Imagine a small technical company with one employee who remembers every difficult installation from the past fifteen years. She knows which supplier answers after five, which machine makes an unusual noise before failing, and which client needs reassurance before discussing price.
She is approaching 67. Everyone would like her to stay two days a week.
That wish is understandable. CBS recorded 378,000 vacancies at the end of the first quarter of 2026, or 91 vacancies for every 100 unemployed people. Care, trade, and business services held the largest concentrations.
For an employer, however, an AOW date is more than a birthday and a retention conversation. It changes the contract, sickness, and payroll position. The company needs to decide what it is retaining, for how long, and who will carry the work afterwards.
The Dutch AOW age is 67 in 2026 and 2027. It rises to 67 years and three months in 2028. That date deserves attention well before the cake arrives.
Retaining a person, not postponing a decision
The commercial case for continued work can be strong. An experienced employee may hold customer trust, technical judgment, or knowledge that has never reached a manual. In a small business, that knowledge often sits in one person's head and appears only when something goes wrong.
Labour scarcity does not turn every continuation into a good arrangement. Post-AOW work is a workforce-design choice. The employer needs to decide whether it needs production capacity, customer continuity, mentoring, technical support, or a defined handover.
That distinction improves the arrangement. Two days a week to train a successor is a clear role. General availability because nobody else understands the work creates dependency. One arrangement transfers knowledge. The other delays a weakness the business will eventually have to face.
Employment does not necessarily end automatically at AOW age. Contract wording and any applicable collective agreement matter. If the existing contract ends and both sides want to continue, the new agreement should describe the work that will actually be done.
Hours, pay, duration, reporting lines, and handover expectations remain important. Warm intentions do not settle them.
A different employment framework
After AOW age, an employer may offer up to six consecutive fixed-term contracts over a maximum of four years. The employee remains entitled to at least the statutory minimum wage and holiday allowance.
This remains paid employment with a defined framework. It is not informal help from a former colleague who still knows where everything is.
The sickness position also changes. During sickness, the employer must continue wages for up to six weeks. Dismissal protection applies during those six weeks. The employee is no longer insured for unemployment or incapacity for work through this employment, so no WW or WIA entitlement arises from it. The employee does remain insured for the Ziektewet, although no ZW premium is payable.
For a small employer, these distinctions shape cost, risk, and communication. They should lead to better preparation, not casual treatment of the employment relationship.
The question is not only whether the employee can stay. It is whether the company can explain the role, carry the work, and end the arrangement properly when the time comes.
Payroll changes inside the pay period
The Belastingdienst treats reaching AOW age as a special payroll event. Insurance indicators and premium liability change. The timing of wages and the pay period can also affect the payroll treatment.
An AOW birthday in the middle of a monthly pay period needs more than a routine personnel-data update. Ordinary wages, holiday pay, or a bonus can fall around the relevant date. Payroll needs the right information before the wage run closes.
This is where a pleasant retention conversation can become a correction run. The employer, accountant, and payroll provider need the same facts at the right time. Waiting until the employee notices a different net amount creates unnecessary administration and an awkward explanation.
Good preparation is simple in principle. Record the AOW date, confirm whether the contract continues or ends, check intended wage dates, and ensure payroll settings match the employee's position.
In practice, those details often sit in different places: an old contract, an email, the payroll system, and the founder's memory. That is a poor control environment for a date with direct payroll consequences.
Net pay is not the whole financial picture
Income from continued work does not reduce the employee's AOW benefit or accrued pension. It can affect the final income-tax position and income-dependent benefits.
The employer sees the wage calculation, not the employee's complete income picture. AOW, pension income, other work, household circumstances, and benefits may all sit outside the payroll file.
Payroll-tax credit can make that boundary visible later. Where an employee receives AOW or other income alongside wages, payroll withholding may not cover the final tax position for the year. An amount may then become due after the annual tax return.
The employer's role is clear. Payroll should reflect the employee's recorded choice and the applicable rules. The employer can explain that net pay on the payslip is a wage calculation, not a complete view of personal tax or household income.
For the employee in our technical company, this may feel unexpectedly formal. She thought the question was whether she wanted to work Tuesdays and Thursdays. Now there are questions about tax credit, sickness, contract duration, and pension income.
A good employer keeps that conversation human. Clarity is not coldness.
Build the handover into the arrangement
There is also an exit issue. No statutory transition payment is due where dismissal occurs because the employee has reached AOW age or another applicable pension age. A later termination of post-AOW employment needs its own proper contractual and factual basis.
That makes the original contract and any new agreement especially important. A sensible review brings together the AOW date, pension-age clause, collective agreement, intended role, and payroll setup.
Start that review 12 to 18 months before the AOW date. The company then has time to ask what the employee wants, identify the knowledge it needs, check the contractual basis, and prepare payroll. More importantly, it has time to train someone else.
The experienced technician may remain the person who knows the difficult customer, the unreliable machine, and the supplier who answers after five. The company should use those extra Tuesdays and Thursdays to make that knowledge less personal and more durable.
Continued work should strengthen the company, not make one person impossible to release.
The best post-AOW arrangement is neither sentimental nor cold. It respects experience and gives the business clarity. The conversation can remain warm. The role, wage, and ending should be precise.
Need help aligning the contract, payroll file, and handover plan before an employee reaches AOW age?
The data, sourcing, and analysis behind this article were conducted by Linda Pavan. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Linda Pavan before publication.
