The transition compensation 2026 is for many employees the most important financial safety net in the event of dismissal. Yet it is often unclear when you are entitled to it, how the compensation is calculated, what counts as salary and what exceptions there are. In practice, we also see that employers regularly make mistakes in the calculation or payment. That can cost you (a lot of) money.

In this comprehensive guide we explain in plain language how the transition compensation in 2026 works. You will read when you are entitled to a transition compensation, how the calculation is done, what you can do in the case of a settlement agreement (VSO) and when it is wise to seek legal assistance.

Would you like immediate advice about your dismissal situation? Then see our page about employment law or our approach to dismissal cases.

What is a transition payment?

The transition payment is a statutory severance payment. It is not a ‘bonus’, but a right conferred by law. The payment is intended to:

• soften the financial blow of dismissal (income bridging);
• make the step to other work easier (for example through training);
• encourage employers to handle dismissals carefully.

When are you entitled to a transition payment in 2026?

In most cases you are entitled to a transition payment if the initiative to terminate lies with your employer. For example:

• Dismissal by the employer (termination after UWV approval or with the employee’s consent);
• Termination by the subdistrict court judge (for example, in case of a disrupted employment relationship or underperformance);
• Not extending a temporary contract (if the employer chooses not to extend).

Right from the first working day

Important: the transition compensation 2026 applies from the first working day. So you can also be entitled to transition compensation in case of dismissal during the probationary period or after a very short employment. That amount is often small, but the entitlement still exists.

When do you have no right to transition compensation?

There are exceptions. The main situations in which (usually) there is no right to transition compensation:

1) Summary dismissal

In the case of a lawful summary dismissal there is in principle no right to transition compensation. Note: if the summary dismissal later turns out to be unjustified (for example, because there was no urgent reason or the employer acted too late), the outcome may still be different. Also read: summary dismissal.

2) Seriously culpable conduct

In the event of seriously culpable conduct by the employee, the right to the transition payment may lapse. This is a high threshold. A normal mistake, a conflict or “underperformance” is not automatically seriously culpable.

3) State pension age reached

If the employment contract ends because you have reached the state pension age, there is in principle no entitlement to a transition payment.

4) Employer bankruptcy

In the event of bankruptcy, the right to a transition payment lapses in many cases. This is harsh, but it is how the scheme generally works.

How is the 2026 transition payment calculated?

The calculation of the transition compensation in 2026 revolves around two points:

• your gross monthly salary (including certain fixed wage components);
• the length of your employment.

The main rule is:

• For each full year of service: 1/3 of gross monthly salary
• For a part of a year of service: a proportionate part

Practical calculation example

Suppose: you earn € 3.000 gross per month and you have been employed for 6 years and 4 months.

• 6 full years: 6 × (1/3 × € 3.000) = 6 × € 1.000 = € 6.000
• + a portion for 4 months (pro rata) = extra amount

In many cases the “difference” lies precisely in the question: what exactly is the gross monthly salary that counts? That’s where it most often goes wrong.

What counts as gross monthly salary?

For the transition compensation 2026 usually more than just your base salary counts. Depending on your situation, the following may count, among others:

• Base salary (fixed pay);
• Holiday allowance (usually 8%);
• Fixed allowances (for example shift allowance);
• Regular overtime (if it really is a fixed pattern);
• Bonuses/commissions (often averaged over a reference period);
• Fixed year-end bonus (pro rata).

What usually does not count are pure expense reimbursements (such as travel expenses) and incidental payments without a structural character.

Maximum transition payment 2026

The transition payment has a statutory maximum that is determined annually. If your gross annual salary is higher than the statutory maximum, the maximum is often: one gross annual salary.

The government publishes the (annually adjusted) current maxima at: Rijksoverheid – transition payment.

Transition payment during illness: does anything change?

Many people think that illness affects the transition payment. In most situations, the following applies: illness does not reduce your transition compensation. The calculation is based on the salary you earned before the illness. Even in the case of dismissal after long-term illness, can the transition compensation 2026 therefore still be owed.

Read more about dismissal and illness? See: dismissal during illness.

Transition compensation 2026 and settlement agreement (VSO)

With dismissal by mutual consent, you often enter into a settlement agreement (VSO). Important: in a VSO, the employer is not “automatically” obliged to pay exactly the statutory transition compensation. In practice, the transition compensation often serves as the starting point (and lower limit) for negotiations.

When is a higher compensation often achievable?

A higher compensation than the statutory transition compensation is regularly negotiable, for example if:

• the employer wants to end the employment quickly and does not want proceedings;
• the employer’s file is weak (for example insufficient performance improvement plan in case of underperformance);
• you “give up” a longer notice period/salary continuation in exchange for more money;
• there is discussion about culpability or reintegration.

Read also: settlement agreement.

May an employer deduct costs from the transition payment?

Sometimes an employer tries to set off costs (such as training or outplacement) against the transition payment. That is only allowed under strict conditions, for example if:

• the costs have been clearly discussed in advance;
• the purpose is: increasing employability (within or outside the company);
• the agreements are carefully documented.

In practice this often goes wrong. So always have this checked before you agree.

When must the transition payment be paid?

The transition payment should generally be paid within a short time after the end of the employment. If payment is late, that can have consequences (such as interest or other claims). Do not wait too long if you notice that payment is not forthcoming.

For general information about wage tax and payment, you can contact: Dutch Tax and Customs Administration.

Common mistakes regarding the transition allowance 2026

In our practice, we mostly see these mistakes:

• the incorrect determination of the gross monthly salary (allowances/bonus not included);
• incorrect length of service (e.g., successive employment not counted);
• incorrectly stating that there is no entitlement for short employment contracts;
• unjustified deduction of costs;
• late payment or payment “under protest” without clear justification.

Checklist: what do you do immediately after dismissal?

• 📌 Ask in writing: what is the reason for the dismissal and which route does the employer choose?
• 📌 Check whether you have been offered a settlement agreement and never sign immediately.
• 📌 Collect payslips and contracts (for the correct calculation of the statutory severance pay).
• 📌 Have the transition compensation 2026 calculated (especially with variable pay).
• 📌 Check whether negotiations are possible (higher compensation, release from work, reference, bonus arrangements).

Frequently asked questions about transition compensation 2026

Am I entitled to transition compensation with a temporary contract?

Often yes, if the employer decides not to extend. The transition compensation 2026 can also apply to temporary contracts apply.

Am I entitled to a transition payment if I resign?

Usually not, because the initiative then lies with you. There are exceptions, but they depend on the situation.

What if my employer says that I am “seriously culpable”?

That is often said too easily. The bar is high. Always have this legally reviewed, especially if the employer therefore does not want to pay a transition payment.

Is the transition payment net or gross?

The transition payment is in principle a gross amount. Payroll tax is withheld from it. That means you receive less net.

Can I receive more than the statutory transition payment?

Yes, especially with a settlement agreement, negotiation is often possible. The statutory transition payment is usually the starting point.

What if the transition payment is paid late?

You may then be entitled to interest or other remedies. Have this assessed promptly.

Need help with your 2026 transition payment?

Are you unsure about the amount of your compensation, have you been told you have no entitlement, or is there a settlement agreement ready to sign? Always have your situation checked. A small error in pay components or length of service can quickly make a difference of hundreds or thousands of euros.

The employment law attorneys at Arslan Attorneys are happy to help you with checking, enforcing, or improving your 2026 transition payment. See our approach: Employment Law – Arslan Advocaten or contact us via the contact form on our website.

For more general information about employee rights upon dismissal, you can also consult: UWV.