Are you being made redundant and wondering whether you are entitled to redundancy pay, a transition payment, or both? These terms are often used interchangeably in practice, but they do not mean the same thing. Once you understand the difference, you will know exactly what you can expect as an employee in Eindhoven and when there may be more on offer than your employer is proposing.
Transition payment and redundancy pay are not the same thing
The transition payment is a statutory payment that your employer is obliged to make upon dismissal. The basis for this is set out in Article 7:673 of the Dutch Civil Code, and the amount is determined by the government: for each full year of service, you accrue one third of a monthly salary. Redundancy pay is a broader concept. It is the total amount you receive upon dismissal — the transition payment may form part of this, but there can be more besides.
In short: every transition payment is a form of redundancy pay, but not every redundancy payment consists solely of the transition payment. That distinction matters when you want to know whether your employer is making you a fair offer.
What the transition payment entails in 2026
The calculation of the transition payment is straightforward: you receive one third of a gross monthly salary for each full year worked. If you have worked for five years, that amounts to just over one and a half months’ salary. The statutory maximum in 2026 is €102,000 gross. If your annual salary exceeds that figure, your gross annual salary serves as the cap.
It is important to note that you start accruing the transition payment from your very first working day. Whether you are on a fixed-term contract, a permanent contract, or a zero-hours contract — if dismissal is initiated by the employer, you are in principle entitled to this payment. The right lapses only if you as an employee are seriously at fault.
When is redundancy pay higher than the transition payment?
The transition payment is a statutory minimum. Your actual redundancy pay can be higher in a number of situations:
- Settlement agreement: where dismissal takes place by mutual consent, you are free to negotiate. There is no statutory right to the transition payment in this situation, but in practice an employer will still offer this amount — and sometimes there is room for more.
- Fair compensation: if the cantonal court finds that your employer has acted in a seriously culpable manner, it may award fair compensation on top of the transition payment. There is no statutory cap on this additional amount.
- Untaken holiday days and benefits: payment for accrued holiday days, outstanding bonuses, or other employment benefits all count towards your total redundancy pay.
- Social plan: in the event of a reorganisation, a social plan may apply containing different arrangements regarding the level of compensation.
- Collective agreement provisions: some collective labour agreements contain supplementary arrangements, although these have partly been replaced by other provisions in cases of dismissal on economic grounds.
What does this mean in practice for you as an employee in Eindhoven?
In the Eindhoven and Brabant labour market — spanning manufacturing, tech, and healthcare — employees are regularly offered a settlement agreement. Such agreements almost always include a payment, but it is far from always well-founded or complete. Nevertheless, many people sign quickly, when in reality there is scope for a higher redundancy payment.
Plan een vrijblijvend gesprek en ontdek wat we voor je kunnen betekenen.
Plan een gesprekThis is particularly true if your employer has an incomplete dismissal file, if you have a long period of service, or if the reason for dismissal is not entirely clear. An employment lawyer can quickly assess whether the offer is reasonable or whether more can be obtained.
Practical points to bear in mind regarding redundancy pay:
- Always check whether the calculated transition payment is correct based on your full period of service and monthly salary.
- Make sure all fixed allowances and holiday pay have been included in the gross monthly salary.
- Check whether a social plan applies in the event of collective redundancy or a reorganisation.
- Be alert to an excessively short reflection period: after signing a settlement agreement, you have fourteen days in which to change your mind.
- Do not be caught out by the tax implications; redundancy pay is taxed as income from employment, which may push you into a higher tax bracket.
When should you consult an employment lawyer?
Not every dismissal situation is the same. Where an offer is straightforward and correct, it may sometimes be sufficient to check the calculation yourself. But as soon as you have doubts about the level of the payment, the reason for dismissal does not add up, or your employer is pressuring you to sign quickly, it is wise to seek expert advice. An employment lawyer looks not only at the transition payment, but at the total redundancy pay and the scope for negotiation in your specific situation. Read more about your rights on the page about Transition Payment.
Why Arbeidsjurist Eindhoven?
At Arbeidsjurist Eindhoven, we know the local labour market and understand how employers in the region approach dismissal and compensation. We work through the situation with you, examining what your employer is offering, whether the calculation is correct, and whether there is scope for a better arrangement. Get in touch with us without obligation — we will help you quickly and personally.
Frequently asked questions
What is the difference between redundancy pay and a transition payment?
The transition payment is the statutory payment you receive upon dismissal initiated by your employer: one third of a gross monthly salary for each full year of service. Redundancy pay is a broader concept: the total amount you receive upon dismissal, including the transition payment and any additional elements such as payment for accrued holiday days, bonuses, or fair compensation. The transition payment is therefore one component of the overall redundancy pay.
What is the maximum transition payment in 2026?
In 2026, the statutory maximum transition payment is €102,000 gross. If your annual salary exceeds €102,000, your gross annual salary serves as the cap. This amount is indexed annually on the basis of contractual wage developments.
Can my total redundancy pay be higher than the transition payment?
Yes. Where a settlement agreement is involved, there is scope to negotiate a higher payment. In addition, the cantonal court may award fair compensation if your employer has acted in a seriously culpable manner. Untaken holiday days and outstanding bonuses can also increase your total redundancy pay.
Am I entitled to the transition payment when signing a settlement agreement?
Where dismissal takes place by mutual consent via a settlement agreement, you formally have no statutory right to the transition payment. In practice, however, the employer almost always offers this amount, as they require your cooperation. Moreover, a settlement agreement often provides scope to negotiate a higher payment than the statutory transition payment.
When is it advisable to consult an employment lawyer about redundancy pay?
It is worth consulting an employment lawyer if you have doubts about whether the calculation is correct, if your employer is pressuring you to sign quickly, or if the reason for dismissal is not entirely clear. An employment lawyer will assess not only the level of the transition payment, but also the total redundancy pay and the options for negotiating a better arrangement.
We are happy to think along with you. For advice tailored to your situation we would gladly sit down with you. No rights can be derived from the content of this page and it may contain inaccuracies.
