The Netherlands - it is not only tulips and windmills, it's also one of the countries with the highest minimum wage in the world. In this article, you will find information about work contracts, social security, health insurance, and taxes.
Work contract
Netherlands work contract may be concluded in writing or orally. Netherlands law does not require a written work contract, but it is recommended for the protection of the employee. If the work contract is concluded orally, the employer must inform the employee in writing of the facts that would otherwise constitute awritten work contract:
- the name and seat of the employer,
- the address of the employee,
- place of work,
- type of position,
- duration of the contract,
- date of commencement,
- salary and date of payment,
- working and probationary periods,
- notice period.
The given information must be provided to the employee within one month of the start of the date ofcommencement.
The most common types of work contracts are:
- indefinite-term contract - without a termination date
- fixed-term contract - with a pre-determined termination date.
Wage
The Netherlands has one of the highest minimum wages in the world, which is reviewed and adjusted twice a year, on January 1st and July 1st. In addition, from January 1st, 2024 there is a significant change in the wage setting. The minimum wage law no longer sets a fixed monthly wage, as it did until 2023, but afixed hourly wage.
The amount of the minimum hourly wage depends on the age of the employee:
| Age | Minimum hourly wage |
|---|---|
| 21 | €13,27 |
| 20 | €10,62 |
| 19 | €7,96 |
| 18 | €6,64 |
| 17 | €5,24 |
| 16 | €4,58 |
| 15 | €3,98 |
The amount of the wage in 2023
From the January 1st, 2023 the minimum monthly wage for employees aged 21 and over was €1934,40. For employees aged between 15 and 20 the minimum wage was For employees between the ages of 15 and 20, the minimum wage was set based on the relevant percentage of the minimum wage as follows:
| Age | Minimum monthly wage | % from the minimum wage |
|---|---|---|
| 21 | €1 934,40 | - |
| 20 | €1 547,50 | 80% |
| 19 | €1 160,65 | 60% |
| 18 | €967,20 | 50% |
| 17 | €764,10 | 39,50% |
| 16 | €667,35 | 34,5% |
| 15 | €580,30 | 30% |
Working time
The working time is a maximum of 8 hours per day, or 40 hours per week and it includes a 30-minute unpaid break, which is taken after 5.5 hours of work. The break may be divided into two 15-minute breaks.
Netherlands employees can request an adjustment of the working time or a change of place of work once a year.
Probationary period
The probationary period depends on the type of work contract as follows: 1 month tops - for fixed-term contracts with a minimum duration of 6 months and a maximum duration of 2 years, 2 months tops - for indefinite-term contracts and fixed-term contracts with a minimum duration of at least 2 years.
The probationary period can not be set with work contracts of less than 6 months.
Holiday
Number of days of holiday depends on the weekly work hours. This means that the entitlement for the holiday is quadrupled of work hours per week. With the work hours of 40 hours per week, you are entitled to a holiday with a duration of 160 hours (40×40 = 160), which represents 4 weeks of holiday. The same applies to employees with part-time jobs.
The holiday can be transferred to the following year, but it has to be claimed in the first 6 months otherwise, the entitlement for the holiday will be terminated.
Health insurance
Anyone working in the Netherlands must take out the basic health insurance of their choice within 4months of arriving in the country. Until then, you can use the European Health Insurance Card (valid for EU, EEA, or Switzerland citizens). The insured person's monthly health insurance fee is on average €120 (varies depending on the choice of the health package). The health insurance fee is not automatically deducted from the employee's wage but is paid by the employee (some health insurance companies can arrange for the insurance to be deducted directly from the wage). The employer pays health insurance contributions for the employee at the rate of 6.57% of the wage (the amount applicable for 2024).
Besides basic health insurance, you can also take out additional health insurance, which covers health costs above the basic insurance (e.g. dental treatment).
Social security
Employees are part of the Netherlands social security system. Employees along with their employers contribute to the social security system. The employee contributes 13.07% of the wage. The employer's contribution is in the amount of 25%.
Incomes / Taxes
Incomes must be taxed by every employee who is working in the Netherlands. The employer pays income tax on behalf of the employee in monthly advances, which are decisive for the annual tax settlement or tax return.
Social Security contributions and income tax are paid in one payment.
Netherlands tax rates for the years 2023 and 2024:
| Annual income in year 2023 | Income tax rate in year 2023 | Annual income in year 2024 | Income tax rate in year 2024 |
|---|---|---|---|
| €0 - €73 031 | 36,93% | €0 - €75 518 | 36,97% |
| €73 032 and over | 49,5% | €75 518 and over | 49,5% |
