Transitievergoeding Calculation in Utrecht - Formula and Practical Examples
The transitievergoeding is a statutory compensation that employees receive upon termination of their employment contract. Since 2020, there is a streamlined method to calculate this compensation, also for employees in Utrecht.
When Entitled to a Transitievergoeding?
You are entitled to a transitievergoeding in the following situations:
- Your employer terminates the contract
- The subdistrict court dissolves the agreement at the employer's request
- A fixed-term contract is not extended due to the employer's actions
- You resign yourself due to the employer's seriously negligent conduct
- The contract ends after two years of illness with dismissal by the employer
No Entitlement to Transitievergoeding?
- You resign yourself without attributable conduct by the employer
- Dismissal due to your own serious misconduct
- You are under 18 and work on average no more than 12 hours per week
- You reach retirement age
- The employer goes bankrupt
- There is a comparable arrangement in the collective labour agreement
Calculation Formula
As of 1 January 2020, a uniform calculation applies:
This amounts to approximately one third of a month's salary per year worked.
Which Salary Components Are Included?
The following gross salary is taken into account for the calculation:
- Standard salary
- Fixed allowances (e.g. for shift work)
- Holiday allowance (at least 8%)
- Structural end-of-year payments
- Regular overtime compensations
- Average bonuses over the past three years
What Is Not Included?
- Expense allowances
- Company car
- Reimbursements for phone or internet
- One-off bonuses
- Employer's pension contributions
Practical Examples
Example 1: 5 Years of Service
Gross monthly salary: €3,000
Holiday pay: €240
Total: €3,240
Years of service: 5
Transitievergoeding: €3,240 ÷ 12 × 5 = €1,350
Example 2: 15 Years of Service with Extra Payment
Gross monthly salary: €4,000
Holiday pay: €320
13th month: €333.33
Total: €4,653.33
Years of service: 15
Transitievergoeding: €4,653.33 ÷ 12 × 15 = €5,816.67
Example 3: 8.5 Years of Service
Gross monthly salary: €2,500
Holiday pay: €200
Total: €2,700
Years of service: 8.5
Transitievergoeding: €2,700 ÷ 12 × 8.5 = €1,912.50
Maximum Amount Transitievergoeding
There is a statutory upper limit. For 2024:
- Maximum: €94,000 gross
- Or one year's salary if higher
This cap is adjusted annually.
Including Partial Months
A part of a month is included pro rata. For 5 years and 3 months of service, this counts as 5.25 years.
Transitievergoeding in Case of Long-Term Illness
Upon dismissal after two years of incapacity for work, you are entitled to compensation. Employers can apply for compensation from the UWV:
- Compensation scheme available since 1 April 2020
- Application by the employer to UWV
- Reimbursement of the paid compensation
Payment Deadline for Transitievergoeding
The employer must pay the compensation within one month after termination of the contract. In case of delay, statutory interest is due.
Additional Compensation via the Subdistrict Court
Upon dissolution by the subdistrict court, a fair compensation may be awarded in addition to the transitievergoeding if the employer has made serious errors.
Offsetting with Training Costs
The employer may deduct certain expenses from the compensation:
- Costs for outplacement or retraining
- Investments in broader labour market skills
Prior written consent of the employee is required for this.
Deviations in Collective Labour Agreement
A collective labour agreement may provide different rules for the transitievergoeding if:
- An equivalent arrangement exists
- This arrangement helps prevent or limit unemployment
Frequently Asked Questions
Transitievergoeding in Settlement Agreement?
This depends on the negotiations. Legally it is not mandatory, but often at least the transitievergoeding is included.
Relevant Institutions in Utrecht:
Court: District Court Midden-Nederland, Vrouwe Justitiaplein 1
Legal Aid Office: Juridisch Loket Utrecht, Catharijnesingel 55