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Minimum wage in the Netherlands
Payroll in the Netherlands
Statutory benefits in the Netherlands
Other benefits in the Netherlands
Compliant, seamless payroll and benefits in the Netherlands and beyond
Payroll and benefits in the Netherlands
Every country in the world has its own rules and regulations when it comes to payroll and benefits. In the Netherlands, payroll involves registering as an employer with the Tax Administration, withholding payroll taxes and reporting and paying the tax you owe each month.
Employers in the Netherlands also need to understand the various rights, protections and benefits that employees are entitled to by law. If you want to build a team in the Netherlands, it can also be helpful to understand the additional benefits that employers can choose to offer their employees, even if they’re not compulsory. This can help you to attract and retain the best talent, making your Dutch expansion more likely to be successful.
Minimum wage in the Netherlands
Employees in the Netherlands are entitled to at least the statutory minimum hourly wage, set by the Dutch government. The minimum wage is a gross hourly rate (before tax). Since 2024, the Netherlands no longer uses a statutory minimum monthly, weekly, or daily wage—the hourly minimum wage applies uniformly. This rate applies to employees aged 21 and over, with reduced rates for younger workers.
Hourly minimum wage in the Netherlands
As of 2026, the statutory minimum wage for employees aged 21 and over is €14.71 per hour.
Agreeing on a monthly salary
Although the minimum wage is defined hourly, employers and employees can still agree on a fixed monthly salary when working hours are fixed. This is usually calculated as:
- Hourly wage × average monthly hours.
- (Commonly based on total annual hours divided by 12).
These arrangements are often set in collective labour agreements but can also be agreed individually and recorded in the employment contract.
Deductions from minimum wage employees
Employers must withhold statutory payroll deductions (income tax and social security contributions). For minimum wage earners, Dutch rules restrict additional deductions from wages, although limited exceptions may apply (for example, certain housing or health insurance deductions under strict conditions, or specific deductions related to support for employees with disabilities).
Minimum wage in the Netherlands after tax
The Dutch tax system is progressive, with multiple income tax brackets and tax credits that can significantly affect net pay. Employers are encouraged to provide clear gross-to-net explanations so employees understand their take-home pay.
Average salary in the Netherlands
Average salary varies by sector, region, and role. Official “average salary” figures are typically published annually and are commonly used as market benchmarks, especially in finance, tech, engineering, and other high-demand fields.
Payroll in the Netherlands
Like all countries, the Netherlands has certain rules and requirements that apply to employer payroll. For example, employers have to keep detailed records of their payroll and file a payroll tax return each month to declare the taxes they owe.
How to set up payroll in the Netherlands
To set up payroll in the Netherlands, a business has to register as an employer with the Netherlands Tax Administration (Belastingdienst). After an employer registers, they receive:
- A payroll tax number
- A payroll tax return letter
These two important documents allow employers to run payroll, withhold payroll taxes, and remit them to the Tax Administration.
Running payroll in the Netherlands
Employees in the Netherlands are paid monthly, usually at the end of the month. Employers must deduct certain taxes from their employees’ wages. After running payroll, they have to file a payroll tax return and remit the taxes they’ve collected to the Tax Administration by the end of the following month.
Wages have to be paid in euros in the Netherlands. Employees must also receive at least the minimum wage as a bank transfer, which acts as proof that their employer has paid them at least this amount. If you pay employees more than the minimum wage, you can choose to pay the remainder in another way.
Employer payroll taxes in the Netherlands
Employers have to deduct payroll taxes from their employees’ wages and pay these to the tax authorities. Employer payroll taxes in the Netherlands consist of:
- Wage tax and national insurance contributions
- Social security contributions
- Health care insurance contributions
Payslips in the Netherlands
Providing employees with a payslip is an important part of running payroll in the Netherlands. Employers have to give their employees a payslip the first time they pay them, and then every time there is a change in their salary or deductions. If you pay an employee the same amount every month (and make the same deductions) you don’t necessarily have to give them a payslip each time.
There’s certain information that has to be included on each payslip by law, such as the employee’s gross salary, components, deductions, and allowances. Employers can be fined if they fail to provide a payslip or give an employee a payslip containing incorrect information.
13th salary in the Netherlands
Many employees in the Netherlands receive a 13th salary payment at the end of the year. Unlike in some other countries, this isn’t a legal requirement, but it is expected. Some collective labour agreements require that employers pay their employees a 13th salary.
How to outsource payroll in the Netherlands
If you want to hire employees in the Netherlands but don’t have a legal entity there, you might choose to outsource your payroll to an employer of record or global payroll provider, like CXC. This allows you to begin growing your team in the Netherlands without the cost and delays associated with setting up an entity. It can also help you to ensure compliance with labour laws and tax regulations, thanks to your EoR provider’s knowledge of the market.
Payrolling vs. payroll in the Netherlands
In an international context, payroll refers to the process of paying a company’s employees, including deducting the necessary taxes and charges and remitting them to the right authorities. However, the Netherlands also has a concept called ‘payrolling,’ which can make things confusing.
In the Netherlands, payrolling is a way of hiring staff, where a ‘payrolling’ company engages and pays workers, and then effectively loans them to clients. This is similar to hiring workers from an employment agency (or ‘temp’ agency) in other countries. When discussing payroll in the Netherlands, it’s important to be sure that you’re talking about the right thing.
Statutory benefits in the Netherlands
Statutory benefits are benefits that are mandatory for employers to provide to their employees. Statutory benefits for employees in the Netherlands include the right to earn at least the national minimum wage for their age group. Below, we’ll discuss some other key benefits for employees in the Netherlands.
Paid leave and holiday allowance in the Netherlands
Employees in the Netherlands are entitled to at least four weeks of holiday leave each year. That means they should get at least four times the hours they usually work each week as paid time off. For full-time workers, this amounts to 20 days of leave. Some companies in the Netherlands choose to set a more generous holiday policy.
In addition to paid time off, employees in the Netherlands are entitled to a holiday allowance. This is an additional payment that’s meant to help them enjoy their holidays. The minimum holiday allowance an employer in the Netherlands can pay their employees is 8% of their gross wages from the previous year.
Employers don’t have to pay employees a holiday allowance if:
- A collective labour agreement says they don’t have to
- The employee earns more than three times the minimum wage
Most employers pay holiday allowance in a lump sum in May or June. If you want to pay it at a different time of year or in instalments, you’ll need written consent from your employees.
Other leaves in the Netherlands
In addition to paid time off for holidays, employees in the Netherlands are also entitled to various other types of leave, including parental leave, emergency leave, and special leave. Employers must grant their employees at least the statutory minimum leave as defined by Dutch employment law, but they can choose to give them more.
Maximum working hours in the Netherlands
Employees in the Netherlands have the right to work a maximum of 60 hours a week and 12 hours a day. They also shouldn’t work more than an average of 48 hours a week over any 16-week period, or 55 hours a week over a 4-week period.
Sick leave in the Netherlands
Employees in the Netherlands are entitled to paid sick leave if they become unwell and are unable to work. Employers are obliged to pay employees at least 70% of their wages for up to two years. If this amounts to less than minimum wage, it must be topped up to the minimum wage amount for the first year.
Notice periods and termination rights in the Netherlands
Employees in the Netherlands have certain rights related to notice periods and the termination of their contracts. The statutory notice period for employers depends on the employee’s length of service. The statutory notice period for employees is one month. Employers can agree on a longer notice period with their employees. However, if the employee’s notice period is longer than a month, the employer’s notice period has to be at least twice as long.
There are also laws in the Netherlands that protect employees from unfair dismissal. For example, employees can’t be dismissed in the first two years of being on sick leave, or during pregnancy or maternity leave. It’s also illegal to dismiss an employee because they want to take parental leave or refuse to work on Sundays.
National Insurance and Employee Insurance in the Netherlands
The Netherlands has a robust social security system designed to protect employees in the event of incapacity, illness, or unemployment, among other things. To pay for this, employees have to pay two types of insurance: National Insurance and Employee Insurance. Employers have to deduct these contributions from employees’ wages.
Employee Insurance is compulsory for every employee, and National insurance is compulsory for everyone who works or lives in the Netherlands on a permanent basis. Employers in the Netherlands have to deduct the relevant contributions from their employees’ wages and pay them to the Dutch Tax and Customs Administration.
Netherlands health insurance schemes
Anyone living and working in the Netherlands has to take out their own insurance to cover the cost of healthcare. All insurers are obliged to offer the same ‘standard package,’ the terms of which are set by the government. Insurers have to charge everyone the same premium for the standard package, regardless of their age or state of health.
Employees who earn over a certain threshold have to pay additional insurance contributions, known as the ZVW contribution. Employers must deduct this extra payment from their employees’ wages and remit it to the Health Insurance Fund.
Other benefits in the Netherlands
Companies in the Netherlands can choose to offer their employees benefits in addition to their statutory entitlements. Providing additional employee benefits can be a valuable way of showing employees that you value them and can ultimately make it easier to attract and retain talent.
Travel expenses
Many employers in the Netherlands choose to reimburse their employees for travel expenses if they live more than 5km from their place of work. For example, you could pay your employees back for the money they spend on public transport to get to work. Alternatively, some companies pay their employees mileage to cover the cost of coming to work with their own transport. The Tax and Customs Administration has set a limit of EUR 0.19 per kilometre for mileage reimbursements.
Pensions
In the Netherlands, everyone is entitled to the state old-age pension (AOW) as long as they have worked in the country for long enough. Employers can also choose to provide their employees with a separate pension plan, which both parties contribute to. In some industries, it’s compulsory for employees to offer their employees a pension through an industry pension fund.
Additional leave and holiday allowance
Employers can also choose to offer their employees extra paid leave in addition to their statutory entitlements. For example, you could give employees more than the compulsory 20 days of annual leave, or pay them an additional holiday allowance. Some employers also choose to pay overtime in the form of extra holiday days.
13th salary
In the Netherlands, the 13th salary is only mandatory for certain sectors, where it’s required by the Collective Labour Agreement (CAO) that applies. However, you can also choose to pay all of your employees the 13th salary as an additional employee benefit. This shouldn’t be confused with the holiday allowance, which is compulsory for all employees.
Work-from-home stipend
Employees who work remotely from home often incur certain expenses, such as the cost of office equipment or utilities. Employers in the Netherlands can choose to offer their remote employees a stipend that helps them cover these expenses.
Additional insurance
Some companies choose to offer their employees different types of insurance, such as additional health insurance or insurance that covers them in case of accidents.
Compliant, seamless payroll and benefits in the Netherlands and beyond
Getting payroll and benefits right is not just a legal issue. Every country also has its own customs, norms and expectations about employee compensation. And if your operations aren’t in line with your workers’ expectations, they may not stick around for long.
Thankfully, we know what we’re doing. When you work with CXC to engage workers in the Netherlands, we’ll handle everything from tax withholding to employee bonuses on your behalf.
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