Employee Benefits In The Netherlands: A Complete Guide

Finn Bartram

on May 7, 2025

QUICK SUMMARY

Understand the key elements of employee benefits in the Netherlands, including sick pay, parental leave, pensions, and strategies to create competitive packages for top talent.

TABLE OF CONTENTS Eligibility for Statutory Benefits Statutory Benefits Overview Leave Entitlements Supplementary Benefits Taxation of Benefits Setting Up Benefits Getting Help with Benefits

Known for its progressive societal values, the Netherlands prioritizes worklife balance (they have one the shortest average workweeks in the world) and employee wellbeing.

These priorities are reflected in both statutory and voluntary benefits, including pretty generous PTO and holiday allowances as well as sick pay.

Trade unions are also strong in the Netherlands, with three major federations that play a crucial role in negotiating Collective Labour Agreements (CAOs) with employers and organizations that make some benefits mandatory.

So, as an employer who wants to leverage the Netherland’s educated and creative workforce, it’s important to know what’s required and the kinds of additional benefits that would be most coveted by talent there.

In this guide, I’ll delve into employee benefits in the Netherlands, including eligibility, what’s mandatory, and additional benefits to help your company stand out.

Who Qualifies for Statutory Benefits in the Netherlands?

In the Netherlands, statutory employee benefits are typically available to workers with standard employment contracts, including full-time, part-time, and fixed-term roles.

These employees are integrated into the Netherlands’s social security system, granting them access to benefits such as health insurance, pension plans, and unemployment insurance.

Eligibility for these benefits generally begins from day one of employment, provided the employee's income exceeds a certain threshold.

For more detailed information about statutory benefit eligibility, you can visit the Netherlands Social Insurance Bank (SVB).

Who Is Excluded?

Certain categories of workers are excluded from full statutory benefits:

Freelancers and Contractors: Typically responsible for their own social insurance.
Low-Income Workers: Those earning below national thresholds may have limited or no benefits.
Interns and Agency Temps: Eligible under specific conditions, often receiving partial benefits.

Exceptions or partial entitlements may exist, such as limited benefits for low-income workers. For comprehensive details, refer to the Dutch Ministry of Social Affairs and Employment.

Statutory Employee Benefits in Netherlands

Understanding and complying with these statutory benefit requirements in the Netherlands is crucial for employers as non-compliance can lead to legal repercussions, financial penalties, and damage to a company's reputation.

Here's a list of mandatory benefits that employers must provide:

Health insurance (Zorgverzekering): All employees must have health insurance, which is partly funded by employer contributions and ensures access to healthcare. The amount is 6.68% of an employee’s gross salary (up to an income ceiling of approximately €66,956 in 2025).
Paid parental leave (Ouderschapsverlof): Parents are entitled to paid leave to care for their children, receiving pay for 9 of the 26 weeks.
Vacation days (Vakantiedagen): Employees are entitled to a statutory minimum of vacation days, calculated using total hours worked per week.
Holiday allowance (Vakantiegeld): An additional payment, usually 8% of annual salary, is provided to cover holiday expenses.
Sick leave compensation (Ziekteverlof): Employers must provide compensation for employees unable to work due to illness, ensuring financial support during recovery.
Social security contributions (Sociale Zekerheidsbijdragen): Contributions to social security cover pensions, unemployment, disability, and other welfare benefits. These equate to approximately 18–23% of an employee’s gross salary.
Occupational health and safety compliance (Arbowetgeving): Employers must ensure workplace safety and compliance with health regulations.
Minimum wage (Wettelijk Minimumloon): Employers must pay at least the legal minimum wage (€ 10,48 per hour for those over 21) ensuring fair compensation for all employees.

Again, for more information, you can refer to the Dutch Ministry of Social Affairs and Employment.

Leave Entitlements in the Netherlands

The Netherlands offers generous leave entitlements, protected by law to ensure employees can balance work with personal and family needs. These national leave policies are well-structured and enforced to promote employee well-being.

Annual Paid Vacation (Vakantiedagen): Employees that work 40 hours per work are entitled to at least 20 days paid vacation per year, those at work less are entitled to less.
Public Holidays (Feestdagen): While not mandated by law, most employees receive paid leave for national holidays, supporting cultural and family observance.
Sick Leave (Ziekteverlof): Employees can receive up to two years of sick leave, with compensation typically at 70% of their salary, ensuring financial support during illness.
Maternity Leave (Zwangerschapsverlof): New mothers are entitled to 16 weeks of paid leave, providing essential time for recovery and childcare.
Paternity Leave (Vaderschapsverlof): Fathers are granted one week of paid leave, with the option for additional unpaid leave, promoting family bonding.
Parental Leave (Ouderschapsverlof): Parents can take unpaid leave of up to 26 times the weekly working hours, allowing for greater involvement in their children's upbringing.

Supplementary Benefits (Not Required But Used To Attract Talent)

In the Netherlands, numerous benefits, while not legally required, are commonly offered to enhance employee satisfaction and boost recruitment and retention.

Private pension plans: While it's difficult to provide an exact number of companies offering private pensions, it's estimated that around 90% of employers offer occupational pension schemes. Employees and employers pay the contribution agreed in collective employment agreements into a pension fund the employer is affiliated with. This may be a pension fund for all businesses in a particular industry, a fund that works for one specific company, or a fund for a group of people working in certain (often medical) professions.
Supplemental health insurance: Additional health coverage beyond the mandatory insurance e.g. dental or vision care, physiotherapy sessions, mental health support and preventative care (such as annual health check-ups, vaccinations, and wellness screenings).
13th Month Salary: In the Netherlands, a 13th-month salary, often referred to as an end-of-year bonus or a 13th month pay, is a discretionary extra payment given to employees. It's typically equivalent to one full month's gross salary and, while not a legal requirement, it’s commonly offered. While some collective labor agreements may mandate it, it's generally a company-wide benefit.
Travel expenses: It’s common for employers in the Netherlands to reimburse workers for travel expenses for commits of more than 5 kilometers.This can be covering the price of public transportation (tax free) or employers may also reimburse employees if they are traveling in private vehicles. The Tax and Customs administration has set this limit to 0.23 euros per kilometer tax free.
Remote work expenses: Dutch labor law recognizes that employees who work remotely incur additional costs, such as for heating, water, and yes, even coffee, so employers can reimburse these costs tax-free through a working-from-home reimbursement allowance, known as thuiswerkvergoeding, which is EUR 2.40 per day as of 2025.

How are Employee Benefits Taxed in the Netherlands?

In the Netherlands, employee benefits are subject to taxation under specific rules set by the Dutch Wage Tax Act (Wet op de Loonbelasting). Here's a breakdown of how different benefits are typically taxed:

General taxation framework

Employee benefits in the Netherlands are generally treated as wage (loon) and are therefore subject to:

Wage tax (loonbelasting)
Social security contributions
Health insurance contributions (Zvw)

Employers are responsible for withholding these taxes from the employee’s paycheck.

The WKR allows employers to provide certain tax-free benefits, allowances, or gifts to employees up to a capped free space (vrije ruimte). In 2025, this is:

1.92% of the first €400,000 of fiscal wages, plus
1.18% of the amount above €400,000.

If the total value of benefits exceeds the free space, the employer pays an 80% final levy (eindheffing) on the excess.

Examples of benefits that can fall under WKR:

Company outings
Christmas gifts
Reimbursements for home office expenses
Equipment (e.g., laptops, phones) used for work.

Taxable vs. Tax-Free Benefits

Benefit Type	Tax Status
Company Car (for private use)	Taxable; subject to additional income (bijtelling)
Travel allowance	Tax-free up to €0.23 per km (2025); excess is taxable
Meal allowance	Often taxable unless conditions for tax exemption apply
Health insurance contributions	Employer-paid premiums are taxable
Stock options	Taxed at the moment of exercise (unless deferred under startup schemes)
Housing allowance	Generally taxable as part of income
Educational reimbursement	Tax-free if job-related
Pension contributions	Generally tax-deferred (not taxed until retirement)

Expat consideration: The 30% ruling

Qualified expats may benefit from the 30% ruling, which allows employers to pay up to 30% of gross salary tax-free to cover extra-territorial costs. This reduces the taxable base and can significantly lower the overall tax burden.

Reporting obligations

All taxable benefits must be reported to the Dutch tax authorities in the payroll administration (loonadministratie) and annual income statements (jaaropgave).

How to Set Up and Manage Employee Benefits in Netherlands

Setting up and managing employee benefits in the Netherlands requires a strategic approach to ensure compliance and competitiveness. Here's a step-by-step guide to help companies establish and administer effective benefits programs:

Partner with local benefits providers: Collaborate with local insurance and benefits providers to offer competitive packages that align with Dutch standards and employee expectations.
Ensure compliance with regulations: Familiarize yourself with the guidelines set by The Ministry of Social Affairs and Employment to ensure all statutory benefits are correctly implemented.
Utilize EOR services: Consider partnering with an Employer of Record (EOR) service in the Netherlands to manage compliance and administrative tasks, allowing you to focus on core business activities.
Communicate benefits to employees: Clearly communicate the benefits offered to employees through onboarding sessions, employee handbooks, and regular updates to ensure transparency and understanding.
Monitor and update benefits offerings: Regularly review and update benefit offerings based on usage data, employee feedback and industry trends to maintain competitiveness and employee satisfaction.

By following these steps, companies can effectively manage employee benefits, ensuring they remain compliant while attracting and retaining top talent. Utilizing EOR services can further simplify the process, allowing businesses to focus on growth and innovation.

Get Support Setting Up Benefits in Netherlands

In the Netherlands, offering the right employee benefits is crucial for compliance and attracting top talent.

Aligning your benefits with legal requirements ensures you avoid penalties, while meeting employee expectations boosts satisfaction and retention.

By understanding statutory benefits and offering additional perks, you can create a competitive and appealing workplace. Staying informed about local employment laws and regularly updating your benefits package is essential for success in the Dutch market.

Partnering with an Employer of Record is the easiest way to get support with managing international benefits.

Here's a list of trusted Netherlands EOR providers to help you get started.

Deel — Best for offering local health benefits to Dutch EOR employees
RemoFirst — Best for budget-conscious remote team expansion
Omnipresent — Best for hiring without setting up a local entity
Skuad — Best for hiring and paying talent in the Netherlands
Remote — Best for competitive benefits packages
Atlas HXM — Best EOR partner for enterprise organizations
Rivermate — Best EOR service for European client companies
Velocity Global — Best for navigating complex regulatory landscapes
Mercans — Best for an advanced EOR management platform
NNRoad — Best EOR service for relocating employees to the Netherlands

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