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Transition Payment and Notice Period

Published
Updated
ByJolande Geerts

Short answer

Transition payment and notice period are separate parts of a Dutch exit file. Transition payment is compensation that can become due when an employer ends the contract or does not renew a temporary contract. The notice period controls when employment legally ends. For 2026, Rijksoverheid states that the maximum statutory transition payment is €102,000 gross, or 1 gross annual salary if that is higher. So the safe rule is: calculate compensation and timing separately, then compare the final package against both.

Who this article is for

This page is for:

  • expats facing dismissal or non-renewal
  • employees reviewing a settlement agreement or exit package
  • workers who want to know whether notice still runs when severance is paid
  • readers trying to separate salary continuation, transition payment and final settlement items

Transition payment starts with the dismissal route

A lot of confusion comes from looking only at the final number. Start with the dismissal route first.

Ask:

  • is the employer ending the contract?
  • is the temporary contract simply not being renewed?
  • is there a VSO by mutual consent?
  • is the employment relationship ending during sickness or another protected situation?

Rijksoverheid explains that transition payment is part of the legal baseline when the employer ends the contract or does not continue a temporary contract. That means it is a rights question first and only later a negotiation question.

The current 2026 ceiling

Rijksoverheid states that in 2026 the statutory maximum transition payment is:

  • €102,000 gross, or
  • 1 gross annual salary if that annual salary is higher

That ceiling is important for high earners, but most employees still need to understand the underlying calculation logic:

  • monthly salary matters
  • the length of service matters
  • some salary components can matter
  • the legal route used to end employment matters

So even before you calculate the amount, you should know whether your file falls inside the transition-payment framework at all.

Notice period answers a different question

The notice period does not answer how much compensation is due. It answers when the employment ends.

Rijksoverheid’s notice-period guidance explains that the employer’s notice period depends on the length of service. For permanent employment, the baseline table is:

  • less than 5 years: 1 month
  • 5 to 10 years: 2 months
  • 10 to 15 years: 3 months
  • 15 years or more: 4 months

Special rules, contract clauses and collective agreements can affect the result, so do not treat the table as the only possible answer. But it is the standard reference point.

Why salary continuation and severance are often mixed up

A dismissal file may include:

  • salary during the notice period
  • a severance amount or negotiated payment
  • holiday balance settlement
  • bonus or commission settlement
  • final expense corrections

Those are not the same thing.

One of the most common mistakes is assuming that a large payment means the notice period must have been handled correctly. Another is assuming that because there is a formal end date, no transition payment is due. Both assumptions can be wrong.

What happens when UWV or court procedure time is involved

Dutch dismissal timing can become even more confusing when the employer first has to go through a procedure. Rijksoverheid notes that the duration of the dismissal procedure can affect the remaining notice period, but at least 1 month of notice must usually remain.

That means the calendar analysis has to look at:

  • which route was used
  • when the procedure started and ended
  • what service-length-based notice period applied
  • what end date is now legally correct

This matters not only for salary timing but also for related WW timing.

What about a VSO?

A settlement agreement can still include a negotiated payment and often borrows transition-payment language as a benchmark. But a VSO is not automatically the same as the statutory baseline.

So in a negotiated exit, compare three things:

  1. what the statutory baseline would probably have looked like
  2. what the VSO actually offers
  3. whether the end date still fits notice-period logic and WW safety

That comparison is where high-quality review happens.

Why expats should be careful with fixed-term contracts

Expats often work on temporary contracts or in internationally mobile roles. In those files, the most dangerous assumption is: “the contract is ending anyway, so no further analysis is needed.”

But even when non-renewal is expected, you still need to check:

  • whether transition payment is due
  • what the final day legally is
  • whether the end date affects WW
  • whether any residence-permit or sponsorship issue is triggered

That is why notice and transition compensation should be reviewed before the last month, not after.

What to do now

  1. Identify the legal route by which the contract is ending.
  2. Check whether transition payment is part of the statutory baseline.
  3. Separate compensation from timing on paper before you negotiate anything.
  4. Check the employer notice period against the length of service.
  5. If there is a VSO, compare the proposed package with the likely statutory baseline.
  6. If the file may lead into WW, review the end date again from the WW timeline.

Common mistakes

  • assuming a severance payment automatically proves the legal exit is correct
  • assuming the end date alone tells you whether transition payment is due
  • reviewing the amount before checking the legal dismissal route
  • forgetting that procedure time and notice time can interact
  • signing a settlement package before checking what the statutory baseline probably was

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