How Much Severance Pay Do You Get with a Settlement Agreement?
Being dismissed with a settlement agreement (VSO)? You’re probably wondering how many months of salary you’ll receive. Since 1 July 2015, Dutch law guarantees a minimum: the statutory transition compensation. This is the legal starting point, but in practice, there’s often room to negotiate more. This article explains what to look out for and how to secure the best possible deal.
Since 2015: statutory transition compensation
With the introduction of the Work and Security Act (WWZ) on 1 July 2015, employees in the Netherlands are entitled to a transition payment upon dismissal, as long as the termination is initiated by the employer. This legal compensation also applies when you agree to end your contract via a settlement agreement.
The transition payment is calculated as follows:
1/3 of your monthly salary per year of service
It applies from the very first working day
The salary used for calculation includes gross wages, holiday pay, bonuses, and fixed allowances
Example:
If you earn €3,000 gross per month and have worked for 6 years, your statutory transition compensation would be:
6 x 1/3 x €3,000 = €6,000 gross
But here's the catch: you can negotiate more
Although the transition compensation is the legal minimum, you and your employer are free to agree on a higher amount in a settlement agreement. The final severance pay often depends on:
1. How strong is your employer’s case?
Your employer must prove there’s a valid reason for dismissal, such as underperformance, reorganisation, or a disrupted working relationship. If this is not well documented, you have strong leverage to negotiate more. In weak cases, employment lawyers can often secure 3, 6 or even 12 months of salary as severance.
2. What are your risks?
Sometimes it’s in your best interest to agree to termination, for instance, if you’ve been off work for a long time, face immediate dismissal for cause, or if your employer has a solid file on your performance. Even then, you may still be able to negotiate a better deal above the statutory minimum.
3. What’s common in practice?
At Expatlawyer.nl, we often see employers start with only the statutory transition payment in their first offer. However, there’s usually room to negotiate based on the strength of their dismissal case. In addition, it’s common to arrange extras such as:
Payment of unused vacation days
Paid leave during the notice period
Reimbursement of legal fees
A positive reference
Outplacement support
Always have your VSO reviewed by a legal expert
A settlement agreement is legally binding. Signing without proper advice can cost you your right to unemployment benefits or leave you with too little compensation. That’s why it’s crucial to consult a lawyer who specialises in employment law. At Expatlawyer.nl, we check your agreement on 35 legal points for €500 and can help negotiate a better deal. We know what employers are willing to offer and aim to get you the best possible exit terms.
Send us your settlement agreement, we’ll review it and contact you.
This blog was written by Mr. Stijn Blom
Employment law attorney at expatlawyer.nl B.V. Stijn has extensive experience in employment law and supports entrepreneurs on a daily basis with a wide range of employment law issues. From dismissal cases to drafting watertight agreements and regulations – with his practical and personal approach, he helps employers and employees move forward. Want to know more? Visit Stijn’s page.
Expatlawyer.nl is happy to think along with you if you have questions about the topic of your VSO. Feel free to get in touch.
June 2025
