Pensions in the Netherlands * Salary

Together Abroad14-04-2017 12:03 PM
There are not many people who will be able to explain in detail how pensions work. Among many adults it is an abstract concept that is to be tackled a few decades down the road. I have to admit, I am not an exception. Once in a while, the topic resurfaces. Usually it is a letter from my employer informing me about the current affairs. I often start reading it only to lose interest after finishing the third paragraph. With the nearing elections, pensions and the age of retirement (AOW leeftijd), which is 67 years and three months at the moment, these are all hot topics again.

But how does a pension work? And is it something worth putting time and energy into at this moment?

Three Pillars

Drop the word AOW and most people will associate it with pension. But there are more pensions that may apply to you or that you wish to have. The Dutch pension scheme consists of three pillars. Not all of them necessarily apply to everyone automatically.

State Pension

Everyone living or working in the Netherlands is entitled to a state pension. This is called the AOW (algemeen ouderdomswet). Currently, when you reach the...
327views
No reactions
Together Abroad03-04-2017 10:46 AM
Good employers will know when your salary should increase as a reward for great work. Sometimes, however, you might feel you are due a pay rise that has not arrived. Asking for a raise can be a tricky conversation. For example, you do not want to come across as too arrogant or demanding, nor give the impression that you are ungrateful. Sometimes the response to a raise will be a ‘yes’ or ‘no’ regardless of how you present your case. If your boss is open to persuasion, however,good preparation and research can make all the difference.

The first and most difficult step in asking for a raise starts by approaching your boss in the first place. This can be more difficult as an expat, as perhaps the corporate culture is different than you expect in your own country.As Diana Faison, a partner with leadership development firm Flynn Heath Holt Leadership, puts it: “You want to be able to demonstrate how you add value and how you have made a difference to the company”. Putting yourself in the shoes of your boss will help you decide on what you should include in your argument.

Get to grips with the facts. See...
399views
No reactions
Together Abroad31-01-2017 12:27 PM
Working in another country comes with several adjustments, including differences in salaries, currencies, and benefit expectations. An appropriate salary in one country may be drastically below the cost of living in another and weighing that out can be confusing. As an expat, it is important to know what should be expected when working in the Netherlands and what is open to negotiation before signing a contract.

Salary will always be dependent upon age, position, and experience and thus will vary for each person. This is especially true for expats and those hired as highly skilled migrant workers. This usually puts the employee in a well-paid position,however it may be much different than what was earned in your home country. To set expectations, the average income for a full-time employee in the Netherlands from ages 25-30 is about 30,800 Euros annually. This goes up to 41,100 Euros from ages 45-55 and unless you have a highly specialized position, it does not vary much.

Additional benefits include holiday equivalent to 8% of salary, possibly car and phone paid for, or performance based bonuses. Expats can get even further benefits by taking advantage of the demand for highly skilled workers. A highly skilled...
1775views
No reactions
Together Abroad06-11-2016 10:24 PM
Myth #1 –“A Salary Is A Fixed Amount” vs. “You Can Always Negotiate”
The truth is somewhere in the middle and which one applies to your situation depends mainly on the industry you work in. Many employers categorise their employees strictly in grades and tables, so there might be less wiggle room than you think. However, sometimes you can persuade you future employer to rank you a grade or two higher.

Myth #2 - A Beginning Salary Is Just a Start
While that may be true, most raises constitute a percentage of your current salary. So if you accept a lower salary without negotiating,you may be regretting it every time you get a raise.

Myth #3: Companies Will Be Offended If You Negotiate
That is not likely to happen as long as you negotiate in a business-like manner and are being realistic about your expectations. Know your market value and assume that the hiring manager knows it too.

Myth #4: You Lack the Necessary Information to Negotiate
Maybe, but that does not mean you cannot acquire it. There is a great array of websites that can tell you the average salary of professionals with your parameters.

Myth #5: What You...
1312views
No reactions
Together Abroad03-10-2016 9:30 AM
       This benefit has been put in place in order to attract foreigners with specific sets of skills that are not common among applicants on the Dutch job market, and its aim is to compensate some of the expenses related to relocation. Effectively, it makes up to 30% of your taxable salary non-taxable. Plus, you can exchange your foreign driver’s licence for a Dutch one without having to take any additional lessons or exams. In order to benefit from it, you will have to meet certain requirements.
        Who Is it for?          The main condition is that the eligible expat must be an employee hired or transferred from abroad to work in the Netherlands. Also, “from abroad” is further specified as not having lived within 150km distance from the Dutch border for two years prior to starting employment in the Netherlands.
       Because the 30% facility benefit is aimed at candidates with skillsets that are rare in the Dutch market, prior to 2012, expats had to prove that they possessed required education and expertise. Since 2012, there is a minimum salary requirement, which effectively replaced the obligation to prove desired expertise. The required salary changes every year. Minimum required taxable...
1231views
No reactions
Together Abroad12-09-2016 11:24 AM

Discussing about salary is a sensitive topic to bring up for most people. A negotiation about salary is a private matter, depending on what job you have. This makes it “easy for people to be underpaid, as nobody will really know what you earn apart from the employer and employee” (Ryan, Forbes). Some jobs might not have enough money to really compensate workers and the work they have done.

While at other times, the company might not realize how much work employees have so as to make a higher deserved pay. Situations like these are often difficult to address to employers, as it may be construed in a negative way. While every company has a different way to really justify how much employees earn, there are common signs of being underpaid that can be seen by employees in general. Here are 5 major signs of being underpaid:

1) Increase in responsibility, but not in salary.

This can be considered as an obvious sign of being underpaid. It is always important for employees to keep an overview on the responsibilities they have in their workplace. If employees were to take new and different roles, but not get a chance to discuss...
1269views
No reactions
Together Abroad01-08-2016 11:56 AM

You have searched, sent CV’s, and been interviewed until your brain hurts, and now you have finally secured the perfect job. Congratulations! After the excitement wears off, it is time to start going over the contracts and salary, which can be a bit overwhelming. Along with the payment you will receive, comes several benefits that the Dutch Labour Laws provide. These are agreed upon through Collective Bargaining Agreement (CAO) between employers and various trade unions. It is important to go over your contract before signing to ensure everything iscorrect, and to consult legal counsel if anything stands out as a concern. Here are some benefits that should be expected within your contract according to Dutch Law:

Healthcare Allowance: Everyone in the Netherlands is required to have basic health insurance, with expats given a time limit of four months to get this set up after moving. Your employer should pay for a part of it, and the nominal fee (the other part), will be paid by the employee. Usually you can expect around €100 a month for a basic package.

Holiday: Dutch law requires employees to receive at least 4 weeks (20 days) of paid holiday per year, though most companies...
1401views
No reactions
Together Abroad04-07-2016 9:45 AM

Brutto(gross) salary is best defined as the sum of salary before the deduction of tax and insurance(s). Netto(net) salary is the result of initial pay including tax and other sorts of deductions made. These deductions depend on local/national legislation where employees are required to pay certain amounts of tax to the government.

This could be an example of what the salary slip would look like:

Earnings of March 2016: 2,000EUR
Bonus: + 150EUR
= 2,150EUR
(This would be considered the brutto salary)

Deductions:
Payroll tax with discount: 236,33
Special payroll rate – 5,62
11,11% Pension rate – 158,28
8,99 % Extra pension add on – 0,00
0,414 % Insurance – 11,18
0,285 % Insurance – 5,65
0,11 % Insurance – 2,18
= 419,24

Subtotal (2,150 – 419,24) = 1730.76

Traveling costs (home to workplace): 2 x 15 km per day+ 123,50
Representing the company cost: + 25

Total netto earnings: 1,879,26 EUR

The aspects of deduction will always depend on the terms and agreements the employee makes with the employer. Most companiesin the Netherlands, for example, would follow the guidelines of the CAO (CollectieveArbeidsovereenkomst), which is an agreement between the government body, the employees union and the employers union regarding...
1780views
No reactions
Together Abroad27-06-2016 12:52 PM
As of 2016 onwards, employers and Labour Offices should include the taxes on special allowances such as holiday pay, bonus or the 13th month in a different way. This makes the net wage different from what people were accustomed to.
Employers and Labour Offices are taking the tax on the wages of their employees or beneficiaries, and then paying it to the tax authorities: the payroll tax. Withholding income tax is done according to certain tables.
As holiday pay or other special remuneration is paid at once, the employer or benefits agency will withhold deductions, same as of the monthly salary or benefits. From 2016 the employer or benefit agency could, for this purpose, use the table for special benefits. This table takes in consideration that the labour tax creditdepends of the income.
Because the payroll tax about holiday and other special allowances has changed, a different amount of tax is paid now:
With an annual income of about €18,000 you pay less tax and you get more vacation pay.
If the annual income exceeds €18,000, then you pay more tax and you get less vacation pay.
There is also less difference between the payroll tax that the employer retains...
742views
No reactions
Together Abroad01-02-2016 3:42 PM
Individuals can find it as hard to move from a low paying job to a sustainable and better paid job, as to move from welfare into work. For many, being stuck in a job with little prospect of progression can be very difficult to find ways to move on and move up. We agree that giving people the opportunity to use their potential in employment is important. However, this is often linked with greater duties and responsibilities for employees when looking for a new job that can secure a higher salary.

The issue is simple and clear; this can have a severe consequence on the progression of salary in a career. It is the conventional practice to hire most new people into their jobs at a level of salary below their market midpoint which is indicated by the average ranges of salaries for the given position. The company then moves their salary grade structures maybe half as much as the anticipated general market movement each year. This means that over time, employees tend to see a decrease in the growth of their salary if they stay with a company. This is made worse, as moving to a new job does...
840views
No reactions
It has been a long journey since I arrived in The Netherlands, and I want to thank you for being available to receive me, believing in my profile and thank you for all your support, and I express my wish to keep our contact. I followed all your guidelines and recommendations, and I succeeded! Thank you for your best attention, let's keep in touch

Helder Costa

I would like to thank you for your great job to make my CV presentable and truly reflecting my knowledge and experience.
With your highly professional advices and support I felt more confident and eventually I got a job.


Tanya Pelser

Thank you to both yourself and Irina for a great workshop this morning, it was refreshing to hear some really basic ideas for the Dutch employment search which I'm sure will help start everyone off on a new career path! I will definitely be using the services of Together Abroad and one of my first actions is to revise my CV and submit this for a review.

James Stopford