Dutch salary structure: What you need to know as an expat
Understanding the Dutch salary system
Moving to the Netherlands for work? Understanding the Dutch salary system is crucial to ensure you're being paid fairly. From salary scales and tax deductions to holiday allowances and negotiation tactics, this guide will walk you through everything you need to know as an expat about salaries in the Netherlands.
How does the salary system in the Netherlands work?
Salaries in the Netherlands are typically quoted in gross monthly terms. This means that:
- The amount you negotiate with your employer is before taxes and other deductions.
- Your net income, the amount you take home, will depend on:
- income tax (progressive tax brackets)
- social security contributions (pension, healthcare, unemployment)
- Pension deductions (depending on employer policies)
The average monthly salary (non-industry specific) is expected to:
- Increase from € 4.100 in 2024 to € 4.500 in 2025
- This rise is driven by high inflation, CAO negotiations, and expected economic growth.
Dutch salaries are structured according to industry-specific agreements known as collective labor agreements (CAO). These agreements set guidelines for salary scales in the Netherlands, including minimum wages and pay raises. Your employer will usually determine your salary based on experience, qualifications, and the industry pay scale.
Employees also receive an 8% holiday allowance and in some cases bonuses or additional benefits like relocation packages. If you're a highly skilled migrant (HSM employee), your employer may apply for the 30% tax ruling, which allows you to receive 30% of your salary tax-free for up to five years.
Netherlands salary scales per sector: what to expect
In the Netherlands, salaries vary by sector and experience level. The Dutch collective labor agreement pay scales (CAO) dictate wages in many industries, such as healthcare, IT, and education.
Employees in regulated professions (e.g., healthcare and teaching) have fixed salary scales, while private-sector salaries may offer more flexibility. For example, an entry-level IT professional might start at a higher salary than a social worker due to market demand. Additionally, pay structures differ for expats, highly skilled migrants (HSM employees) often receive higher salaries with additional benefits like relocation assistance and tax breaks.
Examples of salary scales in the Netherlands
To give you an idea of the range of the scales, here are a few examples of salary scales in the Netherlands, all listed in monthly gross income, so excluding holiday allowance:
- Senior Officer Trade Services Bank Guarantees at a Dutch bank, payment scale 6 finance, € 2.717 to € 3.880
- Medior Online Marketeer at a web agency, no official scales, € 3.000 to € 3.800
- Junior Program Coordinator Exact and Natural Sciences at a government-funded research initiative, payment scale 10 CAO Onderzoeksinstellingen (Research Initiatives), € 3.458 to € 5.486
- Medior Functional Manager Student Affairs at a public university, payment scale 9 CAO hbo (university of applied sciences), € 3.609,94 to € 4.909,21
- ICT Infrastructure Advisor at a health/social impact company, payment scale 16 ICT, € 4,085 to € 5,624
- Director Business Management at an institute for health care, € 7.168,94 to € 9.982,56 (36 hours)
Please take into account that the abovementioned salaries are only the gross salary. However, there is large variation in a financial bonus, holiday days, public transport (a free travel card, car, or bicycle), retirement funds, workout facilities and compensation, and training budgets. For example, in these few examples, the paid holiday days vary from 20 to 53, which can make a large difference in the net annual salary.
What are average salaries by industry?
Salaries in the Netherlands differ significantly by industry. Below is an overview of average salaries by industry:
- IT & Software Development: € 47,000 - € 70,000
- Finance & Banking: € 50,000 - € 75,000
- Engineering: € 45,000 - € 65,000
- Healthcare: € 42,000 - € 60,000
- Education: € 38,000 - € 55,000
- Hospitality & Retail: € 25,000 - € 38,000
These figures depend on experience, education, and Netherlands salary scales. Expats in in-demand fields such as IT or finance may receive higher salaries due to labor shortages.
How to calculate your own net salary?
Since salaries in the Netherlands are usually quoted as gross amounts, understanding how to calculate your net salary is essential. Deductions include:
- Payroll tax: 3 different brackets with tax percentages between 35.82% and 49.5% (see below)
- Social security contributions: Covering pension, unemployment, and healthcare
- Pension contributions: Depending on employer agreements
In 2025, the Dutch income tax system has three brackets: 35.82% for income up to €38,441, 37.48% for income between €38,441 and €76,817, and 49.50% for income above €76,817. Only the portion of your income exceeding each threshold is taxed at the higher rate, not your entire salary. Many employees mistakenly believe their entire income is taxed at the highest rate once they surpass a bracket, but the system is progressive.
To determine your net salary, you can use our online Dutch salary calculator or ask your employer for a Netherlands pay scale breakdown based on your contract. If you qualify for the 30% ruling, you will take home a larger percentage of your gross salary.
Holiday allowance and vacation days in the Netherlands
Dutch labor laws ensure employees receive at least four times the weekly working hours as paid holiday leave (usually 20-25 days per year for full-time workers, with a minimum of 20). Many companies provide extra leave days based on company policies or Dutch collective labor agreements.
In addition, all employees receive 8% holiday pay in May, calculated as a percentage of gross annual earnings. Public holidays vary by region, and many companies also provide additional leave for personal circumstances. Part-time employees also receive paid vacation days, calculated proportionally to their working hours.
What is the minimum wage in the Netherlands?
Expats should also be aware of legal minimum wage Netherlands requirements and sector pay regulations to ensure they receive fair compensation. If possible, consult local recruitment agencies for insights into current pay trends.
The minimum wage in the Netherlands is determined by the government and adjusted twice a year. Starting January 2025, the hourly minimum wage for employees aged 21 and older is € 14,06 per hour. Wages for younger workers are lower and increase with age. Unlike in some countries, the Netherlands no longer has a fixed monthly minimum wage, as it depends on the number of hours worked per month. It’s important for expats to check whether their salary meets the minimum wage requirements, especially if they work in industries such as hospitality or retail where wages tend to be lower.
Salary negotiation in the Netherlands: tips for expats
Negotiating a salary in the Netherlands can be complex, and many expats make common mistakes that impact their compensation. To avoid these pitfalls, keep the following in mind:
- Focus on gross salary, not net salary. Most employers discuss gross salary, so make sure you understand how much you will actually take home after taxes and deductions.
- Consider secondary benefits. Pension contributions, travel reimbursements, and performance-based bonuses can significantly enhance your total package.
- Don’t forget the 8% holiday allowance. This is a key part of Dutch salaries and is paid annually in May, calculated as 8% of your gross yearly earnings.
- Check for tax benefits. The 30% ruling for highly skilled migrants allows you to receive 30% of your salary tax-free for up to five years if you qualify.
By avoiding these misunderstandings, expats can secure fair compensation that aligns with their experience and the Dutch job market.
Conclusion: understanding salary scales in the Netherlands
Understanding the Dutch salary system is key to ensuring you receive fair compensation as an expat. From Netherlands salary scales to holiday pay and tax deductions, knowing how your salary is structured allows you to negotiate better. Research your industry’s pay trends, consider factors like benefits and relocation costs, and use net salary calculators to avoid surprises.
If you’re looking for expert advice on salaries and job opportunities in the Netherlands, get in touch with Employor. Our team can help you navigate Dutch employment contracts and salary expectations so you can start your career with confidence!
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