The amount of the transition payment is one third of your gross monthly salary per year of service, pro rata for shorter periods. For an employment of five years with a monthly salary of €3,000 that works out to roughly €5,000 gross. In 2026 there is a maximum: the transition payment amounts to no more than €102,000 gross, or one gross annual salary if you earn more than that amount per year. In this article you read how the amount of the transition payment is determined, which salary components count, a concrete calculation example and where the legal maximum lies.
How is the amount of the transition payment determined?
The amount of the transition payment depends on two factors: the length of your employment and your gross monthly salary. Since 2020 the legal formula is the same for everyone, regardless of your age or how long you have been employed:
One third of the gross monthly salary per full year of service, plus a proportional part for the remaining months and days.
Since the introduction of the Labour Market in Balance Act (WAB) you build up the payment from your first working day and every day worked counts. There is therefore no longer any rounding to whole or half years. Would you first like to know whether you qualify at all? Then read when you are entitled to a transition payment, because without entitlement the amount is not relevant.
For the calculation, not only your bare monthly wage counts. The gross monthly salary consists of:
- The fixed gross monthly wage.
- Holiday allowance (8 percent).
- A fixed thirteenth month or year-end bonus.
- Structural allowances, such as a shift allowance.
- The average structural variable pay over the last three years, such as overtime or a bonus.
Not included are, among other things, expense allowances, the company car and the employer’s share of the pension premium. Because holiday allowance and fixed allowances count, the amount of the transition payment often turns out slightly higher than people expect based on their bare monthly wage.
Calculation example
A concrete example makes the amount of the transition payment clearest. Suppose: you earn a gross monthly wage of €3,200, including fixed allowances your monthly salary for the calculation comes to €3,500, and you have been employed for 6 years and 4 months.
- 6 years x (1/3 x €3,500) = €7,000
- 4 months x (1/3 x €3,500 / 12) = approximately €389
Total indication: approximately €7,389 gross.
Another example for a shorter employment. Your gross monthly salary is €2,800 and you have worked for 1 year and 6 months:
- 1 year x (1/3 x €2,800) = €933
- 6 months x (1/3 x €2,800 / 12) = €467
Total indication: approximately €1,400 gross.
These amounts are indicative: the exact amount depends on the precise salary components and the number of days. Also bear in mind that you pay payroll tax on the payment. How much you keep net depends on your total annual income. In the article on transition payment and tax you read how the tax authorities treat the payment and how you can use part of it tax-free.
Maximum transition payment 2026
There is a legal ceiling on the amount of the transition payment. In 2026 the maximum transition payment is €102,000 gross. If you earn more than €102,000 per year, one gross annual salary applies as the maximum. The higher of those two amounts is therefore your ceiling.
A few situations for clarification:
- Your annual salary is €55,000 and the formula results in €70,000. You then receive €70,000, because that stays below the maximum of €102,000.
- Your annual salary is €140,000 and the formula results in €150,000. You then receive €140,000, because your annual salary is higher than €102,000 and applies as the maximum.
- The formula results in €120,000 and your annual salary is €90,000. You then receive €102,000, the legal maximum.
The maximum amount is adjusted every year on 1 January in line with wage developments. For most employees the ceiling plays no role, because their calculated payment stays well below €102,000. The maximum mainly affects employees with a long employment or a high salary. Would you like to see where the maximum lands for you in relation to the formula? Then also read the general explanation of the transition payment, in which we set out the legal framework and the conditions.
Calculate your transition payment
The formula is not complicated, but with all the salary components and the daily calculation, a calculation tool is the quickest and most accurate. Enter your gross monthly salary and your years of service and you immediately see an indication of the amount. For that, use our tool to calculate your transition payment.
Once you know the amount, also think about how to spend it. You can use (part of) the payment for guidance towards new work. An outplacement programme helps you find a suitable job more purposefully and faster, and that investment often pays off in a shorter period without income. This way you turn the amount of your transition payment not only into a figure on paper, but into a concrete step towards your next job.