Wages in the Netherlands
Working in the Netherlands – or hiring its educated workforce – comes with advantages that rival many other locations, from the beginning to the end of a work relationship. Wages, labor costs and salaries in the Netherlands are competitive when compared to many other European countries.
Labor costs and competitive wages
For employers, the gross wage average in the Netherlands is relatively low compared to competitors. At the same time, average income in the Netherlands, adjusted for household wealth, is relatively high with minimum wages in the Netherlands allowing for a comfortable life. The takeaway? Hiring and working here are both favorable choices.
Elements of wages
Wages in the Netherlands are straightforward and easy to navigate:
- Income tax is mandatory for all people working in the Netherlands, but rates vary depending on a variety of factors including your salary and employee home situation
- A minimum 8% holiday allowance is a mandatory gross payment for most workers, except for those earning more than three times the minimum wage, and is payable either in a lump sum or spread over the year.
- Social costs, notably social security, are deducted from an employee’s gross salary each month, to help cover healthcare and other social insurances
- Both employers and employees contribute to pension fees to retirement plans. According to Melbourne Mercer Global Pension Index, the Netherlands is the top nation in the world for such programs
- Other remuneration, including performance-based bonuses, mobile phone reimbursements, or short-stay accommodation payments vary from employer to employer.
With advantages to companies looking to create a local workforce, the Netherlands provides a competitive environment.
Expatriates and wages
For expatriates moving to the Netherlands, the 30% ruling allows employees to receive 30% of a salary tax-free to compensate for moving costs. Collective bargaining between companies, government and members of unions also creates clarity and prevents disputes that may arise between employers and employees.