The Insider's Guide to Hiring in the Netherlands

Netherlands Employee Resignation

Notice

Form

Resignation should be submitted in writing.

Notice period

The statutory minimum is one calendar month, unless the contract or CAO (collective labour agreement)sets a different period.

Payment in lieu of notice or notice waiver

Both parties can agree to shorten the notice period or compensate instead. If they don’t agree, the employee must work the full notice period to maintain rights such as unemployment eligibility.

End-of-Service Benefits

Severance/Gratuity

• Employees who resign voluntarily do not receive the statutory transition payment unless the resignation is triggered by serious employer misconduct.

• The transition payment normally applies only when the employer ends the contract or decides not to renew a fixed-term contract.

Other Benefits

• Payment for unused vacation days

• Pro-rated holiday allowance (usually 8% of annual salary)

• Pro-rated bonuses or incentives, if applicable

• Outstanding reimbursements, such as travel or expenses

Termination Documentation

• Employee’s resignation letter with a clear end date

• Final pay slip and settlement overview

• A certificate of employment (werkgeversverklaring), if the employee requests it

Employer Termination With Cause in the Netherlands

Acceptable grounds

Employers may terminate an employee with cause under two categories:

• Urgent Cause (Summary Dismissal):

  • The employer can dismiss immediately if the employee commits a serious violation, such as:

    • Theft or fraud

    • Physical violence or threats

    • Serious insubordination

    • Other misconduct that makes continued employment unreasonable

• Reasonable Grounds (Dismissal with Notice):

  • Notice-based termination applies in cases such as:

    • Persistent underperformance

    • Frequent absenteeism (not chronic illness)

    • Culpable behavior

    • Irreparable breakdown in working relationship

    • Economic redundancy (not allowed under the EOR model)

    • Conscientious objection

Notice

Form

The employer issues a written termination notice. For summary dismissal, the employer must explain the reason immediately and confirm it in writing.

Notice period

• For summary dismissal, no notice is required as the termination is immediate.

• For dismissals with notice, statutory periods apply based on service:

  • One month: less than five years of service

  • Two months: Five to 10 years

  • Three months: 10 –15 years

  • Four months: more than 15 years

• A longer or shorter notice period may be included in the contract or collective agreement (subject to legal minimums).

Payment in lieu of notice or notice waiver

• For notice-based termination, the employer and employee can agree to payment instead of working the notice period.

• For urgent cause, no notice and no payment in lieu applies because the dismissal is immediate.

End-of-Service Benefits

Transition Payment

• In most cases of employer-initiated dismissal, the employee is entitled to a transition payment. The amount is generally calculated as:

  • 1/3 of one month’s salary per year of service, prorated for partial years

  • Capped annually and adjusted for inflation.

• If the dismissal is due to urgent cause (serious misconduct), the employer is not obligated to pay the transition allowance.

Other Benefits

• Unused vacation days

• Any unpaid holiday allowance (usually 8% of annual salary) must be paid out on a pro-rata basis.

• Bonuses/Incentives: Contractual or policy-based bonuses may be owed pro rata, depending on the company’s internal regulations or the employment agreement.

• Expense Reimbursements: Any outstanding travel or business reimbursements must be settled according to the employer’s policies.

Termination Documentation

• The employer must provide a written termination notice, especially in cases of summary dismissal, stating the reason for dismissal clearly and promptly.

• On termination, the employee should receive:

  • Final payslip and settlement statement

  • Certificate of employment (if requested)

  • Overview of accrued rights and final payment breakdown

Employer Termination Without Cause in the Netherlands

Acceptable Grounds

Under Section 7:669(3) of the Civil Code, acceptable or “reasonable” grounds for dismissal include:

• Business economic reasons

• Long‑term incapacity for work (illness over two years)

• Frequent absenteeism due to illness

• Poor performance or dysfunction

• Acts or omissions for which the employee is culpable

• Serious conscientious objection by employee

• Disrupted working relationship

• Other non‑listed circumstances, if they make it unreasonable to expect continuation

Before dismissing an employee, the employer must first try to reassign them to another suitable role, including offering training if needed.

Form

Notice must be in writing.

Notice period

less than one year service: 15 days

• Less than 5 years of service: 1 calendar month

• 5 – 10 years of service: 2 months

• 10 – 15 years of service: 3 months

• 15 years or more service: 4 months

Payment in lieu of notice or notice waiver

Employers aren’t automatically required to pay in lieu of notice or waive notice; both parties must agree to any changes. If the employer ends the contract early, they typically need to pay the employee the wages they would have earned during the full notice period.

End-of-Service Benefits

Severance

Transition Payment (Transitievergoeding) is a statutory payment due when the employer dismisses an employee. The amount is:

• 1/3 of the gross monthly salary for each full year of service, plus pro rata for part years.

• There’s a maximum cap on the transition payment. In 2025, the cap is €98,000 gross unless the employee’s annual salary is higher, in which case the payment is capped at one year of gross salary.

• Employers may pay the amount as a lump sum or spread it over a period of up to six months if needed. Interest may apply to any portion that remains unpaid after the contract ends.

Other Benefits

• Payout of unused leave (holiday days) and accrued benefits.

• Any bonuses, fixed allowances, commission, etc., per contractual or CAO obligations.

• Pension entitlements, if applicable under the company’s pension scheme. (Depends on pension rules.)

Mutual Termination Agreements in the Netherlands

Notice

Form

The termination must be documented in a written settlement agreement. The agreement should clearly state that the contract is ending by mutual consent, along with the reason and any agreed terms.

Notice period

• There’s no statutory notice period for mutual terminations. However, the notice period in the employment contract or collective agreement usually guides how the end date is set.

• Both parties can agree on the final termination date in the settlement agreement.

Waiver of notice

• The parties can agree to waive notice period, or shorten/extend it.

• If the agreement has the employee finishing earlier than the contractual notice period, the employer may pay compensation equivalent to what the notice period would have required.

End-of-Service Benefits

Severance

• Transition payment (“transitievergoeding”) generally applies if the employer proposes termination, even with a mutual agreement, unless an exception applies.

• The settlement agreement often includes a severance payment which may be equal to the transition payment or may be negotiated higher.

Other Benefits

• Final settlement of outstanding entitlements: unpaid salary, accrued holiday or vacation pay, bonuses, allowances.

• Arrangements on other contractual rights: non‑competition clauses, non‑solicitation, return of company property, confidentiality, references.

Offboarding Process for the End of Fixed-term Contracts in the Netherlands

If the Fixed-Term Contract Ends Normally

Notice

• If the fixed-term contract lasts six months or more, the employer must notify the employee in writing at least one month before the contract ends to confirm whether the contract will be renewed or not. This is called the “aanzegplicht” (notification obligation).

• Failure to provide timely notice may result in the employer owing the employee up to one month’s salary as compensation, depending on how late the notice is given.

• This obligation does not apply to contracts shorter than six months, nor to temporary replacement contracts with no fixed end date.

End-of-Service Benefits

Severance/Gratuity

• The employee is entitled to the statutory transition payment (transitievergoeding) if the employer does not renew the contract, and the contract ends at the employer’s initiative. This applies even from the first day of employment.

• The transition payment equals 1/3 of the gross monthly salary per year of service, calculated pro-rata. There is an annual maximum cap on this amount, adjusted each year.

Other Benefits

• Payment for unused statutory vacation days (holiday entitlement).
• Final salary payment including any accrued variable pay, such as bonuses or allowances, if agreed in the contract or collective agreement.
• Any pension contributions, if applicable, are handled according to the pension plan rules.
• Contractual non-compete or confidentiality clauses may continue after the end of the contract, depending on what is agreed.

If the Employer Terminates Early

Notice

• A fixed-term contract can only be terminated early if it includes a written interim termination clause (tussentijdse opzegmogelijkheid).
• Without this clause, early termination is not legally valid unless done with mutual consent or through court intervention.
• If the clause exists, statutory notice periods must be observed. These are based on the length of the employment and outlined in the Dutch Civil Code.
• If the employer terminates early without a valid clause, the employee may claim damages, typically equal to the salary for the remainder of the contract duration.

End-of-Service Benefits

Severance/Gratuity

• If the termination is valid (with a clause and proper notice), the employee is entitled to the transition payment, calculated from day one of employment.
• If the employer breaches the rules (e.g. no clause, insufficient notice), the employee can seek compensation or damages beyond the transition payment, including unpaid wages for the remaining period.

Other Benefits

• Unused vacation days must be paid out.
• Any non-material damages (reputation, legal costs, etc.) are not automatically paid, but may be claimed in court under special circumstances.

Final Payment Timing & Immigration and Visa Compliance in the Netherlands

Final Payment Deadline

All outstanding payments (salary, holiday allowance, unused leave) must be made at the latest on the next regular payday after the contract ends.

Penalty

If the employer delays payment, the employee may be entitled to statutory interest, and in some cases, additional compensation for late payment or legal damages if terms are breached.

Visa and Immigration Compliance

• Non-EU/EEA Employees: If the employee holds a work or residence permit, their residency rights may end when the employment ends.
• The employer must inform the IND (Immigration and Naturalisation Service) of the end of employment.