In 2026 the Dutch statutory severance pay, the transitievergoeding, is one third of your gross monthly salary for every year of service, with remaining months counted pro rata. It is capped at €102,000 gross, or one gross annual salary if that is higher, and you are entitled to it from your first working day.
What you keep is a different number, because the payment is taxed as income in the year you receive it. This article covers the formula, when you get nothing and one example from gross to net.
How do you calculate the transitievergoeding in 2026?
You calculate the transitievergoeding by taking one third of your gross monthly salary for each full year of service. For the remaining months the formula works pro rata, so each extra month adds one thirty-sixth of a monthly salary. Monthly salary means more than base pay, because holiday allowance, one twelfth of a fixed year-end payment, shift and overtime allowances and bonuses all count.
From 1 January 2026 the cap is €102,000 gross, or one gross annual salary if that is higher. Your employer may deduct the cost of outplacement or retraining aimed at another job, provided you gave your written consent in advance. You can agree to spread payment over at most six months, but interest is then due on the unpaid part from one month after the contract ends.
When are you not entitled to severance pay?
You are entitled when your employer dismisses you or does not renew a temporary contract, except in these main cases from Rijksoverheid:
- you resign or refuse an extension of your temporary contract, unless your employer acted seriously culpably;
- you are dismissed for your own seriously culpable conduct, such as theft;
- you are under 18 and worked on average no more than 12 hours a week;
- you reach the state pension (AOW) age or another retirement age;
- your employer is bankrupt, in suspension of payments or in debt restructuring.
In practice the most common exception is a settlement agreement (vaststellingsovereenkomst). If you end the contract by mutual consent, no statutory payment is owed and your severance is whatever you negotiate. You can withdraw within 14 days of signing, and the proposal should clearly come from your employer to protect your right to unemployment benefit (WW).
What do you keep net after tax?
Your employer pays the transitievergoeding as a lump sum and withholds wage tax at the special rate (bijzonder tarief), which depends on your annual wage. That withholding is only an advance, because the payment counts as box 1 income for that year and your tax return settles the difference. In 2026 box 1 is taxed at 35.75% up to €38,883, 37.56% up to €78,426 and 49.50% above that, for people below state pension age.
For tax purposes severance is income from a former employment (loon uit vroegere dienstbetrekking), so it does not count towards the employment tax credit (arbeidskorting). It does reduce the general tax credit (algemene heffingskorting), which in 2026 shrinks by 6.398% of every euro of income between €29,736 and €78,426.
A worked example
Suppose your base salary is €3,750 a month plus 8% holiday allowance, which gives a monthly salary of €4,050. Your contract ends on 30 November 2026 after 7 years and 4 months. Seven full years give €9,450 (7 × €1,350) and four remaining months €450 (4 × €112.50), so your gross transitievergoeding is €9,900. With eleven months of salary your 2026 box 1 income is already €44,550, so the whole payment falls in the 37.56% bracket (€3,718) and also costs you €633 of general tax credit. That leaves roughly €5,548 net, or 56% of the gross amount, assuming no other 2026 income such as WW benefit or a new salary.
How Gylder fits in
Gylder (gylder.nl) is a net worth tracker, not a budgeting app. It reads your bank balances through PSD2 and shows them beside your investments in a daily snapshot. When severance lands as one large credit, you see what it does to your net worth and how quickly that buffer shrinks. Our article on severance pay as bridge capital then turns the net amount into years without work.
What this doesn't tell you
The example ignores your partner, allowances (toeslagen), deductions such as mortgage interest and WW benefit, which all change the outcome. Whatever is left on 1 January also counts towards your box 3 assets. A cao, a social plan or a court award can give you more than the statutory amount, so ask an employment lawyer before you sign a settlement agreement. This article is general information, not financial advice.
Frequently asked questions
Does the transitievergoeding reduce my WW benefit? No, UWV lists severance pay as income you do not need to report while you receive WW, so it is not offset against your benefit.
Can I put my Dutch severance pay into a stamrecht BV to defer tax? Not for new dismissals. The stamrecht exemption (stamrechtvrijstelling) was abolished on 1 January 2014, so severance pay is now taxed as income in the year it is paid.
Is severance pay taxed at a higher rate than salary in the Netherlands? No, it is ordinary box 1 income taxed at the same 2026 rates as salary. The special rate your employer withholds is an advance that your tax return settles.