OBJECTIVES: This study investigates the influence of onset of disease on exit from paid employment and whether this differs across diseases and sociodemographic groups. METHODS: Register data from Statistics Netherlands on medication prescription was linked to information on employment status and demographics. Persons who were employed in 2009 and 2010 and who did not use medication for the selected disease in 2009 (N=5 889 036) were followed-up over nine years. Six diseases were identified based on medication prescription in 2010 and 2011: cardiovascular diseases, inflammatory diseases, diabetes mellitus, respiratory diseases, common mental disorders, and psychotic disorders. Four pathways out of paid employment were defined: disability benefits, unemployment, no income, and early retirement. Early exit from paid employment was defined as exiting paid employment before retirement age. Cause-specific Cox proportional hazards regression analyses were performed, with interaction terms for age, sex, and migration background. RESULTS: Onset of disease increased the likelihood of exit from paid employment, with the strongest associations for psychotic disorders [hazard ratio (HR) 2.88, 95% confidence interval (CI) 2.78–2.98] and common mental disorders (HR 2.00, 95% CI 1.97–2.03). Onset of disease was most strongly associated with disability benefits, followed by unemployment. The influence of common mental and psychotic disorders on disability increased until around middle-age, after which it decreased. The influence of mental health problems on exit from paid employment was stronger for persons with a non-native Dutch background and males. CONCLUSION: Onset of diseases, especially mental health disorders, is a risk for exiting paid employment before the retirement age. Effective interventions are needed to enhance an inclusive workforce and prevent involuntary loss of paid employment.