When you start a new job in the Netherlands it's always a challenge to understand how your salary is calculated, how much tax you are paying and how to read your payslip. You may also wonder if you are receiving a fair wage.
Here is some general information to help you understand how salaries are taxed, what salary you can expect (depending on your experience and industry) and what the minimum wage is in the Netherlands.
Your gross salary (bruto salaris) is the total amount of your salary before tax and other costs are deducted.
Your net income (netto salaris) is your salary after income tax, social security payments and contributions for your pension have been deducted.
The net salary is the amount that is deposited in your bank account each month. When discussing your salary, your employer will almost always refer to the gross monthly amount. Be sure to check the net amount as there is a quite a difference between the two values.
Calculating your net Dutch salary
For example, if your salary is 2.500 euros gross per month, (32.400 euros a year including 8% holiday allowance), then after taxes and social security contributions you will take home around 1.880 euros net per month. Use a salary calculator to get an indication of your net monthly income.
Bonuses, holiday pay and remuneration packages
In addition to your standard monthly salary, in the month of May you will receive a holiday allowance equivalent to 8% of annual earnings (roughly one month’s salary). This is to cover expenses for your summer holidays.
Some employers also offer performance-based bonuses which may be paid out on a monthly, quarterly or annual basis. Other benefits can include a company car, mobile phone or the coverage of your monthly costs for transportation.
Highly skilled migrants recruited from abroad often enjoy even more attractive remuneration packages, with the coverage of relocation, initial accommodation / short stay and (sometimes) the fees for international schools for their children.
Minimum wage in the Netherlands
As of January 1, 2017, the minimum wage (gross) for a full-time employee aged 23 or older is 1.551,60 euros per month, or 71,61 euros per day. This is equal to 8,96 euros per hour based on a 40 hour working week.