To successfully expand your business, determining the right compensation and benefits for your Netherlands employees needs to be a priority from day one. You must figure out the proper wages, bonuses, and any supplemental benefits that can put you ahead of other employers, all while following Netherlands compensation laws and requirements.
Simplify the process with Globalization Partners. We are a global PEO solution for customers looking to expand in the Netherlands, hire employees, and run payroll. As the Employer of Record, we will employ workers on your behalf and take care of all compliance concerns from Netherlands benefit management to compensation laws.
Netherlands Compensation Laws
As of January 2021, the minimum wage in the Netherlands is 1,684.80 EUR per month for employees 21 and older. This rate will increase to 1,701.00 EUR on July 1, 2021. However, the minimum wage rate could change if your employee is covered under a collective bargaining agreement (CBA). It is best practice to outline the correct minimum wage in a written employment contract that the employee signs before their first day to avoid any misunderstandings.
Every employee in the Netherlands gets an 8% vacation allowance as a bonus under Netherlands compensation laws. They accrue this allowance monthly, and employers usually pay it out once a year in May.
Your Netherlands benefit management strategy must include guaranteed benefits. For example, the country celebrates 10 public holidays during which employees get the day off. Holidays that fall on the weekend are not compensated in lieu. Paid vacation time often depends on the applicable CBA. Globalization Partners currently does not operate under a CBA. The statutory minimum annual holiday entitlement is 20 days. However, skilled white-collar professionals generally receive 23-25 days per year. Some CBA’s grant additional leave days to older employees (55+ years). It may, therefore, be that your prospect expects you to match this, although this is not a general law.
Maternity and paternity leave is another guaranteed benefit in the Netherlands. Female employees get 16 weeks, starting with four to six weeks before the expected birth date and at least 10 weeks after giving birth. Fathers are entitled to 5 days of paid leave. For more information see the Maternity and Paternity section.
Netherlands Benefit Management
The second important aspect of the Netherlands benefit management includes offering any additional benefits that may not be required but are expected by employees. Employers in the Netherlands often provide a travel allowance that can go toward a leased car, or pay 100% of an employee’s train or bus fares for commuting.
Additional to the state pension, almost all employees in the Netherlands participate in a private pension through their employer. To learn what Globalization Partners offers, see Pension in the Netherlands.
Deciphering and sourcing these different benefits on your own is often difficult. Instead, you can benefit from the Netherlands benefit outsourcing services. Globalization Partners is here for you every step of the way, and we will make sure you stay totally compliant.
Restrictions for Benefits and Compensation
The most significant restrictions on your employees’ benefits and compensation relate to Netherlands compensation laws and any CBAs. Make sure the benefits you provide meet or exceed the CBA’s requirements. If your industry doesn’t have a CBA, you must provide the minimums guaranteed by law to stay compliant.
Work With Globalization Partners
If you need Netherlands compensation outsourcing services, Globalization Partners can help. We’ll make sure your employees are paid appropriately and fall under a competitive Netherlands benefit management plan. Contact us today to learn more about our different services.