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In the Netherlands employers must pay their employees at least the statutory (youth) minimum wage and the statutory minimum holiday allowance. The minimum wage consists of a basic wage and various allowances, such as for shift work and irregular working hours. Until 1 July 2017 it applied to all employees of 23 years of age and over. Since that date the age for regular minimum wage has dropped to 22 years and will drop to 21 years in 2019.
Foreign companies and foreign workers
If you run a business outside the Netherlands and intend to post employees to the Netherlands on a temporary basis, you are also obliged to pay them at least the minimum wage. If you are based in the Netherlands and hire foreign employees or have foreign employees work for you via a contractor or subcontractor, you are responsible for ensuring that they are paid at least the minimum wage.
Youth minimum wage
The youth minimum wage applies to all employees between 15 and 21 years old. The wages of youths aged 18, 19 and 20 jaar increase gradually to prevent young people from being dismissed when they reach certain age. There is no statutory rate for 13 and 14-year-olds, which means employers and employees may agree together on a rate.
To whom does the minimum wage apply?
The minimum wage applies from the age of 22. In 2019 it will apply from 21 years of age. It applies to:
- regular and temporary staff
- on-call employees
- temporary agency workers
- foreign personnel
- staff hired through (sub)contracting
Payment by bank
The statutory minimum wage must always be paid by bank transfer. If you fail to do so, a fine may be imposed. If your employee is paid more than the statutory minimum wage, a bank transfer is not mandatory for the extra amount. This also applies to the holiday allowance, which you may pay in cash or with vouchers.
No settling or withholding minimum wage
Employers are not allowed to settle or withhold money from the statutory minimum wage for costs such as meals, housing, insurance premiums or traffic fines. Employees must pay these costs themselves. However, if you pay your employee more than minimum wage, you may settle or withhold money from the extra pay with written authorisation from your employee. Other costs may only be withheld or settled if this is legally permitted, such as taxes and pension premiums. In all cases, your employee must at least receive the minimum wage.
Minimum wage director/majority shareholders
Director/majority shareholders of innovative startups that invest in R&D and are considered starting entrepreneurs with regard to the R&D relief, may only receive the statutory minimum wage for the first 3 years. They can apply the R&D relief scheme without prior consent from the Dutch Tax and Customs Administration.
Updating the rates
The statutory minimum wage rate is updated every six months, on 1 January and 1 July of any given year. This means every employer must adjust their prevailing wages.
Number of employees earning the legal minimum wage (or less) in relation to company size.