Transition Payment 2026: What Changes For You This Year

Transition payment 2026: the most important changes

In 2026, there are changes to the amounts and rules surrounding the transition payment. Read below what is changing for you this year and how to respond to these changes.

In 2026, a number of new rules apply regarding the transition payment. The statutory maximum has increased, amendments to the compensation scheme are on the table, and the collective agreement (cao) arrangements concerning a substitute provision have also been amended. Whether you are facing dismissal or simply want to know where you stand, it is worth being familiar with the current rules.

The new maximum in 2026

The most concrete development this year is the increase in the statutory cap. As of 1 January 2026, the maximum transition payment is €102,000 gross. In 2025, that maximum was still €98,000. If you earn more than €102,000 per year, your gross annual salary applies as the maximum. This maximum amount is indexed annually on the basis of the development of contractual wages.

Nothing has changed regarding the calculation itself: you receive one third of your gross monthly salary for each full year worked. If you have worked part of a year, that portion is included on a pro-rata basis. When calculating the monthly salary, fixed pay components are also taken into account, such as holiday allowance and a structural year-end bonus. Expense allowances or incidental payments are not included.

Entitlement to the payment from day one

Since 1 January 2020, you are entitled to a transition payment from the very first working day, regardless of how long you have been employed. This applies to both permanent and fixed-term contracts, even if the dismissal falls within the probationary period. The condition is that the initiative to end the employment must come from the employer. If you resign of your own accord, this entitlement lapses in principle.

There are exceptions to the right to a transition payment. In the event of summary dismissal, you are in principle not entitled to the payment, unless the dismissal is later found to have been unjustified. Where the employee's own conduct is seriously culpable, the court may also cause the right to the payment to lapse. This is a high threshold: a mistake or underperformance generally does not fall within this category.

Compensation scheme for illness significantly curtailed

One of the biggest changes in 2026 concerns the compensation scheme for employers who dismiss a long-term sick employee. The government has submitted a legislative proposal to restrict this scheme to small employers. Medium-sized and large employers would then no longer be able to apply to the UWV for compensation for the transition payment made after two years of incapacity for work. The intended date of entry into force is 1 July 2026, although transitional law remains in effect for situations in which the two-year period had already elapsed before that date.

As an employee, this legislative proposal changes little regarding your rights: you simply retain your entitlement to the transition payment after two years of illness. The impact is primarily on employers, but it is worth knowing that this area is in flux — particularly if you yourself have been off sick for some time and the end of your employment is approaching.

Collective agreement (cao) arrangements and substitute provision

A collective labour agreement (CLA) may provide that an employee dismissed for economic reasons receives an alternative arrangement in lieu of the statutory transition payment. That arrangement no longer needs to be of equal value, but it must be aimed at preventing or limiting unemployment, include a reasonable financial payment, or offer a combination of both. If you work in a sector with a CLA, always check whether such an arrangement applies to your situation. For a complete picture, also read our page on the transition payment.

When your employer pays late or pays too little

Your employer is required to pay the transition payment no later than one month after the end of the employment contract. If payment is not made or the amount is incorrect, you are entitled to statutory interest and may, if necessary, bring the matter before the subdistrict court. Also pay close attention to the terms of any settlement agreement: the statutory transition payment is the absolute minimum, and negotiating a higher amount is possible in many cases.

Practical checklist for dismissal in 2026

• Check whether the amount calculated by your employer is correct: include holiday pay and fixed allowances in the monthly salary.
• Check whether your collective labour agreement provides for an alternative arrangement and whether it applies to your reason for dismissal.
• Have you received a settlement agreement? Always have it checked before you sign — you have 14 days to reconsider after signing.
• Do not wait too long: the statutory time limit for claiming the transition payment expires after three years.
• Have you been off sick for some time? Keep a close eye on the two-year period and make sure you are informed in good time about the changes to the compensation scheme from 1 July 2026.
• Be aware that the transition payment is taxed as income in box 1, on top of your regular salary for that year.

Why Employment Lawyer Eindhoven

The rules surrounding the 2026 transition payment are changing on several fronts. Whether you want to know if your calculation is correct, have doubts about a settlement agreement you have been offered, or simply want to understand your rights: at Arbeidsjurist Eindhoven we are ready to assist employees in Eindhoven and the rest of the Brabant region. We take a straightforward look at your situation and give you concrete advice without beating around the bush. Contact us without obligation — an initial consultation costs you nothing.

Frequently asked questions

What is the maximum transition payment in 2026?

In 2026 the maximum transition payment is €102,000 gross. If you earn more than €102,000 per year, your gross annual salary applies as the maximum. The amount is indexed annually on the basis of the development of contractual wages.

How is the transition payment calculated in 2026?

The calculation is unchanged: you receive one third of your gross monthly salary for each full year worked. Partial years are included on a pro-rata basis. The gross monthly salary also includes holiday pay and structural fixed allowances, but not expense allowances or incidental payments.

What is changing in 2026 for employees who are long-term sick?

A legislative proposal is pending that would limit the compensation scheme for employers to small employers, with an intended effective date of 1 July 2026. As an employee, nothing changes regarding your right to the transition payment after two years of illness. The transitional provisions protect employees whose two-year period had already elapsed before that date.

Am I also entitled to a transition payment under a fixed-term contract or dismissal during the probationary period?

Yes. Since 1 January 2020 you have been entitled to a transition payment from your very first working day, including when a fixed-term contract is not renewed or when dismissal takes place during the probationary period. The condition is that the initiative to end the employment must lie with the employer.

When must my employer pay the transition payment?

Your employer is obliged to pay the transition payment no later than one month after the end of the employment relationship. If payment is late or not made at all, you can claim statutory interest and, if necessary, bring proceedings before the subdistrict court.

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.