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Calculate Severance Pay in Netherlands — Your Rights

Dismissal is often a stressful event, but severance pay (transitievergoeding) can help with the financial transition to a new job. Many employees in the Netherlands, however, don't know exactly how much severance pay they can expect or how it's calculated under Dutch law. It's important to know what you're entitled to as an expat, so you can check whether your employer pays the correct compensation. In this article, we'll explain step by step how you can calculate your severance pay in the Netherlands.

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What's the situation?

Severance pay (transitievergoeding) is a payment that employers in the Netherlands must pay to employees upon dismissal, except in certain exceptional cases under Dutch law. This compensation is intended to financially support the transition to new work. Many employees are uncertain about the amount of their severance pay because the calculation depends on various factors. It happens that employers make errors in the calculation or employees wrongfully don't receive compensation. By knowing how the calculation works yourself, you can check whether you're getting what you're entitled to under Dutch employment law.

What does Dutch law say?

Severance pay is described in Article 7:673 of the Dutch Civil Code (Burgerlijk Wetboek). This compensation applies to all employment contracts ending after 1 July 2015 in the Netherlands, regardless of the reason for termination. The amount of compensation depends on your salary, the duration of your employment and your age. There are specific exceptions where no severance pay is owed, such as dismissal for urgent reasons by the employee or upon retirement.

1Article 7:673 BW (Dutch Civil Code): Employer owes severance pay upon termination of employment contract, unless Dutch law provides otherwise
2Article 7:673a BW (Dutch Civil Code): Calculation based on 1/3 monthly salary per year of service, with increased compensation for employees aged 50 and older
3Article 7:673c BW (Dutch Civil Code): Exceptions where no severance pay is owed, such as dismissal for urgent reasons or temporary contracts shorter than 2 years

What are your rights in the Netherlands?

As an employee in the Netherlands, you have the right to fair severance pay upon dismissal according to Dutch legal rules. It's important that you know what exactly you can expect under Dutch employment law.

1Right to 1/3 monthly salary per year of service: For each full year you've worked, you receive one-third of your monthly wage as severance pay under Dutch law
2Increased compensation from age 50: Are you 50 years or older? Then you receive 1/2 monthly salary per year of service from the moment you turned 50
3Calculation based on gross salary: Severance pay is calculated on your gross monthly salary, including fixed allowances such as holiday pay
4Payment within reasonable time: Your employer must pay the severance pay together with your final salary or shortly thereafter

What can you do now?

Follow these steps to calculate your severance pay and check whether your employer in the Netherlands pays the correct compensation under Dutch law.

1Step 1: Gather your employment data - note your start date, end date, gross monthly salary and your date of birth
2Step 2: Calculate the number of years of service and determine if you were 50 years or older at any point during your employment
3Step 3: Use the formula (1/3 x monthly salary x number of years) and possibly the increased calculation for the period from your 50th birthday
4Step 4: Compare your calculation with what your employer paid out and contact them if there are differences

Sample letter or template

Doesn't the payout of your severance pay match your calculation? MijnRecht.AI can help you draft a professional letter to your employer in the Netherlands to claim the correct severance pay under Dutch law. Our AI tool ensures that all relevant information and Dutch legal provisions are correctly included in your letter.

Where can you get help in the Netherlands?

If you have problems with your severance pay in the Netherlands, you can seek help from various institutions. The Legal Counter (Juridisch Loket) offers free legal advice about Dutch employment law. If your employer refuses to pay the correct compensation, you can file a case with the district court (kantonrechter). Trade unions can also support their members with disputes about severance pay under Dutch law.

Conclusion

Calculating your severance pay doesn't have to be complicated when you have the right information about Dutch employment law. By doing the calculation yourself, you know exactly what you're entitled to as an expat in the Netherlands and can check whether your employer acts correctly. Do you doubt the payout or have questions about your specific situation? Then have your situation analysed for personal advice.

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