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Losing your job in the Netherlands is stressful enough. When you're an expat navigating it in a foreign legal system, it can feel overwhelming. But here's the good news: Dutch employment law is strongly pro-employee, and you're likely entitled to a significant severance payment.
This guide covers everything you need to know about severance pay in the Netherlands in 2026: how it's calculated, how it's taxed, and what steps to take if you've just received a termination notice.
What Is Severance Pay in the Netherlands?
In Dutch law, severance pay is called the transitievergoeding (transition payment). It was introduced in 2015 as part of the Work and Security Act (Wet Werk en Zekerheid) and significantly reformed in 2020 under the Balanced Labour Market Act (WAB).
Since January 1, 2020, every employee in the Netherlands is entitled to severance pay from day one of employment. There is no minimum tenure required. This applies to all contract types:
- Permanent contracts (vast contract)
- Fixed-term contracts (tijdelijk contract)
- Zero-hour contracts (nul-urencontract)
- On-call contracts (oproepcontract)
Who Is Entitled to Severance Pay?
Not sure if you are entitled to severance pay?
Book a free 30-minute consultation — we review your situation and advise on your exact entitlements under Dutch employment law.
You are entitled to severance pay when your employer ends the employment relationship. Specifically:
You ARE entitled if:
- Your employer dismisses you through the UWV for business or economic reasons
- Your employer requests the court (kantonrechter) to dissolve your contract
- You agree to end the contract through a mutual termination agreement (vaststellingsovereenkomst, VSO)
- Your fixed-term contract expires and the employer chooses not to renew it
- You resign because of seriously culpable conduct by your employer
You are NOT entitled if:
- You resign voluntarily
- You are dismissed for seriously culpable conduct (ernstig verwijtbaar handelen)
- You are under 18 and worked 12 hours per week or less
- Your employer is bankrupt or in suspension of payment
- You reach the statutory retirement age (AOW-leeftijd)
How Is Severance Pay Calculated?
The formula is straightforward:
1/3 of your gross monthly salary × years of service
For partial years, the calculation is pro-rated. Your gross monthly salary includes: base wage, 8% holiday allowance (vakantiegeld), 13th month/year-end bonus, structural overtime, and fixed allowances.
Example: Earning €5,000/month + 8% holiday allowance, 6 years and 3 months of service:
1/3 × €5,033.33 × 6 = €10,066.66 (full years) + 3/12 × 1/3 × €5,033.33 = €419.44
Total: €10,486.10 gross
The transition payment is capped at €102,000 gross in 2026, or one full gross annual salary if higher. In cases of employer culpability, an additional billijke vergoeding (fair compensation) with no cap may be awarded.
Is Severance Pay Taxable in the Netherlands?
Yes. Severance pay is fully taxable as income. Your employer withholds wage tax (loonbelasting) before paying you, and the amount is added to your income for the year. The income averaging rule (middelingsregeling) was abolished on January 1, 2023 and is no longer available.
Tax reduction tip: You can ask your employer to use part of the severance amount to pay for qualifying training or retraining directly. That portion is not subject to wage tax. Must be arranged before payout.
Important for expats: The 30% ruling does not apply to severance pay. Your transition payment is taxed at the full Dutch income tax rate even if you benefit from the 30% ruling on regular salary. Wealth tax (Box 3) may apply if the payment remains in your account on January 1.
Most employment endings in the Netherlands happen through a vaststellingsovereenkomst (VSO) — a mutual termination agreement negotiated between you and your employer.
A well-drafted VSO typically covers:
- End date of employment (notice period)
- Severance amount (at least statutory, often negotiated higher)
- Non-compete/non-solicitation clause (often waived as part of the deal)
- Reference letter (getuigschrift)
- Outplacement budget (career coaching, training)
- Payment for unused vacation days
- Final clause (finale kwijting) releasing both parties
Your 14-day right to reconsider: After signing, Dutch law gives you 14 calendar days to change your mind (bedenktijd). If your employer fails to mention this right, the period extends to 21 days.
At Harmonia Consult, we regularly help expat clients negotiate severance amounts that are 2× higher than the initial offer.
Dutch Unemployment Benefit (WW-uitkering) After Dismissal
After losing your job, you may qualify for Dutch unemployment benefits (WW-uitkering) via the UWV.
Eligibility: Worked at least 26 weeks in the 36 weeks before unemployment.
Duration: 3 months basic + 1 month per year of work history (max 24 months).
Amount: First 2 months: 75% of daily wage; from month 3: 70% (both capped at maximum daily wage).
Important for expats: Receiving severance pay does not reduce or delay your WW benefit — they run independently. If you leave the Netherlands, WW can sometimes be exported to another EU/EEA country for up to 3–6 months.
What to Do When You Receive Termination Notice
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Need Legal Advice? Harmonia Consult Is Here to Help
Facing dismissal or negotiating a severance package in the Netherlands is challenging enough when you know the system. For expats, the combination of unfamiliar laws, language barriers, and cultural differences makes it even harder.
Harmonia Consult specializes in legal assistance for expats in the Netherlands. We speak your language, know Dutch employment law inside out, and have helped 150+ clients with a 98% success rate.
What we offer:
- Free 30-minute initial consultation
- VSO review and negotiation support
- Dismissal dispute assistance (UWV and court)
- Tax structuring advice for severance payments
- Full support in Polish, Dutch, and English
