Calculating Redundancy Pay in Eindhoven Step by Step

Calculating the transition payment: step by step

Would you like to calculate your transition payment step by step? Below you can read how to work out and verify your severance payment yourself.

Are you facing dismissal 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 you can work out that amount yourself, so you know exactly where you stand.

Wat de berekening bepaalt

The amount of your transition payment depends on two factors: your gross monthly salary and how long you have been employed. These two figures together form the basis of the calculation. The starting point is straightforward: for each full 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 partial 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 working on a fixed-term contract.

Step 1: Establish your gross monthly salary

Before you can calculate, you need to know what your 'calculation wage' is. This is not simply your basic salary. Various fixed pay components are taken into account, such as:

• Holiday allowance (typically 8% of your gross monthly salary)
• A fixed year-end bonus or 13th month (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 starting point applies. For these you look at the average over the past three years. If you add up the calculation wage incorrectly, the final calculation can deviate from the actual figure by hundreds or even thousands of euros.

Step 2: Calculate the payment per year of service

Once you have your reference salary in order, the formula for full years of service is straightforward:

Number of full 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 lasts for an exact number of whole years. For the months and days that remain after the full years of service, use the following formula:

(Gross salary over the remaining period / gross monthly salary) × (1/3 gross monthly salary / 12)

This sounds complicated, but it comes down to calculating a proportional share of the annual accrual. You add this amount to the payment for the full years. The end result is your total transition payment.

The statutory maximum in 2026

However much you accrue, a statutory cap applies. The maximum transition payment in 2026 is €102,000 gross. If your annual salary exceeds that 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 was still €98,000.

Gross is not what you receive

The transition payment is always calculated and paid out gross. When your employer makes the payment, they will deduct wage tax, meaning you will receive less net than the calculated gross amount. The payment is added to your other annual income and taxed in box 1. How high your tax burden turns out to be depends on your total income in the year of dismissal. There are situations in which it is wise to think about this in advance, for example by making use of training costs or outplacement programmes. Always consult a specialist regarding your specific tax situation.

Common mistakes in the calculation

In practice, errors regularly occur in the calculation submitted by the employer. Be aware of the following pitfalls:

• Vakantiegeld vergeten: employers sometimes omit this from the calculation wage.
• Verkeerde einddatum: a difference of even one day can already have financial consequences.
• Bonus niet meegenomen: a structural variable remuneration should be included in the calculation.
• Consecutive periods of employment disregarded: successive contracts count together in principle, unless there was a break of six months or more between them.
• Years of illness processed incorrectly: even in cases of long-term illness, the transition payment is calculated on the basis of the salary earned before the incapacity for work.

Always check the calculation provided by your employer yourself, or have it checked by a professional. Your employer is legally required to pay no later than one month after the end of the employment contract.

The transition payment is a minimum

What many people do not know 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 feasible 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? Then also read our page on transition payment.

Why Employment Lawyer Eindhoven

At Arbeidsjurist Eindhoven we know the local labour market and understand what is happening in Brabant. We can help you check your employer's calculation, identify any errors, and assess whether negotiating is worthwhile. Not sure whether your transition payment is correct, or simply want to know where you stand? Contact us without obligation — we are happy to think things through with you.

Frequently asked questions

How do I calculate my transition payment in 2026?

The basic formula is: the number of complete years of service multiplied by one third of your gross monthly salary. For any remaining months and days, the amount is calculated 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 is €102,000 gross. If your annual salary exceeds €102,000, your gross annual salary applies as the maximum. This amount is indexed annually on the basis of contractual wage developments.

Does my holiday pay count towards the calculation of the transition payment?

Yes. Holiday pay (generally 8%) forms part of the reference salary that serves as the basis for the calculation. A fixed end-of-year bonus, structural overtime allowance, and shift allowance are also included. Employers sometimes incorrectly omit these, resulting in the calculation being too low.

May my employer deduct costs from the transition payment?

Under strict conditions, yes. Costs relating to training, outplacement, or broadening the 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 own role may never be deducted.

When must my employer pay the transition payment?

The employer is legally required to pay the transition payment no later than one month after the end of the employment contract. If payment is made late, the employee may be entitled to a statutory increase as a sanction for the late payment.

We are happy to think along with you. For advice tailored to your situation, we would be glad to talk. No rights can be derived from the content of this page and it may contain inaccuracies.