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.
Gross salary and net income in the Netherlands
One of the most important things to understand about your Dutch salary is the difference between your gross and net salary.
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, (27.778 euros a year including 8% holiday allowance), then after taxes and social security contributions you will take home around 1.995 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.
Your monthly salary, holiday allowance and any bonuses or benefits all add up to equal your total annual income.
Understand your Dutch payslip
In the Netherlands, employees receive a payslip (loonstrook) from their employer each time they are paid. The payment breakdown on Dutch payslips can be hard to interpret. Here is an overview of the main terms used:
Payslip top section: personal details
- Periode - the relevant time period (week or month)
- Personeelsnummer - employee number
- Salaris / uurloon - gross salary (pre-tax)
- Bijz. tarief / heffingskorting (ja) - tax rate (percentage) / general tax credit (yes)
- Verzekerd voor WW, WiA, ZW, Zvw - social security you are covered for / contribute to
- Datum in dienst - date you entered employment
- Burgerservicenummer (BSN) - your Dutch social security number
- Functieomschrijving - job description
Payslip middle section: salary breakdown
- Omschrijving - description
- (Normale) gewerkt uren - (normal) hours worked
- Salaris - gross salary based on hours worked
- Brutoloon - gross salary before tax and other deductions
- Loonheffing - the amount deduced as prepaid tax and as social security contributions
- Sociale verzekeringen (SV) - social security contributions
- Reiskostenvergoeding - refunds such as transport costs
- Nettoloon - net salary after tax, deductions and refunds. This amount appears at the bottom of your payslip and is the final amount that is deposited into your bank account.
Payslip bottom section: holiday hours
- (Opgebouwd) vakantiegeld - (accumulated) holiday leave (in hours)
- Dutch Umbrella Company (Payroll & Contracting services)
- Payingit International (Payroll administration & Tax issues)
- All About Expats (Payroll & Immigration services)
Social premiums on your payslip
Your payslip may also state which social security premiums (sociale verzekeringen) you contribute to (and are covered by). Social security premiums can include:
- AOW (Algemene Ouderdomswet) / OP-premie - pension contribution
- AP-premie - disability pension
- ANW (Algemene nabestaandenwet) - widow benefit contribution
- AWBZ - special health care needs contribution
- WAO (Wet op de arbeidsongeschiktheidsverzekering) / WIA (Wet werk en inkomen naar arbeidsvermogen) - benefits for inability to work due to sickness
- WW (Werkloosheidswet) - unemployment benefit
- ZW or Zvw (Zorgverzekeringswet) - paid sick leave
Average income in the Netherlands
According to the Centraal Planbureau (CPB), in 2020 the median gross income for a person working in the Netherlands is 36.500 euros annually or 2.816 euros gross per month. A salary can vary greatly from the median income as it is influenced by age, sector, professional experience and hours worked. We explore some of these factors in the tables below.
Average salary in the Netherlands by age
|Age group||Annual income (gross)|
|15 - 25 years||10.600 euros|
|25 - 45 years||36.400 euros|
|45 - 65 years||42.400 euros|
|65 years+||24.900 euros|
Source: CBS, year: 2017
Salary indicator for new careers
Below is an overview of entry-level salaries in the Netherlands. These amounts are based on the average starting salaries of Dutch high school and university graduates one and half years after they completed their studies.
Starting salaries by industry
|Sector||Monthly salary (gross)|
|Visual arts||1.300 euros|
|Art history / archeology||1.800 euros|
|International business / languages||2.050 euros|
|Retail management / small business||2.150 euros|
|Industrial design||2.200 euros|
|Management / economics / law||2.300 euros|
|Artificial intelligence||2.400 euros|
|Business / business economics||2.500 euros|
|Fiscal economics||3.000 euros|
Source: Gemiddeld Inkomen
Salary indicator for advanced careers
If you are more advanced in your career, or you were recruited from abroad, most likely your salary is already higher. To get a specific indication of your salary in the Netherlands, make use of the Salariskompas (in Dutch). Besides providing a tailored salary guide, this site can also indicate the benefits, number of holidays and working hours (including overtime) that apply to your specific field and sector.
Minimum wage in the Netherlands
The legal minimum wage (minimumloon) in the Netherlands is based on age and is revised every six months in line with inflation. The minimum wage is based on a full-time employee working between 36-40 hours a week.
Minimum wage in euros from January 1, 2020 (gross)
|21 years and older||€1653,60||€381,60||€76,32|
Minimum wage by hour, per week in euros from January 1, 2020 (gross)
|Hours||20 years||21 years and older|