Business.gov.nl
Logo of the Dutch governmentGo to homepage

Government information for entrepreneurs

This article is related to:

Transition payment

This information is provided by

Netherlands Enterprise Agency, RVO

If you dismiss an employee or you do not extend their contract, you have to compensate them for expected costs that help them find new employment. The payment can then be used for scholing or outplacement. This is called a transition payment. A transition payment is not obligatory in cases where severance payment has been agreed.

When do you pay a transition payment?

  • When you dismiss an employee.
  • When you do not extend the contract of an employee.
  • An employee resigns following seriously culpable conduct or neglect on your part.
In some cases you do not need to pay a transition paymentExternal link (in Dutch).

Calculation of transition payment

The transition payment depends on the monthly salary and number of years of employment. Use the online calculation toolExternal link (in Dutch) to see how much you need to pay.

Changes to transition payments

A new law came into force on 1 January 2020 to regulate flexible work, dismissal and the financing of unemployment benefit. Through the Balance Employment Market Act (Wet arbeidsmarkt in balans, WAB), it is more attractive for employers to offer a fixed contract rather than a flexible one. At the same time flex workers have more stability in their job and income. The new law affects:

  • Dismissals and transitional payments
  • Temporary employees and chain provision
  • Payroll staff and stand-by workers
The new law also brings fixed and flexible contracts into line with one another with regard to transition payments to make it more attractive for employers to offer a fixed contract rather than a flexible one. Find out more about the Balance Employment Market Act.

This article is related to:

This information is provided by

Netherlands Enterprise Agency, RVO