© © Author(s) (or their employer(s)) 2019. Re-use permitted under CC BY. Published by BMJ. Objectives The study aimed to investigate the relative and absolute risks of early exit from paid employment among older workers with a chronic disease, and to assess whether these risks differ across educational groups. Methods Data on chronic diseases and demographics from 9160 Dutch workers aged 45-64 years were enriched with monthly information on employment status from Statistics Netherlands. Subdistribution hazard ratios (SHR) and 7-year probabilities among workers with a chronic disease of exit from paid employment through disability benefits, unemployment benefits, early retirement benefits or economic inactivity were estimated using competing risks regression analyses based on Fine and Gray’s models. Results Workers with one chronic disease had a higher risk to exit paid employment through disability benefits (SHR 4.48 (95%CI 3.22 to 6.25)) compared with workers without chronic disease, and this risk further increased for multiple chronic diseases (SHR 8.91 (95%CI 6.33 to 12.55)). As occurrence of chronic diseases was highest among low educated workers, the 7-year probabilities to exit paid employment through disability benefits were highest among this group. Cardiovascular, musculoskeletal, psychological and respiratory diseases were associated with disability benefits (SHRs ranging from 2.11 (95%CI 1.45 to 3.07) to 3.26 (95%CI 2.08 to 5.12)), whereas psychological diseases were also related to unemployment (SHR 1.78 (95%CI 1.33 to 2.38)). Conclusions Older workers with a chronic disease have a higher risk to exit paid employment through disability benefits. As multimorbidity has an additive effect, addressing multimorbidity as a risk factor for sustainable employment is needed.