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Working in The Netherlands: job conditions and benefits

by Flitter Fever
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So you had a few job interviews and now even a job offer. The salary looks pretty nice. My advice: do not focus too much on the salary alone. Yes it is important. However, the total picture will make the real difference. Home to work distance, tasks and responsibilities, development opportunities, company culture, team composition… and for sure the job conditions and benefits! The differences can really add up. Curious about common possibilities offered by employers in The Netherlands? Read on.

Conditions & benefits

If you are looking at a job offer, do not focus on the salary alone, but also look at the job conditions and benefits in detail, such as:

  1. Working hours a week and overtime
  2. Vacation days and national holidays
  3. Holiday money
  4. Bonus, 13th and/or 14th month
  5. Pension plan
  6. Lease car
  7. International job

Overall these conditions and benefits are in The Netherlands are above average. There are definitely differences between industries and situations, and some benefits are slimmed down by employers over the last couple of years, yet still at a level that many people around the world cannot even imagine. For example being able to work part-time if you want to and get a tax benefit for dessert. Besides The Netherlands still has the second best pension system around the world.

Salary

Salary depends on a lot of factors, such as age, education, experience, industry, country, etc. In The Netherlands:

  • The minimum wage is gross € 1.594,20 per month (2018).
  • The average income (‘modaal’) is gross € 2855 per month (2018).
  • An income of net € 3500 per month or higher is considered a good salary (far above average).
  • There is a big difference between net and gross. See earlier mentioned paragraph ‘Income tax’ and below net/gross calculation tip.
  • It is not common and considered inpolite to ask friends or family about their salary. Not many people are open about what they make. This is completely different in countries in the Middle East for example.

Also important:

  1. Wondering whether you are asking for, receive or get offered a fair salary? Compare your salary with others in similar profession in the Netherlands.
  2. Curious what you will get on your Dutch bank account after hearing a gross salary indication? Make a gross/net salary calculation here.
  3. Moving to the Netherlands? Make sure you have a realistic understanding of the costs of living in the area where you intent to look for a house. Living in Amsterdam is definitely more expensive than living in east Drenthe or northern Limburg for example. Adjust your salary indication to that. Ask your (potential) employer if they are willing to help you find a house and/or contribute to moving costs.

Overtime

Working fulltime in The Netherlands averagely means 40 hours a week. In some specific professions such as hospitals fulltime can mean 36 hours a week. Do you have to make in reality more hours than that? There are still several companies and industries in The Netherlands that compensate overtime: paid or as ‘time for time’. Sometimes overtime is measured by the minute and/or a certain percentage is paid back (for example hours worked on Sundays for 150% or 200%).

I realize that in many countries it is normal that people work 60-80 hours a week, have second jobs to pay their bills and overtime is expected and never paid a cent extra for. What a difference getting paid for overtime would make? Unfortunately in high skilled and management jobs getting paid for overtime is getting more uncommon every year.

Vacation days

Very important job condition: how many vacation days do you get from your employer? This strongly depends per country, industry and company. In countries where labor unions are big, the conditions of workers such as vacation days are often much better than in countries where being a union member is considered a bad thing.

In the US for example, it is not uncommon to have no vacation days at all when you start; the number of vacation days will increase by the number of years you are with the company. Be picky when finding yourself a job, should you have a choice. If you only have a few vacation days per year, it is unlikely that you will be able to travel a lot.

Large, international companies in growing industries/sectors tend to have more vacation days (to attract more skilled people) than small, domestic focused companies in slower businesses. Governmental institutions tend to have an above average number of vacation days as well. In the Netherlands this can mean a striking difference of (42-20=) 22 vacation days a year.

Based on a fulltime contract, a Dutch employee should get at least 20 vacation days (4 weeks). However, many employers offer more than that. For example I have 33 vacation days, with the possibility to buy an extra week off and get 1 extra day off for every 5 years employed. My boyfriend also has at least 7 weeks of vacation a year. This is not rare in The Netherlands and offers a great opportunity for travel.

National holidays

The Netherlands has 9 national holidays: New Year’s Day, Easter (2), King’s Day, Ascension Day, Whitsun (2), Christmas Day and Boxing Day. These come in addition to the vacation days mentioned. In many other European countries people get more days off, such as Sweden, France, Portugal, Spain, Italy, Belgium, Germany, etc.

Holiday money

In many countries this will be something employees have never even heard of: holiday money. Eight percent on top of your gross salary, it is mandatory by law for Dutch employer, usually paid in May of each year. This is something like an additional 80% of your net monthly salary once a year. And so the Dutchies can book their next holiday. Or get a new car or garden fence, whatever they want to spend it on. Not bad heh?

Bonus, 13th and/or 14th month

Say what?! Yes there is more money to add to the Dutch people’s income. This strongly depends on the company and the annual results. But in The Netherlands many employers offer their (usually higher educated) employees the opportunity to get a bonus and/or even standard get an additional 13th and/or 14th month of salary if the company is doing well and meets the targets. Often paid by the end of the year, not rarely only in March or April once the final accounting results are in the books.

In several positions, especially sales, bonus is based on their individual targets and performance, often paid monthly or quarterly as an incentive to increase their salary. I had this when I was working for an employment agency for several years. These sales bonuses can be based on the person’s individual performance, but also on team or branch results. I liked these bonuses but may lead to jealousy among colleagues.

Several companies also offer people (an) extra month(s) of salary in case an individual employee works there for so many years, to thank them for 12.5 or 25 years of hard work and loyalty.

Pension plan

Having a good pension system and plan means that you will be able to retire on a certain age and you do not lose too much in terms of income. I will never forget the elderly packers at the end of the cash register at the American supermarkets, still having to work in their 70s because apparently they do not have a pension or it is not enough to pay the bills. How the pension works in The Netherlands is too complex to explain all details in this blog, but there are a few basic things to know.

  1. Pension plan participation (thus contribution via gross salary) is mandatory if you work in NL, expect for freelancer and entrepreneurs.
  2. If you switch employers, check the possibilities for pension transfer.
  3. Dutch pension funds send out annual overviews (which is often also available online) so employees get an idea of what is build up and should be expected by retirement age.
  4. There are huge differences between pension plans. Each employer only offers one pension fund, sometimes an additional plan in which for example their high skilled workers can chose their preferred strategy (thus risk) for their stock plan (conservative, progressive). The average pension plan is a mid-wage system (‘midloonstelsel’), which means the pension is based on the average income of the employee over the years. If you are lucky, the employer offers ‘eindloonstelsel’, which means the pension is based on the last income of the employee (usually the highest). What also differs is the contribution proportion employee/employer, which can make a significant difference on the employee’s net monthly income.
  5. The income of retired Dutch people ideally consists of at least AOW (governmental minimum benefit) plus pension (for those who worked themselves and/or their partner). For lower incomes also healthcare subsidy (‘zorgtoeslag’) and/or rental subsidy (‘huurtoeslag’). The average Dutch person doubts whether there still will be AOW 20 years from now, who knows?
  6. The retirement age in The Netherlands will be increased to 67 by 2021 due to increased life expectation (81 years). Those who can afford it, can retire earlier. In many southern and northern European countries this is lower (usually 65).
  7. Nevertheless, The Netherlands still has the second best pension system worldwide.

Lease car

One very interesting potential job benefit can be to get a lease car, most common in field and higher level positions. A lease car opens up a whole new world of travel opportunities (read: road trips). Certainly, a lease car is not for free, it can actually be quite costly. Having a lease car in The Netherlands will mean that you will have to pay tax over the new value of the car, even if the car is already 3 or 5 years old. EUR 1000 per month or more is not uncommon.\\

So if you get the opportunity to get a lease car in The Netherlands, you better chose it wisely and calculate what it will cost you net per month. Compare with the costs of a car owned by yourself. Does the company allow unlimited gasoline usage, also abroad? Which brands can you chose from? Does the employer pay for all or only a limited number of extra options?

You might not want to choose the very smallest car if you want to use it for international road tripping, especially if you have a family. On the other hand the largest car with a thousand of different extra options might not be necessary either (too expensive). I tried to find myself a lease car with a value below EUR30K and with 21% or less additional tax, so costs would stay within the beneficial range. Check with your employer whether they will charge the lease car tax via your monthly salary or not, to avoid an unpleasant surprise with your annual income tax declaration. Estimate your lease car tax addition.

What I like a lot about having a lease car is that it avoids the risk of costs for maintenance and repair. The lease price is what you will pay, not a penny more. For a few hundred euro a month, a lease car might enable you to take multiple long distance road trips to countries that are on your to-see-list! What will that save you on flight tickets and rental cars per year? For example earlier this year we went on holidays to Croatia, drove 4500 km and did not pay anything extra for the gas.

Other transportation

If a lease car is not an option or not something you want, check the possibilities for public transport and/or bike compensation. Some companies provide public transport subscriptions at their expense. Do you have to travel by your own car? The tax free amount employers are allowed to pay is EUR 0.19 per kilometer, for home-work distance and from work to business meeting for example. This should be described in your contract or collective agreement (CAO). Calculate how much travel compensation is normal. If your employer does not compensate your travel expenses, make sure your tax advisor reports this in your annual tax return.

Parking

Companies usually also compensate occasional parking costs, but usually do limit or not compensate parking costs with a more frequent or very expensive character, such as parking your car in front of your house in Amsterdam or short term parking at Schiphol airport (go by train or choose cheaper long term parking).

Income tax

Knowing how much income tax you will pay is one of the most important topics since this will directly influence your income. However this is also one of the most complex things to explain for the Netherlands, next to pension. For expats it is relatively easy: you pay 30% tax. This regulation is under discussion but is still effective and a big benefit compared to locals. Dutch citizens pay 36-52% income tax over their salary. Not joking.

Feminine society

In return the Dutch government takes care of a lot of things like infrastructure, education, social security (such as unemployment benefits, welfare, handicapped, elderly), basic healthcare, subsidies for culture, arts, nature and lower incomes (healthcare, social rental), etc.

The Netherlands is still a so-called feminine society (Hofstede), in which the government is taking care of the people. This is even stronger in Scandinavia. In The Netherlands this seems to change over the years, moving more and more responsibilities towards the people (which is normal in a masculine society like the USA) since those benefits cost a lot of money and the government must make tough choices.

Type of contract

What type of contract is the company offering? In high skilled jobs it is pretty common for Dutch employers to get a one year temporary contract first, including a one month trial period. The trial period (‘proeftijd’), in which both employee and employer can say goodbye any day, is limited by law. In exceptional cases an indefinite contract (‘onbepaalde tijd’) is given immediately, but more commonly this is offered after one or two years, if you function well.

Temporary employee

If you work via a temporary employment agency (‘uitzendbureau’) the contracting process and payment of salary works a bit differently. The agency is your employer and not the company you actually work at. The company pays the agency and the agency pays you. This is one way for companies to find good employees. Or to keep a ‘flexible shell’ for example due to seasonal or other peaks, cover maternity leave, etc.

The agency does the vacancy advertising, recruitment, selection and for higher educated positions often also assessment. Often temps can be taken over by the company after 1040 hours (6 months of 40 hours a week). But this is definitely not always the case, so check this in advance to avoid unpleasant surprises. Working as a temp can definitely be a step towards finding permanent work, or to try different things. A good temporary employment agency will help finetuning your CV and make a good match between you and their clients.

To protect flex workers for misusing the construction to keep some workers flexible by contract forever, the rules have changed over the past few years. Also if you work for a temporary employment agency you have the right to get a permanent contract after a number of years, unless there is a break in between of at least three months. Working at the same company via different agencies in a row counts as one contract.

When working for a temporary employment agency you also save for vacation days, holiday money, etc. Your gross salary should be the same as comparable direct employees (background, age, experience, etc.). Reliable temporary employment agencies and recruitment agencies include for example: PDZ, Manpower, Olympia, Randstad, Adecco, Tempo Team, Brunel and Yacht.

Mortgage

Explaining the whole process around mortgage and buying a house in The Netherlands goes too far for this blog. But I would like to spend a few lines on things that are important in relation to work. If you want to buy a house in the Netherlands it is important that:

  • at least one out of the two of you has a permanent (indefinite) contract, and/or
  • savings on a Dutch bank account, and/or
  • a signed intention declaration from the employer (confirming the intention to give a permanent contract at some point if you continue to function well)

Contact a reliable agency or bank to seek advice about your possibilities. Usually you can loan about four times your gross annual salary. However, take into account you will have to pay some things immediately once you get the key (about 5%). Commercial rental agencies often set rules and requirements similar to mortgage providers.

Job search tips

You like The Netherlands so much you are thinking about looking for a job and moving? Some basic tips.

  1. Good websites for finding the mid and high skilled vacancies are: LinkedIn, Indeed, Monsterboard and Nationale Vacaturebank. These are the traditional, well-known channels, there are many others that usually aim at certain specific industries. The websites of companies can also be a good source to find vacancies.
  2. Make sure your CV stays within the normal range according to the Dutch standards. For tips check out the website of carrieretijger.nl for example (sorry all in Dutch, just use automatic translation in Google Chrome browser). For creative job applications you can give yourself a bit more freedom.
  3. If you want to switch industries or want to take a step down on the career ladder, consider leaving certain things out, summarize and/or focus on competences in your CV. Filtering and matching are key.
  4. It is possible to have your foreign diplomas valued and/or acknowledged by a licensed Dutch institution. For example for medical jobs this is mandatory. For more information on diploma valuation or validation go to this website.
  5. Your job chances increase when: holding a bachelor or masters degree, ability to speak/write/read/understand Dutch and expertise in a field with high demand (technical, IT, medical, etc.).
  6. Considering applying for an international job? Read my earlier blog post about the pros and cons of an international job.

Do you have any more questions? Please feel free to leave a comment below and I will do my best to reply as soon as possible.

This blog post is a bit of a side step from my usual travel blog posts, intended as an in-depth article linked to the blog post How come Dutch people travel so much? 

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