In the Netherlands employers must pay their employees at least the statutory minimum wage and the statutory minimum holiday allowance. The minimum wage consists of a basic wage and various allowances, such as for shift work and irregular working hours. It applies to all employees of 23 years of age and over. In case your organisation has a Collective Labour Agreement (CLA) per company or is part of a CLA per Business Sector, more information about wages and employment conditions are included in this agreement.
Minimum wage in the Netherlands
The legal minimum wage [minimumloon] in the Netherlands is based on age and is revised every six months in line with inflation. The minimum wage is based on a full-time employee working between 36-40 hours a week. To review the minimum wage (only in Dutch language), please check here.
Salary and 8% Holiday Allowance
By Dutch law, every employee is obliged to receive a 8% holiday pay over the previous 12 months regular gross salary earned. The definition of the gross salary for holiday allowance calculation is the gross salary including overtime pay, but excluding benefits (bonus, allowances etc.). Pay out to the employee has to be by minimal 1 instalment per year. In general the holiday allowance is paid in May, sometimes in June.
Therefore, if a gross monthly or annual salary is agreed with an employee that is subject to Dutch legislation, then on top of this gross salary comes 8% holiday allowance. Please make sure in the employment contract you will make sure if the salary is including or excluding the 8% holiday allowance. Without this stated, the employee is still entitled to the holiday pay, despite possible agreements.
Please note that 8% holiday pay is different than holidays. Holidays can be build up by the employee during the calendar year, however, when the years finishes, the employee should have used these holidays or will soon use the holidays, otherwise the holidays can expire. Read more about holidays on the Leave of Absence page.
Collective Labour Agreements
There are two types of Collective Labour Agreements; The Collective Labour Agreement per company and the Collective Labour Agreement per Business Sector. The Collective Labour Agreement (CLA) is a collective agreement between the employer (or the employers’ organisations) and Trade Unions regarding wages and other conditions of employment. The government is not a party to these agreements.
A CLA can be concluded per company and per business sector and employer must apply a CLA:
- if the employer has concluded it with the trade unions yourself;
- if the employer is a member of the employer’s organisation that has concluded a CLA
- if the Ministry of Social Affairs and Employment has declared a CLA binding per employer’s business sector
Deviations from a standard CLA are not allowed. To review if your organisation has a CLA, please review (only in Dutch language) here. Read more information about the rules, taxes and subsidies per Business Sector provided by the Dutch government.