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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.
Want to find out more?
FAQ's
1. How do companies run payroll in the Netherlands?
Payroll in the Netherlands involves calculating employee salaries, withholding payroll taxes (loonheffingen), paying holiday allowance, processing pension contributions where applicable, and submitting payroll tax returns (loonaangifte) to the Dutch Tax Administration (Belastingdienst). Employers are responsible for paying employees accurately and meeting all payroll, tax and employment reporting obligations.
Each payroll cycle should reflect the employee’s contractual and statutory entitlements, including salary, holiday allowance (vakantiegeld), bonuses, overtime, expense reimbursements, sick pay and any pension contributions or collective labour agreement (CAO) requirements. Employers must also calculate the correct payroll taxes. Wage tax and national-insurance contributions are generally withheld from salary, while employed persons’ insurance contributions and the employer’s income-related Healthcare Insurance Act contribution are generally paid by the employer. In limited situations, an employee Zvw contribution is withheld instead. After each payroll run, employers submit a loonaangifte to the Belastingdienst, reporting employee earnings, payroll taxes and social insurance contributions. Accurate payroll records should also be maintained for salaries, working hours, leave, sickness absence and any changes to employment conditions.
International companies without a Dutch payroll function often choose to work with a payroll provider or an Employer of Record (EOR). An EOR manages Dutch payroll, statutory reporting and employment compliance on the company’s behalf, allowing businesses to employ workers without establishing their own local payroll operation.
2. What are the payroll laws in the Netherlands?
Payroll in the Netherlands is primarily governed by the Wages and Salaries Tax Act (Wet op de loonbelasting 1964) and the National Minimum Wage and Minimum Holiday Allowance Act (WML). These laws require employers to calculate payroll correctly, withhold and report payroll taxes, pay employees at least the statutory minimum wage and holiday allowance, and meet their payroll reporting obligations with the Dutch Tax Administration (Belastingdienst). The Netherlands applies a statutory minimum hourly wage, with youth rates for eligible employees aged 15 to 20.
Payroll compliance also extends beyond tax reporting. Employers must ensure that payroll reflects the employee’s employment contract, statutory entitlements and any applicable collective labour agreement (CAO). This includes paying the correct salary, holiday allowance, overtime, pension contributions where required, and statutory sick pay.
Holiday allowance is generally at least 8% of qualifying gross remuneration, although written and CAO-based exceptions can apply to employees earning above the statutory threshold. Employers must continue paying at least 70% of wages and corresponding holiday allowance during sickness for up to 104 weeks, subject to statutory minimums, maximums and any more favourable contractual or CAO provisions. Failure to comply with Dutch payroll laws can result in additional tax assessments, interest, administrative penalties and employment disputes. Incorrect payroll calculations may also lead to underpayment claims, back payments or investigations by the Dutch Tax Administration or the Netherlands Labour Authority (Nederlandse Arbeidsinspectie), particularly where minimum wage or employment rights have not been met.
For international employers, payroll compliance means regularly reviewing payroll processes, employment contracts and applicable CAOs to ensure employee payments remain accurate as legislation and employment conditions change.
3. What are the steps to set up payroll in the Netherlands?
To set up payroll in the Netherlands, employers must register as an employer where required, collect employee payroll information, configure payroll to comply with Dutch tax and employment laws, and establish a process for ongoing payroll reporting and payments.
Step | What employers in Netherlands need to do? |
1. Register as an employer | Register with the Dutch Tax Administration (Belastingdienst) to obtain a payroll tax number and confirm any required registration with the Dutch Chamber of Commerce (KVK). |
2. Collect employee information | Obtain the employee’s identity details, BSN (Citizen Service Number), bank account, salary, working hours, tax information and employment contract. |
3. Configure payroll | Set up payroll to calculate loonheffingen, holiday allowance (vakantiegeld), pension contributions where applicable, employee insurance contributions and any applicable CAO requirements. |
4. Test payroll | Run a test payroll to verify gross-to-net calculations, payslips, tax withholding and statutory reporting before the first live payroll. |
5. Establish payroll processes | Set payroll deadlines, approval procedures, reporting responsibilities and payment dates for employees and the Belastingdienst. |
Before processing the first payroll, employers should also confirm whether a collective labour agreement (CAO) applies. Many CAOs contain payroll requirements, including salary scales, overtime rates, pension contributions and allowances, which must be reflected in payroll calculations.
Setting up Dutch payroll can take time, particularly for international businesses that first need to register as an employer, establish payroll systems and understand local employment requirements. Companies that need to hire quickly often choose an Employer of Record (EOR) instead. An EOR already has the local payroll infrastructure in place and can manage payroll, statutory reporting and employment compliance from the employee’s first day, allowing businesses to start operations without waiting for their own payroll function to be established.
4. What payroll taxes must employers pay in the Netherlands?
Employers in the Netherlands must calculate and pay loonheffingen, the Dutch payroll taxes that include wage tax (loonbelasting), national insurance contributions, employed persons’ insurance contributions and the income-related contribution under the Health Insurance Act (Zvw) where applicable. These amounts are reported and paid to the Dutch Tax Administration (Belastingdienst) through the employer’s payroll tax return (loonaangifte).
Not all payroll taxes are borne in the same way. Wage tax and national-insurance contributions are generally withheld from the employee’s gross salary, while employed persons’ insurance contributions and the usual employer Zvw levy are paid by the employer. For payroll purposes, employers are responsible for:
Payroll tax | What it covers? |
Wage tax (loonbelasting) | Income tax withheld from the employee’s salary. |
National insurance contributions | Contributions towards the Dutch social security system. |
Employee insurance contributions | Employer-funded contributions for schemes such as unemployment, sickness and incapacity for work. |
Health Insurance Act contribution (Zvw) | Employer contribution towards the Dutch healthcare system where required. |
For 2026, the usual employer Zvw levy is 6.10%, subject to the maximum contribution income. Employer insurance contribution rates vary according to matters such as employer size, contract type, sector and the differentiated rate assigned by the Belastingdienst. The low AWf contribution is generally available only where the statutory conditions for a written permanent, non-on-call contract are met. The amount payable depends on the employee’s salary, tax status, taxable benefits and any applicable tax relief. Employers should also check whether the employee qualifies for the 30% ruling, as this can affect payroll tax calculations for eligible international employees. During 2026, eligible employees may still receive up to 30% of qualifying remuneration tax-free, subject to the applicable conditions and salary thresholds. The maximum is scheduled to reduce to 27% from 1 January 2027.
Incorrect payroll tax reporting can lead to additional tax assessments, interest and administrative penalties from the Belastingdienst. Employers should therefore review payroll calculations regularly and ensure employee records remain accurate whenever salary, benefits or employment conditions change.
5. When should companies outsource payroll in the Netherlands?
Companies should consider outsourcing payroll in the Netherlands when they do not have the local expertise or resources to manage Dutch payroll accurately. This is particularly common when entering the Dutch market, hiring the first few employees, expanding quickly or managing employees alongside a global workforce.
Outsourcing payroll can help when your business:
- is hiring in the Netherlands for the first time.
- does not have a local payroll or HR team.
- needs to comply with Dutch payroll tax, holiday pay and CAO requirements.
- employs international workers, including those eligible for the 30% ruling.
- wants to reduce the administrative burden of payroll reporting and statutory compliance.
For many international businesses, outsourcing payroll is also more cost-effective than building an in-house payroll function. Instead of investing in local payroll software, specialist staff and ongoing legislative updates, employers can rely on local payroll experts to manage payroll accurately and on time.
If your business does not have a Dutch legal entity, an Employer of Record (EOR) may be the better option. An EOR provides both payroll and legal employment, allowing companies to hire employees without first establishing a local company.
6. What are the current minimum wage rates in the Netherlands?
From 1 July 2026, the statutory hourly rates are:
Age | Gross minimum hourly wage from 1 July 2026 |
21 and over | €14.99 |
20 | €11.99 |
19 | €8.99 |
18 | €7.50 |
17 | €5.92 |
16 | €5.17 |
15 | €4.50 |
The rates should be stated in euros because that is the legally applicable currency. Converting them into another currency does not determine compliance and can produce an incorrect result as exchange rates change. The country’s official wage table should be consulted whenever salary or payroll policies are prepared.
The Netherlands uses an hourly minimum rather than one universal monthly amount. The employee’s age, working hours and pay structure therefore matter when checking compliance.
Employers should also examine collective agreements, overtime, allowances and holiday pay. A salary that appears sufficient on a monthly basis may still fall short when calculated against the legally required hourly rate.
7. Why is understanding minimum wage important when hiring in the Netherlands?
Understanding the minimum wage in the Netherlands helps employers make compliant job offers, budget accurately and avoid underpayment. Dutch employers must pay at least the statutory minimum hourly wage, although many employees receive higher salaries because of their skills, experience, market demand or the requirements of an applicable collective labour agreement (CAO).
For international employers, the statutory minimum wage is often just the legal starting point. Employees hired through an Employer of Record (EOR) or for specialist, professional or highly skilled roles are typically paid well above the minimum wage to remain competitive and, where applicable, to meet immigration salary thresholds.
Employers should also remember that statutory minimum wage is only one part of payroll compliance. They should review whether a CAO sets higher minimum pay rates or additional allowances for the role, as these requirements must also be reflected in the employment contract and payroll.
Paying less than the required minimum can result in back-pay claims, financial penalties and enforcement action by the Netherlands Labour Authority (Nederlandse Arbeidsinspectie). It may also affect work permit applications where minimum salary thresholds apply.
8. How do employers ensure compliance with minimum wage laws in the Netherlands?
Employers should compare each employee’s hourly pay with the current statutory rate, taking account of age, working hours, overtime, qualifying allowances and any collective labour agreement. The calculation should be completed before hiring and repeated when terms change.
Only remuneration components that legally count towards minimum wage should be included. Holiday allowance, expense reimbursements, pension contributions, profit distributions and certain deferred or occasional payments should not be used to make up a shortfall in basic minimum pay. Payroll records should show the hours worked, salary paid, holiday treatment and any deductions. Managers should not make informal arrangements that reduce pay below the lawful level or treat unpaid preparation time as outside working hours without checking the rules.
The employer should monitor government adjustments and update salary bands, payroll settings and employment templates promptly. Employees should receive payslips that make gross pay, deductions and net pay understandable.
A review is particularly important after a promotion, reduction in hours, change to shift patterns or introduction of variable pay. Errors should be corrected quickly, with back pay where required.
Minimum-wage compliance is strongest when responsibility is shared between HR, payroll, finance and operational managers rather than left to one annual audit.
9. What employee benefits must employers provide in the Netherlands?
Employers in the Netherlands must provide paid annual leave, statutory holiday allowance, sick pay, family-related leave and, where applicable, pension benefits. Additional employee benefits may also apply under a collective labour agreement (CAO) or the employee’s employment contract.
Employee benefit in Netherlands | Statutory entitlement |
Annual leave | At least four times the employee’s weekly working hours each year (20 days for a full-time employee working five days a week). |
Holiday allowance (Vakantiegeld) | At least 8% of the employee’s gross annual salary, usually paid in May or June. |
Sick pay | At least 70% of salary for up to 104 weeks during sickness. Many employers pay more under a CAO or employment contract. |
Family leave | Statutory maternity, partner, parental, adoption and other family-related leave under Dutch employment law. |
Pension | Required where participation in an industry pension fund or an applicable CAO makes pension contributions mandatory. |
Employee insurance | Employers pay statutory contributions through payroll for unemployment, disability and other employee insurance schemes. |
Many international employers also offer benefits beyond the statutory minimum, including additional annual leave, performance bonuses, travel allowances, health insurance contributions and learning or wellbeing programmes to remain competitive when attracting talent.
Before hiring, employers should confirm whether a CAO applies, as it may provide more generous benefits than the statutory minimum. These entitlements should be reflected consistently in both the employment contract and payroll.
10. Why should companies partner with CXC to manage payroll in the Netherlands?
CXC provides payroll and Employer of Record (EOR) services in the Netherlands, helping businesses manage payroll accurately while complying with Dutch tax and employment requirements. Our local payroll specialists support salary processing, loonheffingen (payroll taxes), statutory reporting to the Dutch Tax Administration (Belastingdienst), holiday allowance, sick pay, pension administration where applicable and ongoing payroll compliance.
Whether you already have a Dutch entity or are hiring through our Employer of Record solution, CXC helps simplify payroll administration throughout the employee lifecycle. We support employee onboarding, payroll changes, statutory benefits, offboarding and payroll reporting, while helping employers meet their obligations under Dutch payroll legislation and any applicable collective labour agreements (CAOs).
With more than 30 years of global workforce experience, CXC supports businesses ranging from their first employee in the Netherlands to large multinational workforces. Our local expertise, combined with global payroll capability, helps employers reduce administrative complexity, minimise payroll risks and provide employees with an accurate and consistent payroll experience.
This allows your HR and finance teams to focus on growing the business, while CXC manages the day-to-day payroll administration and local compliance requirements.
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With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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