees the employer\u2019s actions as the true cause of termination, and thus the employee should receive the transition compensation.<\/li>\n<\/ul>\n\n\n\n<p>Importantly, <strong>eligibility is not dependent on length of service<\/strong>. Since 2020, employees accrue the right to a transition payment from their very <strong>first day of employment<\/strong>, including during a probationary period. This means <strong>there is no minimum employment duration<\/strong> required anymore \u2013 even if you are dismissed in your first few months (or days) on the job, you can claim a pro-rated transition payment for that short period. This rule applies to all types of employment contracts: permanent (open-ended) contracts, fixed-term contracts, full-time or part-time roles, and even on-call or zero-hour contracts. In summary, <em>any employee in the Netherlands whose contract is ended by the employer (outside of the exceptions below) is entitled to a transition payment, from day one of employment onward<\/em>.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1000\" height=\"667\" src=\"https:\/\/dyclegal.com\/wp-content\/uploads\/2025\/05\/how-to-calculate-transition-payment.jpg\" alt=\"transition payment calculation\" class=\"wp-image-2451\" srcset=\"https:\/\/dyclegal.com\/wp-content\/uploads\/2025\/05\/how-to-calculate-transition-payment.jpg 1000w, https:\/\/dyclegal.com\/wp-content\/uploads\/2025\/05\/how-to-calculate-transition-payment-300x200.jpg 300w, https:\/\/dyclegal.com\/wp-content\/uploads\/2025\/05\/how-to-calculate-transition-payment-768x512.jpg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_is_a_Transition_Payment_Not_Required_Exceptions\"><\/span>When is a Transition Payment <strong>Not<\/strong> Required? (Exceptions)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are specific exceptions where an employer <strong>does not have to pay<\/strong> a transition payment. Dutch law outlines several scenarios in which the employee <strong>has no right to this compensation<\/strong> despite a termination. These exceptions include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Voluntary Resignation (no employer fault):<\/strong> If you <strong>resign on your own accord<\/strong> (quit your job) without serious cause attributable to the employer, you are <strong>not entitled<\/strong> to a transition payment. The law only mandates the payment when the termination initiative comes from the employer. (The only exception is the earlier mentioned case where you resigned due to employer misconduct \u2013 in all other voluntary quits, no payment is due.)<\/li>\n\n\n\n<li><strong>Dismissal for Serious Misconduct by Employee:<\/strong> If you are dismissed <strong>for cause due to your own serious culpable behavior or gross misconduct<\/strong>, the employer is <em>not<\/em> required to pay a transition payment. For example, if you are fired for fraud, theft, violence, or other grave misconduct, the law considers that you forfeit the right to severance.<\/li>\n\n\n\n<li><strong>Young Workers with Small Jobs:<\/strong> If you are under 18 years old and worked only a small number of hours (on average 12 hours or less per week) for the employer, then no transition payment is due upon termination. (This exception exists because minor part-time jobs held by minors are treated differently under the law.)<\/li>\n\n\n\n<li><strong>Retirement Age:<\/strong> If your employment ends because you have reached the state pension age (AOW age) or other official retirement age, you are not entitled to a transition payment. Essentially, when a contract terminates due to the employee reaching retirement, the severance requirement does not apply.<\/li>\n\n\n\n<li><strong>Employer\u2019s Bankruptcy or Insolvency:<\/strong> If your employer goes <strong>bankrupt<\/strong> or is under court-approved debt restructuring or suspension of payments, the transition payment <strong>will not be paid<\/strong>. In cases of insolvency, employees may claim unpaid wages via the UWV (government benefits agency), but severance payments like the transitievergoeding are not honored from a bankrupt estate.<\/li>\n\n\n\n<li><strong>Collective Agreement Severance Provisions:<\/strong> If a <strong>collective labour agreement (CAO)<\/strong> or an individual employment contract includes a <strong>severance arrangement<\/strong> that replaces the transition payment (for instance, a redundancy package in case of economic layoffs), that agreed arrangement may take precedence. In such cases, you might not get the statutory transition payment <em>in addition<\/em> to the arrangement \u2013 the CAO-provided severance is considered to fulfill the requirement (often this is relevant in economic redundancies where social plans apply).<\/li>\n\n\n\n<li><strong>Continuous Offer of New Employment:<\/strong> If your employer offers you a <strong>new contract before the current one ends<\/strong>, such that your employment will continue without a significant break, then a transition payment is not due at that time. For example, if you are on a temporary contract and before it expires the employer offers to extend or renew your contract (or offer a permanent contract) effective immediately after the current term, the ongoing employment means no termination gap \u2013 thus no transition compensation. This holds true <strong>even if you decide not to accept the new contract offer<\/strong>; because the employer was willing to continue the employment, the law deems that the end of your job was not solely the employer\u2019s choice. <em>(In short, an employer can avoid the transition payment by offering to renew your contract under the same terms before it ends \u2013 if you decline that offer, you won\u2019t get the severance.)<\/em><\/li>\n\n\n\n<li><strong>Mutual Agreement to Terminate:<\/strong> If <strong>you and the employer mutually agree<\/strong> to end the employment (often documented in a settlement agreement), the employer is <strong>not legally obliged<\/strong> to pay a transition payment. This is because a mutual termination is not considered an unilateral employer dismissal. However, in practice, employers usually <strong>do offer a severance payment in a settlement<\/strong> \u2013 often at least equal to the transition payment \u2013 to incentivize the employee to agree. So, while the law doesn\u2019t force a payment in mutual resignations, employees should negotiate for compensation in any settlement agreement.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_is_the_Transition_Payment_Calculated\"><\/span>How is the Transition Payment Calculated?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The <strong>amount of the transition payment<\/strong> you receive depends on your <strong>length of service<\/strong> and your <strong>monthly salary<\/strong> at the time of dismissal. The calculation is relatively straightforward under the current law. In essence, for each year of service with your employer, you build up entitlement to a portion of your monthly pay. The <strong>statutory formula<\/strong> is as follows:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>For each full year of employment<\/strong>, you are entitled to <strong>one-third (1\/3) of one month\u2019s gross salary<\/strong>.<\/li>\n\n\n\n<li><strong>For any partial year of employment<\/strong>, you are entitled to a <strong>pro-rata (proportional) part<\/strong> of that one-third month\u2019s salary. In other words, even if you worked less than a full year in the final year, you will get a fraction of the 1\/3 month pay corresponding to the number of days or months worked in that final partial year.<\/li>\n<\/ol>\n\n\n\n<p>This formula applies equally to all employees <strong>regardless of age or length of service<\/strong> (since 2020), making the calculation uniform. To illustrate, if your gross monthly salary is \u20ac3,000 and you worked <strong>3 years<\/strong>, your transition payment would be 3 \u00d7 (1\/3 of \u20ac3,000) = \u20ac3,000 (which equals one full month\u2019s salary). If you worked <strong>3 years and 6 months<\/strong>, the amount would be 3 \u00d7 \u20ac1,000 + 0.5 \u00d7 \u20ac1,000 = \u20ac3,500 (since half a year gives you half of \u20ac1,000) \u2013 about 1.17 times your monthly pay in total. Even a very short employment yields a small payment; for example, if you were dismissed after just one month, you\u2019d still get roughly 1\/3 of one month\u2019s salary for that month of service (approximately 0.33 of your monthly wage).<\/p>\n\n\n\n<p><strong>What counts as \u201cmonthly salary\u201d?<\/strong> Generally, the law defines the monthly salary for transition payment purposes to include your <strong>gross base salary<\/strong> plus any fixed allowances. This means the calculation takes into account not only your base wage but also recurring payments like <strong>holiday allowance (8%) and fixed year-end bonuses<\/strong> or other fixed salary components, prorated on a monthly basis. Certain variable pay (like bonuses or commission) may be averaged and included as well, depending on the circumstances and legal rules. In most cases, your employer or HR will compute the correct figure using the statutory calculation rules so that all relevant wage components are included.<\/p>\n\n\n\n<p><strong>Statutory Maximum (Cap):<\/strong> The transition payment is <strong>capped by law<\/strong> at a certain maximum amount. As of 2025, the <strong>maximum transition payment<\/strong> is <strong>\u20ac98,000 gross<\/strong>. If your own annual salary is higher than \u20ac98,000, then the maximum is one full year\u2019s gross salary. (In other words, an employee with a very high income is capped at at most 12 months\u2019 pay as their transition compensation.) This ceiling is <strong>indexed (reviewed) annually<\/strong> by the government and has been rising over time with inflation \u2013 for example, the cap was \u20ac94,000 in 2024 and \u20ac89,000 in 2023. Most employees will not reach the cap, but high-earning employees should be aware that they might not get \u201c1\/3 month per year\u201d for all years if the raw calculation exceeds the statutory maximum.<\/p>\n\n\n\n<p><strong>Deductions for Training Costs:<\/strong> Employers are allowed, under strict conditions, to <strong>deduct certain costs<\/strong> they have invested in the employee from the transition payment. Specifically, if your employer paid for <strong>outplacement services or training courses<\/strong> to help you find new work or improve your employability, those expenses can sometimes be subtracted from the amount of the transition payment. This is only permissible if the costs were for your benefit in the context of ending the employment (for example, paying for a reskilling course during the notice period) and if you were informed and agreed to such deduction. In practice, most employers do not unilaterally deduct training costs unless it was agreed in advance, but it\u2019s good to know that the <strong>law allows transitional support costs to offset the severance<\/strong> under certain circumstances.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"1000\" height=\"667\" src=\"https:\/\/dyclegal.com\/wp-content\/uploads\/2025\/05\/how-much-transition-payment-i-get.jpg\" alt=\"how much transition payment can i get\" class=\"wp-image-2449\" srcset=\"https:\/\/dyclegal.com\/wp-content\/uploads\/2025\/05\/how-much-transition-payment-i-get.jpg 1000w, https:\/\/dyclegal.com\/wp-content\/uploads\/2025\/05\/how-much-transition-payment-i-get-300x200.jpg 300w, https:\/\/dyclegal.com\/wp-content\/uploads\/2025\/05\/how-much-transition-payment-i-get-768x512.jpg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Legal_Basis_in_the_Dutch_Civil_Code_and_Recent_Changes\"><\/span>Legal Basis in the Dutch Civil Code and Recent Changes<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The rules on transition payment are codified in the <strong>Dutch Civil Code<\/strong>, specifically <strong>Book 7, Article 673<\/strong> (Burgerlijk Wetboek 7:673). This law was introduced as part of the Dutch Work and Security Act (<em>Wet Werk en Zekerheid<\/em>) which took effect on 1 July 2015. The introduction of the transition payment in 2015 marked a shift to a statutory severance system \u2013 replacing the older, discretionary severance formulas \u2013 to ensure <em>every<\/em> employee with sufficient service (back then, at least 2 years) would receive a fair payout on termination. Article 7:673 of the Civil Code sets out the entitlement conditions and the calculation formula, including the maximum cap. For instance, the law (as updated) explicitly states that the transition payment equals one-third of a month\u2019s salary per year of service (with part-years prorated) and is capped at the specified maximum.<\/p>\n\n\n\n<p><strong>Major 2020 Reform (Balanced Labour Market Act):<\/strong> On 1 January 2020, the Dutch government implemented the <strong>Balanced Labour Market Act<\/strong> (<em>Wet Arbeidsmarkt in Balans<\/em>, often abbreviated WAB) which significantly <strong>updated the transition payment rules<\/strong>. Key changes that took effect in 2020 include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Entitlement from Day One:<\/strong> The old requirement of 2 years\u2019 service to qualify for severance was abolished. Since 2020, employees accumulate transition pay from their very first day of employment. This closed a loophole where employers would avoid severance by giving 23-month contracts; now even short-term contracts earn a proportional transition payment.<\/li>\n\n\n\n<li><strong>Uniform Accrual Rate:<\/strong> Previously, the formula was more generous for long-tenured staff (and there was even a temporary higher rate for employees over 50). The WAB simplified the formula to a single rate for <strong>all<\/strong> employees: 1\/3 month per year regardless of years of service. Differentiations that existed \u2013 such as a lower accrual for the first 10 years and higher accrual after 10 years, or extra for over-50s \u2013 were eliminated. Now a year is a year, for everyone, making the calculation straightforward and equal.<\/li>\n\n\n\n<li><strong>Removal of Special Older-Employee Rule:<\/strong> Up until end of 2019, employees over 50 with 10+ years at a company had a higher entitlement (a temporary measure in the 2015 law). This has been removed, aligning older and younger employees under the same formula from 2020 onward.<\/li>\n<\/ul>\n\n\n\n<p>These changes reflect the current (2025) legal framework \u2013 meaning <strong>every employee<\/strong>, even those on very short or part-time contracts, is ensured at least a bit of severance, and long-serving employees accrue their severance more linearly over time. The transition payment thus truly became a universal <strong>employee right under Dutch law<\/strong> for any employer-initiated termination.<\/p>\n\n\n\n<p>Additionally, the government adjusts the <strong>maximum cap<\/strong> each year (usually on January 1) to keep up with wage inflation. For example, as noted earlier, the cap rose to \u20ac98,000 in 2025 from \u20ac94,000 in 2024. Employers and employees should stay updated on the cap, especially in high-salary cases.<\/p>\n\n\n\n<p><em>Legal reference:<\/em> Article 7:673 and related provisions also enumerate the exceptions to paying a transition fee (as discussed above) and empower courts to deviate in extreme cases. The law continues to evolve \u2013 for instance, there are ongoing discussions about compensating small businesses for transition payments in certain dismissals \u2013 but as of 2025 the core structure remains as described.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Additional_Severance_Compensation_in_Case_of_Employer_Misconduct\"><\/span>Additional Severance Compensation in Case of Employer Misconduct<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The transition payment is the minimum <strong>statutory severance<\/strong> an employer must pay. In normal cases, it fully discharges the employer\u2019s obligation. However, if a dismissal involves <strong>serious wrongdoing by the employer<\/strong>, Dutch law allows the court to grant the employee an <strong>additional compensation<\/strong> on top of the transition payment. This is often called a <strong>\u201cfair compensation\u201d<\/strong> (<em>billijke vergoeding<\/em> in Dutch) and is reserved for exceptional cases of <strong>unfair dismissal<\/strong>.<\/p>\n\n\n\n<p>For example, if an employer acted in a gravely culpable manner \u2013 say, firing an employee without any valid reason or in a flagrantly abusive way \u2013 the sub-district court can award a fair compensation as a form of penalty and extra damages to the employee. Unlike the transition payment (which is formula-based), fair compensation is <strong>not capped<\/strong> and is determined by the court based on circumstances. It\u2019s meant to <strong>make the employee whole<\/strong> in situations where the basic transition sum is deemed inadequate due to the employer\u2019s gross misconduct.<\/p>\n\n\n\n<p>It\u2019s important to note that such awards are <strong>rare<\/strong> and only given in egregious situations. In the vast majority of terminations, the transition payment (and possibly a mutually agreed extra severance if negotiating a settlement) is all that an employee will receive. But it is good to be aware that if you believe your dismissal was exceptionally unjust, you can ask the court for a fair compensation in addition to the transition payment. The burden is on the employee to prove the employer\u2019s serious culpability, and if successful, the court will decide an appropriate amount for this additional severance.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Receiving_Your_Transition_Payment_Timeline_and_Procedure\"><\/span>Receiving Your Transition Payment: Timeline and Procedure<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Payment Timeline:<\/strong> In practice, the transition payment is usually paid <strong>with your final paycheck or shortly after your last day<\/strong> of employment. The law does not set an exact deadline on when the employer must pay it, but it does stipulate that <strong>statutory interest<\/strong> will accrue if the payment is late by more than one month. This means if one month has passed since your employment ended and you still haven\u2019t received the transition compensation, the amount will increase with interest until it\u2019s paid. Employers therefore have a strong incentive to pay no later than one month after termination to avoid extra costs.<\/p>\n\n\n\n<p><strong>Taxes:<\/strong> The transition payment is paid gross and is subject to <strong>income tax<\/strong> just like your regular wages. Your employer will deduct wage tax from it, and the net amount you receive will depend on your tax bracket. Because it\u2019s considered income, a large severance payout in one year could affect things like your tax rate or eligibility for certain income-dependent benefits. (For example, it might temporarily raise your income for that year, potentially reducing housing or healthcare allowances.) Be mindful of this when planning finances; you may want to consult a tax advisor if the amount is significant.<\/p>\n\n\n\n<p><strong>How to Claim or Enforce Payment:<\/strong> In most cases, employers know their legal duty and will pay the transition sum automatically. You typically won\u2019t need to \u201capply\u201d for it \u2013 it should be calculated and given to you as part of your separation paperwork. It\u2019s wise to check your dismissal letter or settlement agreement to ensure the transition payment amount is explicitly stated. If your employer <strong>fails to pay<\/strong> the required transition compensation in a timely manner, you have the right to take action. You should first <strong>remind your employer in writing<\/strong> of the obligation. If they still do not pay, you can <strong>file a claim with the court<\/strong> for the transition payment (plus interest and potentially a penalty for late payment).<\/p>\n\n\n\n<p>Be aware that there is a <strong>time limit<\/strong> for legal action: you must file any claim for an unpaid transition payment <strong>within 3 months<\/strong> after your employment ended. If you wait longer than 3 months, you will lose the right to claim it through the courts. This deadline is strict, so do not delay if your employer hasn\u2019t paid what you\u2019re owed.<\/p>\n\n\n\n<p>In the case of an employer\u2019s bankruptcy or insolvency, as mentioned, the transition payment may unfortunately be unclaimable from the bankrupt employer. The UWV (government agency) does step in to pay employees certain outstanding amounts (like unpaid wages, holiday pay, etc.) when an employer goes bankrupt, but it <strong>does not cover the transition payment<\/strong>. This is why the law exempts bankrupt employers from the requirement. Employees in such situations become creditors in the bankruptcy, but often there are no funds left for severance payments.<\/p>\n\n\n\n<p><strong>Instalments in Hardship:<\/strong> If an employer is in genuine financial difficulty but not formally bankrupt, Dutch law allows some leeway to <strong>pay the transition sum in instalments<\/strong> (over a maximum of 6 months) provided the employee agrees. If your employer proposes this, know that they will still owe statutory interest on the outstanding balance. This scenario is relatively uncommon and would typically be part of a negotiation if, for example, a small company is struggling with cash flow.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"1000\" height=\"667\" src=\"https:\/\/dyclegal.com\/wp-content\/uploads\/2025\/05\/all-you-need-to-know-transition-payment.jpg\" alt=\"all you need to know about transition payment\" class=\"wp-image-2447\" srcset=\"https:\/\/dyclegal.com\/wp-content\/uploads\/2025\/05\/all-you-need-to-know-transition-payment.jpg 1000w, https:\/\/dyclegal.com\/wp-content\/uploads\/2025\/05\/all-you-need-to-know-transition-payment-300x200.jpg 300w, https:\/\/dyclegal.com\/wp-content\/uploads\/2025\/05\/all-you-need-to-know-transition-payment-768x512.jpg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The transition payment is a cornerstone of <strong>employee rights in the Netherlands<\/strong> when it comes to dismissal. It ensures that employees receive at least a basic severance pay when their <strong>employment ends in the Netherlands<\/strong> at the employer\u2019s initiative. In 2025, the framework is well-established: virtually every employee \u2013 from a temporary temp to a long-serving manager \u2013 is protected by this law. If you are facing termination, make sure you understand your entitlement under Article 7:673 of the Dutch Civil Code and how much you should receive. Knowing the rules will help you ensure you get the <strong>severance pay<\/strong> you\u2019re owed, navigate any negotiations with your employer, and plan your next steps with greater confidence. While losing a job is never easy, the transition payment provides a measure of financial security to help you through the transition to new employment \u2013 a right that every employee working in the Netherlands should be aware of and exercise when applicable.<\/p>\n\n\n\n<p><strong>Sources:<\/strong> The above information reflects the current Dutch labour law (2025) on transition payments, including recent updates from government regulations and reputable legal sources. Always consider seeking professional legal advice for your specific situation, but as a general guide, this article covers the key points of the Dutch transition payment (transitievergoeding) that every employee should know.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Source\"><\/span>Source<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.rijksoverheid.nl\/onderwerpen\/ontslag\/vraag-en-antwoord\/heb-ik-recht-op-een-vergoeding-als-ik-word-ontslagen\" rel=\"nofollow noopener\" target=\"_blank\">https:\/\/www.rijksoverheid.nl\/onderwerpen\/ontslag\/vraag-en-antwoord\/heb-ik-recht-op-een-vergoeding-als-ik-word-ontslagen<\/a><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is a Transition Payment in the Netherlands? When an employment contract ends at the employer\u2019s initiative in the Netherlands, the employer is generally required by law to pay a transition payment (in Dutch: transitievergoeding) to the employee. This transition payment is essentially a form of statutory severance pay in the Netherlands, designed to support [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2453,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-2446","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blogs"],"_links":{"self":[{"href":"https:\/\/dyclegal.com\/en\/wp-json\/wp\/v2\/posts\/2446","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dyclegal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dyclegal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dyclegal.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dyclegal.com\/en\/wp-json\/wp\/v2\/comments?post=2446"}],"version-history":[{"count":0,"href":"https:\/\/dyclegal.com\/en\/wp-json\/wp\/v2\/posts\/2446\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dyclegal.com\/en\/wp-json\/wp\/v2\/media\/2453"}],"wp:attachment":[{"href":"https:\/\/dyclegal.com\/en\/wp-json\/wp\/v2\/media?parent=2446"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dyclegal.com\/en\/wp-json\/wp\/v2\/categories?post=2446"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dyclegal.com\/en\/wp-json\/wp\/v2\/tags?post=2446"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}