Overview: Minimum Wage In Netherlands
Wages in the Netherlands may be perplexing for internationals, especially how they are calculated and how much tax is withheld. Newcomers to the Netherlands are typically confused with how wages are organized. If you’ve never worked in an EU nation, the reasoning behind minimum wage in Netherlands and social levies deducted from your pay is likely as strange to you as the Dutch hagelslag (Confectionary sprinkles)
Employers in the Netherlands must pay at least the statutory minimum salary and the statutory minimum holiday allowance to their employees. The youth minimum wage in Netherlands (in Dutch) applies to employees aged 15 to 20. When it comes to the Netherlands, it’s not everyone’s cup of tea to grasp the way your income is determined, the methods of paying tax, and how to interpret your pay slip when entering the fields of new beginnings.
You can also question if you’re being paid fairly. Here are some essentials on wage taxes and minimum wages, as well as the pay you could expect (depending on your experience and trade) or even what the Netherlands minimum wage is:
Net income vs. Gross salary
It’s vital to recognize the distinction between gross and net income. The distinction between gross and net is very much universal and the Netherlands follows the same, and when discussing payment, the Netherlands frequently refers to the gross amount.
- Gross salary (bruto salaris): Your gross salary is the overall value of your earnings before taxes as well as other expenses are subtracted (bruto salaris). Holiday allowance in the Netherlands is an 8 percent gross portion of your entire gross wage. Check with your company to see if the holiday allowance is included or not in your gross compensation on your paystub.
- Net Salary (netto salaris): Net salary (netto salaris) is the sum you make following income tax, social security benefits, and pension payments have been subtracted. Bonuses, an 8% holiday allowance, and other perks, such as a 30% ruling tax for highly skilled migrants, are all included in the remuneration.
The net minimum wage in Netherlands is calculated as follows:
Your employer might withhold taxes and social security contributions from your gross wage. How much is withheld will determine the net amount you get. This varies from one person to the other and the law makes no provision for net sums.
How to figure out your net Dutch salary
For instance, assuming your gross monthly income is 3,500 euros (41.92 euros each year with an 8% vacation grant), following taxes plus social security payments, you will take home around 0.800 euros net each month. To determine your net monthly income, use a salary calculator.
The Netherlands' average income
The Central Plan Bureau (CPB) says that a worker working in the Netherlands would earn 2.894 euros gross per month in 2022. Salary might differ significantly from the median wage due to factors such as age, industry, professional experience, and hours worked. In the tables below, we look at a few of these aspects.
Foreign Companies and workers
If your company is based outside the Netherlands and you want to send personnel there on a temporary basis, you must pay them at least minimum wage in Netherlands. It doesn’t matter if a recruiter recruits international employees through a contractor or subcontractor. If they are based in the Netherlands they have to pay them at least the minimum wage in Netherlands.
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Bonuses, vacation money, and compensation packages are all available
In addition to your regular monthly wage, you will be paid a vacation grant equal to 8% of your yearly budget (approximately salary of a month ) in May. It is to cover the costs of your summer holiday.
Some companies also give performance incentives, which can be paid monthly, quarterly, or annually. Other perks may include a corporate automobile, a cell phone, or transportation costs covered on a monthly basis.
Highly skilled migrants hired from outside the country typically receive even better pay packages, which include relocation, initial housing / brief stay, and (in some cases) foreign school expenses for their children.
Add your monthly salary, holiday allowance, and any incentives or perks to get your total yearly income.
In a complete working week, how many hours are there?
The number of hours in a full complete working week is not specified by legislation. A full week generally consists of 36, 38, or 40 hours.
Advanced career salary indication
Your compensation is likely to be greater if you are farther along in your career or if you were hired from another country. Use the Salariskompas to receive a precise estimate of your income in the Netherlands (in Dutch). In terms of providing a tailored salary guideline, this site can show you the amenities, a number of holidays, and hours worked (including those of overtime) that are relevant to your particular location and industry.
How do you figure out what the minimum wage in Netherlands is?
The minimum stipend you pay your employee is based on the number of hours they work. If your employee is only employed part-time. As a result, the minimum wage in Netherlands is correspondingly reduced. The minimum stipend varies by industry. It can also be spelled out in a collective bargaining agreement (CAO). Wages are not allowed to be less than the legal minimum wage in Netherlands. Calculate your employee’s minimum salary using the online calculator (in Dutch).
The minimum salary is increased every six months. Every year on the 1st of January and the 1st of July, the increments take place. You’ll need to make salary adjustments for your staff as a result.
Lowered criteria for pay
The aforementioned pay parameters are frequently necessary when hiring from abroad. Employers may use a minimum wage criterion in three instances when employing a non-Dutch or EU individual to work in the Netherlands:
- The residency permit for working as a highly-skilled worker is applied to either during or immediately after the highly educated person’s orientation year.
- The highly skilled worker no longer has a residence visa for the highly educated person’s orientation year, but previously did. The residence permit for employment must be applied for within 3 years following graduation, receipt of a Phd., or the expiration of a residence permit for scientific research.
- The highly skilled worker has never received a residence permit for the highly educated person’s orientation year but meets the requirements for this dwelling. Because the highly trained person has graduated, obtained a Ph.D., or done scientific study.
There will be no settlement or withholding of minimum wage in Netherlands.
Employers are not permitted to settle or deduct money from the legally required minimum wage in Netherlands. Taxes and pension premiums, for example, may only be withheld or settled if it is legal. Housing and health insurance are two exceptions. One can withhold a maximum of 25% of the minimum salary, and the housing circumstances must exceed quality standards. The maximum is equivalent to the average expected premium in the case of health insurance, Health insurance policy copy must be given to the employee.
Employees with disabilities are exempt from this rule, and one can withhold money for basic utilities, water charges, and sewage for this group (in addition to the abovementioned). There is no limit to the amount or percentage that can be used. This is to keep this group of workers from going into debt. Only with written agreement from your employee may you settle or withhold money from them (whether or not they have a handicap).
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Having gone through this article, you now must be aware of the minimum salary you should be getting. Hence if you are being underpaid, you should communicate the same with your employer, and if things don’t work out, you can file a case anonymously through a limited jurisdiction judge. If any discrepancies are found, the employer will have to pay a fine of €12,000. We’ve covered all the detail that’ help you with the wage structure of the Netherlands, and we hope it helps you, and you found this article insightful.
Reshma Ali has great expertise in mergers & acquisitions, Financial planning, and international company formation and offers advice and knowledge to help businesses achieve their objectives.