Salary and payslip

Published by:
Ministry of Social Affairs and Employment, SZW
Ministry of Social Affairs and Employment, SZW

For many employees, salary is the most important employment condition. That is why there are requirements attached to payment and to what is allowed to be called salary. For example, you must provide information on wages. You must not pay less than the minimum wage. And you should also share a payslip with your employee.

What falls under salary?

Salary covers everything your employee receives as payment for their work. This also includes compensation for costs incurred, or rewards in kind. For example, meals, discounts, or private use of a company car.

The minimum wage may not be a payment in kind. You must pay this in cash. You must also pay all allowances related to the work. These are in addition to the minimum wage.

The salary can consist of:

  • Money. Cash or via the bank.
  • Allowance or deduction from wages for the use of a laptop, telephone, or tablet.
  • Allowance or deduction for housing. This may not be more than 25% of the minimum wage.
  • Allowance or deduction for courses or training.
  • Travel allowance.

Other wage costs

Besides gross pay and holiday pay, you sometimes pay additional wage costs. For example, for a pension scheme, expense allowance, travel allowance, or 13th month. This depends on the extra terms of employment you have agreed with your employee. Or the collective labour agreement (CAO). All wage costs, plus employee and national insurance, are the wage costs for you as an employer.

Comply with the statutory minimum wage

You must pay your employees at least the statutory minimum hourly wage or youth minimum wage. They are also entitled to a minimum holiday allowance and a minimum number of vacation days.

The minimum wage applies to employees from 21 years of age. The youth minimum wage applies to employees of 15 up to 20 years old. The minimum wage levels are adjusted every 6 months. That happens on 1 January and 1 July.

Are you not paying enough wages? Then you may be fined by the Netherlands Labour Authority.

When to pay out salary

You pay out salary after the work has been delivered. So immediately after your employee has worked a certain period for you. This is usually 1 month, but you can also pay on a weekly or 4-weekly basis. You agree on that term with your employee in writing, for instance in the employment contract.

Would you rather not pay immediately after the period worked, but pay later? Then you may extend the period. You must agree to this in the employment contract. There are limits to the extension. With weekly wages, you may never pay later than 1 month. With a monthly wage, you may not extend beyond 1 quarter.

Paying out salary later

Do you pay too late without such agreements in place? And is it your fault? Then your employee is entitled to a temporary salary increase, starting a few days after the date their salary was supposed to be paid.

The increase is:

  • 5% day for the 4th to the 8th working day after the day you were due to pay the wages
  • 1% for each working day after that you are late in paying

Your employee must go to court for this increase. The judge can limit the increase to a lower amount (for example, 10% or 15%). Can you prove that the delay is not your fault? Then you do not have to pay the increase.

How do you have to pay out the salary?

You have to pay the salary in cash or via the bank. The net minimum wage must always be paid via the bank. Does your employee earn more than the minimum wage? Then you are allowed to pay the rest of the salary in cash or in kind.


You must issue a payslip to your employee. Many employers do so each month, but that is not mandatory. You are required to provide a payslip upon payment of the first salary of a new employee. And as soon as something changes in the salary or the payroll taxes.

You are permitted to provide the payslip digitally if your employee explicitly agrees to this. Your employee must be able to save the digital payslip as a document.

Read what should be included on the payslip.

When should you send an annual statement to your employee?

You send the annual income statement to your employee at the beginning of the new year. Usually in January or February. You provide the details on the annual statement to the Netherlands Tax Administration.

What does an annual statement contain?

An annual statement states what your employee has earned that year. This is your employee's annual income. The annual statement must state:

  • The year for which your employee received wages.
  • The wages earned in that year. This is also called wage for payroll taxes or taxable wages. It is the gross wage minus the pension contribution.
  • The tax and employer social security contributions deducted from the wage.
  • The employment tax credit (arbeidskorting) taken into account for payroll taxes.
  • The untaxed allowances. For example, a travel allowance. You are not obliged to put this on the annual statement.

Questions relating to this article?

Please contact the Ministry of Social Affairs and Employment, SZW