Payslip in the Netherlands: How does it work?
Reading a Dutch payslip (loonstrook) for the first time? You probably wonder why Dutch people have to use such complicated wordings! Although payslips in The Netherlands may differ from structure, they basically always contain the same elements. Parakar explains how to read a Dutch payslip.
Dutch employers are obliged to issue a payslip to employees for every change in the amount to be paid which means that you must receive a payslip at least once a year. With variable wages, you must receive a payslip per period. Many collective labour agreements state that a payslip is provided with every wage payment.
Abbreviations on your payslip
ZWV, WIA, WW, SV: The many abbreviations for Dutch acts regarding social insurances on a payslip can get you easily confused. Let’s start by explaining the employers’ statutory contributions to these acts that often appear on a payslip. This will make it a lot easier to understand.
- ZWV = Health Insurance Act
- WW = Unemployment Insurance Act
- WIA = Incapacity for Work Act
- ZW = Sickness Act
- ANW = Surviving Dependants Act
- AOW = General Old Age Pensions Act
- ZW = Sickness Benefits Act
To keep things simple, we have divided the Dutch payslip into three parts. We’ll talk you through which information you can find in every part.
1. Top of the Dutch payslip
The payslip starts with some basic information. You can find the name and address of the employee on the left and name and address of the employer on the right. The following part contains more data about the employee. Apart from the date of birth, job function, and the date on which the employment started, this table contains the following information:
- Pers. Nr: The number of the employee within the company
- BSN: This is the Citizen Service Number or personnel number of the employee such as the function
- Burg. Staat: Marital Status
- Parttime %: The number of hours the employee works per week divided by the number of hours per week that applies to the employer or to the applicable Collective Labor Agreement.
- Uurloon: The hourly salary. The gross salary divided by the (average) working hours of the relevant period
- Minimum loon: The legal minimum wage applicable for the employee
- Kleur/Tabel: Here is indicated according to which tax table the payment is calculated. ‘Wit’ means white, this applies to wages from current employment.
- LH/LHKorting (Payroll Tax Credit): Payroll tax credit is taken into account when calculating the tax. This is a discount on the wage tax/ national insurance contributions that the employee pays.
- ZWV/WW/WIA:This indicates whether you are insured under social insurance laws. (ZWV = Health Insurance Act, WW = Unemployment Insurance Act , WIA = Incapacity for Work Act, ZW = Sickness Act).
- Jaarloon BT: This is the fiscal annual salary for the previous year. If you enter employment in the course of a year, your starting salary is converted into an annual salary.
- Tarief BT (Rate percentage): With this percentage, the payroll tax is calculated on special remuneration, such as holiday allowance or a bonus. The rating percentage is derived from the annual wage for special remuneration and can include the settlement percentage withholding tax credit.
- Dagen tijdvak: The period over which the salary is calculated (month, day, four weeks, week, or quarter)
- Dagen gewerkt:The number of days the employee worked this period
- Verloonde uren: The number of hours the employee gets paid for
- Auto v/d zaak: Company car
- Cat. Waarde: The catalog value of the car
2. Middle part of the Dutch payslip
The middle part of the payslip shows exactly how the net salary is calculated. The amounts in the column Inhouding show whether a certain wage component is part of the salary on which the employee pays payroll taxes, and in the column SVW you can see which part the employer has to pay in terms of employee insurance contributions.
- Bruto: This holds the employee’s gross period salary and extra costs such as tax addition for a company car and the withholding of pension. The pension premium, premium for retirement, and partner’s pension is deducted from the bruto/gross salary. All deductions and contributions after this will be calculated from the net salary.
- Werknemer Verzekering (Employee insurance): All employers pay employers’ social contributions on the wages of their employees. With these premiums, they ensure the employees against, among other things, the financial consequences of unemployment and incapacity of working. Employers may deduct a maximum of half of the WGA-premium from the employees’ net salary.
- Loonheffing (payroll tax credit): This is the discount on income tax and national insurance contributions. If the employee has multiple jobs: you can only get this credit at the employer where you get the highest salary.
- Declaratie onkosten: In this part, you can find variable costs, such as declaration expenses that fall under net salary.
- Totalen: The total paid (net) salary
- Betalen: Information on the bank account where the net salary is deposited.
3. Bottom of the Dutch payslip
- Reservering: All reservations that are added on top of the wage.
- Vakantiegeld: This is the cumulation of the holiday allowance that is already saved. The holiday pay is stated in euros. It’s normally automatically paid in May or June.
- Fiscaal loon: The wage stated on the annual statement and on which payroll taxes are calculated. The gross salary, together with the reimbursement Health Insurance Act, forms the taxable salary. Wage tax and national insurance contributions are paid on this amount.
- SV/ZVW/WW/WAO Loon: These amounts are the wages on which employees pay taxes and social insurance contributions.
- Arbeidskorting (Employed person’s tax credit): Employees get a discount on the payroll tax, also called a payroll tax credit. One of these is the employed person’s tax credit. It is therefore not a deduction but a discount for employees.
How can we help you?
Do you need help reading or drafting a payslip? Or are you looking for payroll solutions in The Netherlands? Our HR experts in the Netherlands are happy to support you. Contact us and we will get in touch with you as soon as possible!