Transition payment: how much is it and is it worth negotiating?

The transition payment (transitievergoeding) is the statutory payment your employer must pay if they take the initiative to terminate your employment. The amount is laid down by law. In a settlement agreement, however, the transition payment is above all a minimum: in many cases, more is possible.

What is the transition payment?

The transition payment is a mandatory severance payment. Your employer must in any event pay it if the employment ends at their initiative, even if there is a ground for dismissal.

Two examples:

• Your employer reorganises, applies to the UWV for permission and obtains it. Your employer must then in any event pay you the transition payment.
• Your employer applies to the subdistrict court on grounds of underperformance, and the court rules that this is indeed the case. In that case too, you are entitled to the transition payment.

As the name suggests, the payment is intended to help you make the transition from your current job to new employment.

How much is the transition payment?

The calculation rule is simple: for every three years of employment, you receive one month's gross salary. That is one third of a month's salary per year of service, and it accrues from your first working day.

Importantly, it is not just about your base salary. The calculation also includes, among other things:

• your holiday allowance;
• a fixed thirteenth month;
• fixed allowances;
• variable remuneration such as bonuses, averaged over the past years.

As a result, the transition payment may be higher than you would expect on the basis of your monthly salary alone. Particularly in the higher income bracket, where a bonus can make up a substantial part of income, it is important to check that all components have been included.

Is there a cap?

Yes. The transition payment is subject to a statutory cap that increases every year. In 2026, it is EUR 102,000 gross. If you earn more than that amount per year, your gross annual salary applies as the cap.

Why the transition payment is often disappointing

To be fair: the transition payment is usually not that high. Most employees have been employed by their current employer for less than six years. Six years of employment yields two months' gross salary. After three years, it is one.

For someone who loses a good job and has to take a new step, that is often not adequate compensation.

Is it worth negotiating?

There is little to negotiate about the transition payment itself: it is a statutory amount. There is, however, often room for a higher severance payment, on top of or instead of the transition payment.

How much room there is depends mainly on whether there is a ground for dismissal:

• Is there a ground for dismissal? Then your employer can dismiss you without a settlement agreement as well, and the transition payment is often the starting point. In any event, check whether the calculation is correct and all salary components have been included.
• Is there no ground, or only a weak ground, for dismissal? Then your employer needs your consent. Your negotiating position is stronger, and a payment above the transition payment is readily achievable.

Read more about the ground for dismissal in Received a settlement agreement? What you need to know.

What else can you negotiate?

A better settlement is not only about money. Also consider:

• a later termination date;
• garden leave (vrijstelling van werk), so that you have time for your next step;
• the lapse of your non-compete clause;
• a contribution towards outplacement or coaching.