Have you been made redundant and want to know how much you are entitled to? The calculation of the transition payment follows a fixed statutory formula based on your gross monthly salary and the length of your employment. In this article, we explain step by step how to work out that amount yourself, so you know exactly where you stand.
What determines the calculation
The amount of your transition payment depends on two factors: your gross monthly salary and how long you have been employed. These two pieces of information together form the basis of the calculation. The starting point is straightforward: for every complete year of service, you accrue one third of your gross monthly salary in transition payment. For the period remaining after the full years of service, the law calculates on a pro-rata basis — including individual months and even individual days.
Important: accrual begins from your very first working day. This also applies if you are dismissed during your probationary period or if you are on a fixed-term contract.
Step 1: Establish your gross monthly salary
Before you can start calculating, you need to know what your ‘reference salary’ is. This is not simply your basic salary. Various fixed pay components are also included. These are:
- Holiday pay (typically 81% of your gross monthly salary)
- A fixed year-end bonus or 13th month payment (you add 1/12 of this)
- Structural overtime allowance or shift allowance
- Fixed irregular hours allowance
For variable remuneration – such as a bonus, profit share or commission – a different approach applies. For these, you look at the average over the past three years. If you calculate the reference salary incorrectly, the final result can differ from the true figure by hundreds or even thousands of pounds.
Step 2: Calculate the payment per year of service
Once you have established your reference salary, the formula for complete years of service is straightforward:
Number of complete years of service × (1/3 × gross monthly salary)
For example: you have worked for 8 years and your reference salary is €3,500 gross per month. The calculation is then: 8 × (€3,500 / 3) = €9,333.33 gross.
Step 3: Calculate the remaining period on a pro-rata basis
Employment rarely ends on an exact anniversary. For the months and days remaining after the complete years of service, you use the following formula:
(Gross salary for the remaining period / gross monthly salary) × (1/3 gross monthly salary / 12)
This sounds complicated, but it amounts to calculating a proportionate share of the annual accrual. You add this amount to the payment for the complete years. The final result is your total severance pay.
The statutory maximum in 2026
No matter how much you accrue, a statutory cap applies. The maximum transitievergoeding in 2026 is €102,000 gross. If your annual salary exceeds this amount, your gross annual salary serves as the upper limit. This maximum is adjusted each year in line with the development of contractual wages; in 2025 the cap stood at €98,000.
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Plan a conversationGross is not what you receive
The transition payment is always calculated and paid on a gross basis. Your employer deducts wage tax upon payment, so you will receive less net than the gross amount calculated. The payment is added to your other annual income and taxed in box 1. How much tax you pay depends on your total income in the year of dismissal. In some situations it is worth thinking about this in advance — for instance by making use of training costs or outplacement programmes. Always consult an expert regarding your specific tax situation.
Common mistakes in the calculation
In practice, errors frequently occur in the calculation provided by the employer. Be aware of the following pitfalls:
- Holiday entitlement missed Employers sometimes leave this out of the reference salary.
- Wrong end date: Even a single day's difference can have financial consequences.
- Bonus not included A structural variable payment should be included in the calculation.
- Consecutive contracts ignored: Successive contracts are, in principle, counted together, unless there was a break of six months or more between them.
- Periods of illness handled incorrectly: Even during long-term illness, the transition payment is calculated based on the salary earned prior to incapacity for work.
Always check the calculation provided by your employer yourself, or have it checked by a professional. Your employer is obliged to pay no later than one month after the end of the employment.
The transition payment is a minimum
What many people don't realise is that the statutory transition payment is a floor, not a ceiling. You can — particularly in the case of dismissal via a settlement agreement — negotiate a higher payment. How achievable this is depends on the grounds for dismissal, your position in the labour market and your employer’s willingness to negotiate. Would you like to know more about your entitlements? Read our page on transition payment.
Why Labour Lawyer Eindhoven
At Arbeidsjurist Eindhoven, we know the local labour market and understand what is happening in Brabant. We help you check your employer’s calculation, identify errors, and assess whether negotiating is worthwhile. Are you unsure whether your transitievergoeding is correct, or do you simply want to know where you stand? Contact us without obligation – we are happy to think things through with you.
Frequently asked questions
Hoe bereken ik mijn transitievergoeding in 2026?
The basic formula is: the number of complete years of service multiplied by one third of your gross monthly salary. For the remaining months and days, you calculate the amount on a pro-rata basis. In addition to your basic salary, your reference salary also includes holiday pay, any 13th month payment and fixed allowances.
What is the maximum transition payment in 2026?
In 2026, the maximum transition payment will be €102,000 gross. If your annual salary exceeds €102,000, your gross annual salary will serve as the upper limit. This amount is indexed each year in line with the development of contractual wages.
Is my holiday allowance included in the calculation of the transition payment?
Yes. Holiday pay (typically 8%) forms part of the reference salary used as the basis for the calculation. A fixed year-end bonus, structural overtime pay and shift allowance are also included. Employers sometimes incorrectly omit these, resulting in the calculation being too low.
Can my employer deduct costs from the transition payment?
Under strict conditions, yes. Costs for training, outplacement or broadening an employee's employability may sometimes be deducted, provided they were incurred in advance for that purpose and meet the statutory requirements. Costs for reintegration or improving performance in the employee's current role may never be deducted.
When must my employer pay the transition payment?
The employer is legally obliged to pay the transition payment no later than one month after the termination of the employment. If payment is made late, the employee may be entitled to statutory interest as a penalty for the delayed payment.
We're happy to help you brainstorm ideas. For advice tailored to your specific situation, we'd be happy to sit down with you. No rights can be derived from the content of this page and it may contain inaccuracies.
