When you are dismissed, you are entitled to a transition payment. This is the severance pay you are legally entitled to if you are dismissed or if your employment contract is not renewed.
Am I entitled to a transition payment?
The termination of your employment contract at the initiative of your employer entitles you to a financial compensation. This financial compensation is called the transition payment. The duration of your employment does not matter. Even if you have only worked for a few days, you are entitled to a transition payment. The transition payment is intended to make the transition to a new employer easier.
Even if you are partially (for more than 20%) dismissed, you are entitled to a transition payment. Also, if you are dismissed after two years of illness, you are entitled to a transition payment. If you resign yourself or are dismissed on the spot, you are not entitled to a transition payment.
What is the amount of the transition payment?
The amount of the transition payment depends on two factors: the duration of your employment and your gross monthly salary. For each year of service, you are entitled to a compensation equal to 1/3 of your gross monthly salary. As of 1 January 2026, the transition payment is capped at €102,000. Is your annual salary higher? Then you will receive a maximum of that gross annual salary.
Example calculation:
Suppose you have worked for your employer for 11 years and three months at the time your employment contract is terminated at the employer's initiative. You earn a gross salary of €1,875 per month at that time, plus 8% holiday pay and an 8.33% year-end bonus. You are then entitled to the following transition compensation:
11 years = €2,181.19 x 1/3 = €7,997.70
3 months = €2,181.19 x 1/3 x 1/12 = €181.77
Transition compensation €7,997.70 + €181.77 =
€8,179.46
This method of calculation applies to all employment contracts that ended after 1 January 2020. If your employment contract ended earlier, you cannot apply the above calculation.
What if your employer has not paid the transition compensation or has not paid it in full?
Is your employer not paying the transition compensation? Then request your employer in writing to correctly pay you the transition compensation. In that message, be sure to state that you are entitled to a transition compensation and that your employer must pay this compensation within two weeks. Send this message via e-e-mail, regular post, and/or registered post to your employer and keep a copy of the letter and the proof of dispatch.
The law states that you must claim the transition compensation within three months after the termination of your employment contract. Within three months, your case must be with the subdistrict court. If you do not do this or are too late, you can no longer claim the transition compensation. So make sure you raise the issue on time and request your employer in writing to pay the transition compensation correctly.
If payment is delayed or you have doubts about the amount of the transition compensation, please contact us.