Use this Asinta insight guide to get the basics on benchmarking employee benefits in the Netherlands. Inside the report you’ll find mandatory and common, supplementary employee benefits information detailed by employee segment. Typical benefit designs and costs are included as well.
Key insight: retirement benefits matter most to employees in the Netherlands
The Netherlands has a comprehensive system of social security insurances and benefits. As part of the employment terms and conditions, employers offer supplemental employee benefits on top of the government arrangements. Most employees in the Netherlands receive coverage through collective labor agreements (CLA), mostly at industry level. For the question whether a CLA is applicable to the company, the scope of the business activities of the respective company are relevant.
If Collective Labor Agreements (CLAs) do not contain any mandatory arrangements, Defined Contribution (DC) pension schemes are the usual choice here.
- In DC schemes, employers make available an annual contribution to employees for the purpose of accruing a pension. The defined contribution depends on the age and salary of the individual employee.
- What is known as the AOW-franchise is a salary deduction (in 2020, at least € 14,167). What remains is the pensionable amount.
- Subsequently, the defined contribution calculation multiplies the premium percentage by the pensionable amount. The premium percentage bases uses a graduated scale for contributions (selected by the employer).
- The pension contribution grows through investment, and as of the employee’s retirement date, the lifelong payment of a retirement and partner pension is purchased using the accrued capital.
Employers have a high level of responsibility towards their employees in the Netherlands. One example is the fact that in the case of absence due to sickness, the employer has an obligation to pay up to two years of full salary while the employee is out due to their illness.