Statutory Redundancy Pay 2026 New Rules Explained

Transition payment 2026: the new rules

New rules regarding the transition payment apply for 2026. Below we set out the most important changes for you.

In 2026 a number of things are changing with regard to the transition payment. The maximum amount is rising, the compensation scheme for employers is being revised, and the collective labour agreement rules are also being tightened. Would you like to know where you stand? We set out the most important changes clearly below.

The new maximum amount in 2026

The most striking news is the increase in the statutory maximum. Whereas in 2025 you still had to reckon with a cap of € 98,000, that amount is considerably higher this year. As of 1 January 2026 the transition payment is capped at € 102,000 gross. Do you earn more than that on an annual basis? Then your gross annual salary applies as the maximum payment. This maximum is indexed annually on the basis of the development of contractual wages, and for 2026 that means an increase of € 4,000 compared to the previous year.

The calculation rule itself remains unchanged: you receive 1/3 of a gross monthly salary for each full year of service, with any period beyond a full year calculated on a pro-rata basis. A period of employment of ten years and three months therefore yields slightly more than exactly ten years of service.

Entitlement to a transition payment from day one

A rule that has been in force since 2020 but still regularly causes confusion: you accrue the right to a transition payment from your very first working day. It does not matter whether you are on a fixed-term contract, working as an on-call worker, or even still within your probationary period. As soon as the employer takes the initiative to end or not to continue the employment relationship, you are in principle entitled to the payment. If you waive that right by resigning yourself, it will generally lapse.

One exception does apply: if you have acted in a seriously culpable manner, the court may rule that the employer owes no transition payment. Conversely, in addition to the transition payment, there is also what is known as a fair compensation (billijke vergoeding), which the court may award if the employer has acted in a seriously culpable manner. There is no statutory cap on this.

Change to the compensation scheme for long-term illness

One of the most far-reaching proposals for employers in 2026 concerns the compensation scheme for dismissal following two years of illness. At present, employers can reclaim from UWV the transition payment paid in connection with a long-term sick employee. However, the cabinet wishes to restrict that scheme to small employers. A small employer is defined as an employer with a total wage bill of no more than 25 times the average insurable wage per employee per year. The intended effective date of this legislative proposal is 1 July 2026, although parliament still has to give its final approval.

Medium-sized and large employers who currently still qualify for compensation would be well advised to adjust their financial planning accordingly. Transitional law applies to ongoing sick-leave trajectories with an end date before 1 July 2026, so that the right to compensation is retained in those cases.

Collective labour agreement and alternative arrangements

A collective labour agreement (CAO) may include an alternative provision in place of the statutory transition payment. However, clear limits also apply here in 2026. Such a deviating arrangement may only be agreed in cases of dismissal for business-economic reasons. The provision no longer needs to be equivalent euro for euro to the statutory payment, but it must be aimed at preventing or shortening unemployment, include a reasonable financial payment, or offer a combination of both. Does your situation fall under a CAO? If so, it is worth checking whether the provision on offer meets these requirements.

What is included in the calculation

Not everyone realises which pay components are taken into account in the calculation. It is not solely your basic monthly salary. Consider also:

• Holiday allowance (8% of gross monthly salary)
• A fixed year-end bonus or thirteenth month (1/12 per year)
• Fixed shift or overtime supplements
• Variable bonuses or profit distributions, averaged over three years

By correctly including all of these components, the actual payment can turn out to be considerably higher than you might initially expect. Conversely, an undercalculation by the employer can easily go unnoticed if you are not familiar with the details.

Practical tips if you are dismissed

• Always check for yourself whether your employer's calculation is correct, including all fixed salary components.
• Have you received a settlement agreement? Have it reviewed before you sign; the transition payment is a statutory minimum within it, and negotiation is often possible.
• Ask whether a substitute arrangement applies under your collective labour agreement and whether it meets the statutory requirements.
• Have you been off sick for more than two years? Find out in good time about the consequences of the proposed legislation for the compensation scheme, both as an employee and as an employer.
• Keep all documents relating to your employment carefully: your employment contract, payslips, appraisals, and correspondence about your dismissal.

Why Employment Lawyer Eindhoven

The rules surrounding the transition payment change every year, and the details make all the difference. At Arbeidsjurist Eindhoven we know the Brabant labour market landscape and can help you quickly and personally, whether you are an employee or an employer. Are you unsure whether your payment has been calculated correctly, or would you like to know what the new rules mean for your situation? Please feel free to contact us with no obligation. We would be happy to look into it together with you.

Frequently asked questions

What is the maximum transition payment in 2026?

As of 1 January 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.

What is changing with regard to the compensation scheme for employers in 2026?

The government has submitted a legislative proposal to restrict the UWV compensation scheme for dismissal following long-term illness to small employers. Medium-sized and large employers would then no longer be able to apply for compensation. The intended start date is 1 July 2026, but the proposal still needs to be formally adopted.

Am I also entitled to a transition payment as an on-call worker in 2026?

Yes. Since 2020, entitlement to a transition payment accrues from the first working day, regardless of the type of contract. This applies to on-call workers and people on fixed-term contracts as well. The condition is that the employer must take the initiative to end the employment.

May a collective labour agreement deviate from the statutory transition payment?

A substitute arrangement may be agreed in a collective labour agreement, but as of 2026 this is only permitted in the case of dismissal on business economic grounds. The arrangement must be aimed at preventing or shortening unemployment, must include a reasonable financial payment, or a combination of both.

Which salary components are included when calculating the transition payment?

In addition to your basic salary, holiday pay, fixed year-end bonuses, shift or overtime allowances, and average variable bonuses all count. By including all these components correctly, the payment can turn out to be considerably higher than one based on the bare monthly salary alone.

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.