Final settlement payment (eindafrekening) under Dutch law
When employment ends in the Netherlands - whether by resignation, dismissal, or expiry of a fixed-term contract - the employer must settle all outstanding financial obligations with the departing employee. This final settlement (eindafrekening) typically consists of: accrued but unpaid salary up to the last working day; accrued but untaken holiday leave (vakantiedagen), which must be paid out at the daily salary rate; and accrued but unpaid holiday allowance (vakantiegeld), calculated at 8% of gross salary for the accrual period not yet paid out.
In addition to these standard components, the eindafrekening may include: a pro-rated year-end bonus or 13th month payment, if provided for in the employment contract or applicable CAO; reimbursement of expense claims still outstanding; and any commissions or profit-sharing that has been earned but not yet paid. Where a settlement agreement is concluded, the VSO typically expressly provides that the eindafrekening will be settled and specifies the payment date.
Timing of the final settlement payment in the Netherlands
Dutch law does not set a single statutory deadline for the entire eindafrekening, but the general principle is that it must be paid promptly after the end of employment. Salary must be paid on the usual payroll date. Holiday allowance accrued but not yet paid is due immediately upon termination. Delayed payment entitles the employee to the statutory increase (wettelijke verhoging) of up to 50% under Article 7:625 of the Dutch Civil Code, plus statutory interest (wettelijke rente).
Disputes about the eindafrekening under Dutch law
Disputes about the eindafrekening are common, particularly regarding the valuation of accrued holidays and pro-rated bonuses. Where an employer withholds the eindafrekening or disputes the amount, the employee can institute proceedings before the kantonrechter or, in urgent cases, seek an interim injunction (kort geding) to compel payment. An employment lawyer can assist in calculating and recovering the correct eindafrekening amount.
Holiday allowance accrued but unpaid at the end of employment is a statutory entitlement under Article 15 of the Minimum Wage and Minimum Holiday Allowance Act (AMW); any delayed payment triggers the statutory increase (wettelijke verhoging) of up to 50% under Article 7:625 of the Dutch Civil Code, plus statutory interest. A pro-rata thirteenth month payment forms part of the eindafrekening where the employment contract or applicable CAO provides for it, and it is also included in the wage base for the transition payment calculation under the Transition Payment Decree. All claims under the eindafrekening become time-barred after five years under Article 3:308 of the Dutch Civil Code.
Holiday allowance accrued but unpaid at the end of employment is a statutory entitlement under Article 15 of the Minimum Wage and Minimum Holiday Allowance Act (AMW); any delayed payment triggers the statutory increase (wettelijke verhoging) of up to 50% under Article 7:625 of the Dutch Civil Code, plus statutory interest. A pro-rata thirteenth month payment forms part of the eindafrekening where the employment contract or applicable CAO provides for it, and it is also included in the wage base for the transition payment calculation under the Transition Payment Decree. All claims under the eindafrekening become time-barred after five years under Article 3:308 of the Dutch Civil Code.