Dutch Severance Pay (Transitievergoeding) Explained for 2026

When a Dutch employer ends your contract, you are usually entitled to a statutory severance payment called the transitievergoeding. It follows a fixed formula: one third of a month's salary for every year you worked, pro-rated to the day for partial years. This guide explains what the payment is, exactly how the formula and pro-rata work, the 2026 maximum of 102,000 EUR or one annual salary if higher, and when it is and is not owed, with a worked example at 3,000 EUR per month over ten years.

What the transitievergoeding is

The transitievergoeding is the statutory severance an employer owes when it ends or does not renew an employment contract on its own initiative. It applies to permanent and temporary contracts alike, and it counts from your very first working day, with no minimum length of service. The idea is to help you bridge the transition to new work, which is where the name comes from. It is paid gross, so income tax is withheld on it like other income.

The 1/3-month-per-year formula

The rule is simple: for each full year of service you receive one third of a gross monthly salary. The monthly salary used is your gross pay, including structural extras such as the 8% holiday allowance and a fixed thirteenth month where they apply. For the months and days that do not add up to a full year, the payment is calculated proportionally, right down to the day, so there is no rounding up to a whole year and no threshold you have to cross first.

Worked example: 3,000 EUR per month, 10 years

Take a gross monthly salary of 3,000 EUR and exactly ten years of service. One third of 3,000 EUR is 1,000 EUR, and over ten years that is 10 times 1,000, which gives a transitievergoeding of 10,000 EUR gross. If you had worked ten years and six months, the extra half year would add half of 1,000 EUR, so 500 EUR, for a total of 10,500 EUR. The cap does not bite here: one annual salary is 36,000 EUR and the statutory maximum is 102,000 EUR, both far above the payment.

The 2026 maximum

The payment is capped. In 2026 the maximum transitievergoeding is 102,000 EUR gross. There is one exception that helps high earners: if your gross annual salary is more than 102,000 EUR, the cap equals one full annual salary instead. So someone earning 30,000 EUR a month, with an annual salary of 360,000 EUR, is limited to 360,000 EUR rather than the flat 102,000 EUR figure. In practice the cap only matters after very long service or at very high pay.

When it is and is not owed

You are generally entitled to the transitievergoeding when the employer ends the contract, lets a temporary contract expire without renewing it, or when a court dissolves it at the employer's request. It is generally not owed if you resign yourself, if the dismissal results from serious culpable conduct on your part, or if you have reached the AOW state pension age. Some situations, such as company bankruptcy or a settlement agreement (vaststellingsovereenkomst), follow their own rules.

To run your own numbers, enter your gross monthly salary and years of service in the calculator below.