How do I get the most out of my gross salary? Use the expat calculator
You have found a good job for a great company in the Netherlands. The salary is excellent and the employment terms and perks are very appealing. Make sure you get the most out of them.
Here the Dutch Umbrella Company explains the Dutch regulations and taxation issues that apply to you and offers a useful tool for calculating your maximum net salary: the expat calculator.
If you want to know your net earnings, you can go directly to the Online calculator to calculate your net salary. In addition, you will also receive a detailed email with relevant information about your salary.
How is your salary calculated in the Netherlands?
As an employee in the Netherlands, you are paid either monthly or every 4 weeks, generally speaking. Your earnings comprise your salary for the position and paid annual leave at 8 percent of your annual salary.
Often, there is a year-end bonus or 13th month payment. There may also be a premium pay element, a supplement for work during weekends, or a supplement for shift work. Naturally, some sectors often offer a performance-related bonus.
Your earnings are dependent on your job group and salary grade. Your earnings may also be determined according to a collective employment agreement.
Note: minimum salary criteria apply for highly skilled migrants. For highly skilled migrants aged 30 years upwards, a minimum monthly salary of 4.371,84 euros applies, and for highly skilled migrants under 30 years of age, a minimum monthly salary of 3.205,44 euros applies.
If you live in the Netherlands, you must pay tax in the Netherlands, which also means you have to pay specific premiums for national insurance, according to the Dutch pension system (AOW), Surviving Dependants Act (Anw) and the Exceptional Medical Expenses Act (AWBZ). The premiums are deducted from your gross salary on a monthly basis at the same time as income tax.
Exceptional tax benefits for expats: the 30% ruling
A special tax regulation applies to foreign employees in the Netherlands: the 30% ruling. This means your employer may pay you 30% percent of your salary tax-free. This is treated as a tax-free allowance.
The regulation was introduced to attract highly skilled migrant workers from abroad to sectors in the Netherlands experiencing a shortage of sufficiently qualified labour.
A number of criteria must be met in order to qualify for the 30% ruling:
› You must work in the Netherlands.
› Your employer must demonstrate that the specific skills you bring to the role are not to be found in the Dutch labour market.
› You must also be in possession of a valid visa.
› Together with your employer, you must submit an application to utilise the regulation to the Tax and Customs Administration of the Netherlands.
You may make use of the regulation for a maximum period of 8 years. Want to arrange this quickly and conveniently? Naturally, the Dutch Umbrella Company can assist you.
It is important to know that certain tax benefits are calculated according to your gross salary. Thus, if you utilise the 30% ruling, the exemption only applies to 70% of your salary. The 30% is not considered part of your salary, but rather as tax-free compensation. Thus, your pension accrual is based only on your salary and not on the tax-free allowance.
Advantages of working with The Dutch Umbrella Company
As a financial services provider, the Dutch Umbrella Company (a WePayPeople Company) ensures you gain maximum benefit from the regulation. As an expat, it is advisable to make use of this.
Their Expat Desk can assist employers and employees by applying for the 30% ruling on their behalf. At the start of the application process, you will be assigned a dedicated advisor who will coordinate your application from start to finish and communicate with the Dutch tax authority on your behalf.
Assistance to obtain the 30% ruling
The Dutch Umbrella Company offers the following 30% ruling services:
› Explanation of the 30% ruling application criteria.
› Initial screening to determine whether the employee’s circumstances meets the criteria of the 30% ruling.
› Provision of proforma payroll calculations with and without application of the 30% ruling (as required).
› Submission of a proforma application to the Dutch tax authority (as required).
› Provision of document templates and tips on how to fill these out correctly.
› Collation of the application documents and submission of the completed application to the Dutch tax authority.
› Once received, confirmation of the Dutch tax authority’s decision.
› Once received, provision of the official tax ruling to the employer and employee.
› Advice on how to implement the 30% ruling in the payroll administration.
A knowledge partner and advocate
The Dutch Umbrella Company is a partner of the Amsterdam Expat Centre and is thus a valued knowledge partner representing the interests of expats and highly skilled migrants. They are also fully conversant with current regulations and legislation as these apply to you.
In addition to financial services, The Dutch Umbrella Company also offers advice regarding residence and work permits. The organisation is recognised by the Dutch Immigration and Naturalisation Service (IND) as a sponsor.
Many expats, highly skilled migrants and their employers often choose to work in collaboration with the Dutch Umbrella Company to ensure procedures are completed correctly and more quickly.
To the online calculator
Having read the above, you are no doubt curious as to how much of your gross salary you will retain if you work in the Netherlands. Go straight to the Online calculator to calculate your net salary.