In the Netherlands employers must pay their employees aged 21 and up at least the statutory minimum wage and the statutory minimum holiday allowance. For employees aged 15 to 20, the youth minimum wage (in Dutch) applies. For employees 13 and 14 years there is no minimum wage. You agree together on the amount of the wage.
What is the minimum wage?
The Dutch minimum wage consists of a basic wage and various allowances, such as for shift work and irregular working hours. Every 6 months (on 1 January and 1 July) the minimum wage is adjusted. You will need to adjust your employees' salaries accordingly.
How to calculate the minimum wage
The amount you pay your employee for the minimum wage depends on the number of hours they work. If your employee works part-time, then the minimum wage is proportionally lower. The minimum wage can differ per sector. It can also be laid down in the Collective Labour Agreement (CAO). Wages may not be lower than the statutory minimum wage. Use the online tool to calculate the minimum wage for your employee (in Dutch).
Gross pay and net pay
- The gross minimum wage is the amount that has been laid down by law or in an employment contract (Collective Labour Agreement).
- Net pay is the amount that will end up on your employee's bank account (gross minimum wage minus payroll taxes).
The difference between gross and net pay depends on the payroll taxes that apply. Payroll taxes are made up of income tax and social security contributions, such as old age pension (AOW) and unemployment insurance (WW). Your employee contributes to these.
Withholding costs from the minimum wage
You withhold the legally permitted costs, such as taxes and pension premiums, from the minimum wage. Employers cannot just settle or withhold money from the statutory minimum wage. There are exceptions for housing or health insurance (in Dutch). In the case of housing, you may withhold a maximum of 25% of the minimum wage and the housing conditions must meet quality norms. In the case of health insurance, the maximum is equal to the average estimated premium. The employee must give you a copy of their health insurance policy and a written authorisation.
There is an exception for employees with a disability. For this group, you can withhold money for utilities, sewerage, and water rates (in addition to the abovementioned). There is no maximum amount or percentage. This is to help prevent this group of employees getting into debt. If you settle or withhold money from employees (both with and without a disability), you may only do so with written consent from your employee.
Payment by bank
The statutory minimum wage must always be paid by bank transfer. If you underpay your staff, a fine may be imposed. If your employee is paid more than the statutory minimum wage, you can pay the extra amount in another way than by bank transfer. This also applies to the holiday allowance, which you may pay in cash or with vouchers.
You have to mention the minimum wage that is applicable to your employee on their payslip.
For which employees does the minimum wage apply?
The minimum wage should be paid to the following types of personnel:
- Employees on permanent of fixed-term contracts
- On-call employees
- Posted workers
- Foreign personnel
- Contractors or subcontractors
- Workers with an agreement for an assignment (ovo) or another type of agreement for paid work.
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 Dutch 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.
Minimum wage for assignment agreements
If you pay a worker on the basis of an assignment agreement (overeenkomst van opdracht, ovo, in Dutch) or other agreement for pay, you have to pay at least the minimum wage. This can be for an assignment or contracting agreement. Please note this does not apply to freelancers or self-employed professionals. They are in charge of setting their own tariffs.
Youth minimum wage
The youth minimum wage in the Netherlands applies to all employees between 15 and 20 years old. There is no statutory rate for 13 and 14-year-olds, which means employers and employees may agree together on a rate. Young people aged 21 or older are entitled to 100% of the statutory minimum wage.
Gross amounts of youth minimum wage
Do you employ young people? The gross amounts of the youth minimum wage apply for a full working week. Young people are entitled to a certain percentage of the statutory minimum wage according to their age. Check the percentage of the minimum wage that applies to your young employee with this table (in Dutch).
Apprentices and work experience
Do you employ young people on senior secondary vocational education (MBO)? If they are doing an apprenticeship, you will need to pay them the minimum wage for apprentices (in Dutch). If there are young people gaining job experience in your company, you do not have to pay them the minimum wage. In this case, they are there to learn and there is no work agreement.
Young disabled workers
Do you employ workers who receive a benefit under the Dutch Invalidity Insurance (Young Disabled Persons) Act (Wajong)? In some cases you can pay them less than the minimum wage. This is called wage dispensation for employment of young disabled workers.
What else you should know about the minimum wage
Minimum wage for piece work
If you pay your employees for piece work, you have to pay at least the minimum wage. You have to record the number of hours your piece-work employees work and what they earn. These records have to show that these employees earn at least the minimum wage for the number of hours they work on an assignment.
Minimum wage for additional hours
If your employees work extra hours, you must pay them at least the minimum wage for the addition hours they work. The employee works extra hours when they work more hours than stated in their contract. Or when they work longer than a full working week in your sector or organisation. You have to record how many extra hours your employee works. These records have to show that you pay the employee earn at least the minimum wage for the additional hours.
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 tax credit. They may use the statutory minimum wageand holiday allowance as the customary pay regulation for the first 3 years. This means they pay less wages and payroll tax, so that more money can be invested in R&D. After 3 years, the customary pay regulation applies. You can find more information in Dutch in chapter 18.1 Aandeelhouders of the Payroll Taxes Handbook (Handboek Loonheffingen). A startup is a starting, innovative company that is marked as a starting business according to the R&D tax credit (WBSO) act. They can apply the R&D tax credit (WBSO) without prior consent from the Dutch Tax and Customs Administration.