If you’re employed, your employer should be providing you with payslips. All the technical information included on a payslip can feel overwhelming at first glance, especially if you're not native to the country you're employed in. In this lesson, we'll break down the most important things to know about a Dutch payslip, for expats working in the Netherlands.

Base salary

Your base salary is the amount you would earn if you worked 40 hours per week. If you work full-time, this is usually the same as your agreed salary.

Part time %

In the Netherlands, it's quite common for people to work part time contracts. If you work fewer than 40 hours per week, your payslip shows the percentage of a full-time schedule that you work. For example, 80% corresponds to a 32-hour contract.

Gross salary

Your gross salary is everything you earned during that pay period: regular wages, allowances and any additional payments such as overtime. No deductions have been made yet.

Wage tax (Loonheffing)

Wage tax is the amount your employer withholds for income tax and mandatory national insurance contributions. These contributions fund:

• the State Pension (AOW)

• the Surviving Dependants scheme (ANW)

• long-term care (WLZ)

Your employer deducts this automatically so you don’t have to transfer taxes yourself later. This system prevents large surprise bills and ensures contributions are paid on time.

Most employees also receive a wage tax credit (loonheffingskorting), which reduces the amount of tax owed on their salary. When you file your annual income tax return, you can check whether too much or too little tax was withheld.

Special payroll tax rate (bt)

If you receive additional income — such as holiday pay or overtime — payroll tax also applies to that amount. A higher rate is often used because the payroll tax credit does not apply to this additional income. This is known as the special rate (“bt”).

Pension scheme

Some employers offer a workplace pension scheme. Through this, you build up pension income for later in life. Both you and your employer contribute. Your contribution is deducted from your gross salary and paid into a pension fund. Because this contribution is taken from your gross salary, your taxable income is reduced. You do not pay income tax on the amount set aside for your pension.

Net salary

Your net salary is what remains after taxes and contributions have been deducted from your gross salary. This is usually the amount transferred to your bank account, although additional deductions (such as a lunch contribution) or reimbursements (such as travel expenses) may slightly change the final amount.

Takeaways

• If you are employed, your employer should provide you with payslips
• Your gross salary is the total amount you earn from your work
• Your net salary is what remains after all taxes and contributions have been deducted from your gross salary