You are entitled to a transition payment when your employment contract ends on your employer’s initiative. This applies to dismissal through the UWV or the subdistrict court, to a settlement agreement and also when a fixed-term contract is not renewed. Since 1 January 2020 you build up this entitlement from your very first working day, regardless of how long you have been employed. Only in a limited number of clearly defined situations does the entitlement lapse, for example if you resign yourself or acted in a seriously culpable way. In this article you read exactly when you are and are not entitled to a transition payment, what applies to a fixed-term contract and how to calculate the amount.
When are you entitled to a transition payment?
The core rule is simple: you are entitled to a transition payment as soon as the initiative to end the contract lies with your employer. Since 2020, the length of your employment no longer determines whether you are entitled, only how high the amount is. You are therefore entitled to a transition payment in the following situations:
- Your employer terminates the contract with permission from the UWV, for example in the case of a business economic dismissal.
- The subdistrict court dissolves your employment contract.
- You sign a settlement agreement that includes the payment (common in practice, although the amount is formally negotiable there).
- Your fixed-term contract expires and your employer does not renew it.
- You resign or request dissolution yourself because your employer acted in a seriously culpable way.
You also keep your entitlement to a transition payment after dismissal following two years of illness. The background and how it connects to the dismissal process is explained in the article on dismissal and transition payment, which covers your rights and obligations throughout the procedure.
Good to know: the entitlement to a transition payment is laid down by law in the Dutch Civil Code. Your employer cannot simply contract this right away. Since the introduction of the Labour Market in Balance Act (WAB) in 2020, the entitlement applies from day one, whereas before that a minimum of 24 months of employment was required. This mainly makes a difference for employees with a shorter or fixed-term contract.
Exceptions: when are you not entitled to a transition payment?
There are situations in which the entitlement to a transition payment lapses. This concerns a limited, legally defined list. You are not entitled to a transition payment if:
- You resign yourself without your employer having acted in a seriously culpable way. Anyone who leaves on their own initiative does not build up a claim.
- The dismissal is your own seriously culpable fault, for example in the case of fraud, theft or summary dismissal with a valid urgent reason.
- You have reached the state pension age at the moment the employment ends.
- Your employer is bankrupt or in suspension of payment or debt restructuring.
- You are younger than 18 and worked no more than 12 hours a week on average.
The exception around seriously culpable conduct is strict: a damaged working relationship or underperformance does not count as seriously culpable. Are you unsure whether your situation falls under an exception? Then have the termination assessed before you sign, because a signature under a settlement agreement has major consequences for your rights and your unemployment benefit.
Also watch out for the reverse: are you entitled to a transition payment but your employer does not pay it out? Then submit a request to the subdistrict court within three months of the end of the employment. Do not wait too long, because this deadline is strict.
Entitlement to a transition payment with a fixed-term contract
Many employees think a fixed-term contract does not give any entitlement to a transition payment. That is not correct. If your fixed-term contract expires and your employer does not offer a renewal, you are entitled to a transition payment for the entire period you were employed. Here too the rule is: the entitlement exists from the first working day.
A few points of attention with a fixed-term contract:
- If your employer does not renew, they pay the compensation. Not continuing the contract is a termination on the employer’s initiative.
- If you say no yourself to an equivalent renewal, your entitlement to a transition payment lapses in principle.
- Successive contracts count together for the calculation, as long as the gap between contracts was no longer than six months.
Temporary agency workers and on-call workers can also be entitled to a transition payment, as long as there is an employment contract that ends on the employer’s initiative. Unsure about your situation after a series of fixed-term contracts? Then first check what the general rules on the transition payment mean for you and gather your payslips and contracts, so you can verify the build-up.
Calculate your transition payment
Once you know you are entitled to a transition payment, the next question is naturally: how much do I get? The payment amounts to one third of your gross monthly salary per year of service, pro rata for shorter periods. How that formula works out exactly and where the 2026 maximum lies is explained in the article on the amount of the transition payment.
Would you like a concrete figure right away? Then use our tool to calculate your transition payment. You enter your salary and years of service and immediately see an indication of your payment.
One final tip: you can use part of your transition payment for guidance towards new work. An outplacement programme increases your chance of a suitable job and shortens the period without work. This way you use your entitlement to a transition payment not only as a financial buffer, but also as an investment in your next step. If you know where you stand, you are stronger in the conversation with your employer and make more conscious choices for your career.