Are salaries in Netherlands really low

7POSTS

9 years ago

Dear All,

I am living in Netherlands from past 5 years. But still I don't understand the salaries in Netherlands. So far I have been working as a contractor and now I have plans to move to a permanent role or in a job that has more visibility. To my surprise the salaries that are offered are not all inline with the experience we have and also doesn't suite the expenses we have.
I have refered couple of websites to check the salary ranges. Even the results there are shocking. For a software developer who has 12years of exp is only earning avg salary of 55K EUR per year. Out of this almost 38% is taken away as taxes. I am wondering how can people are managing with such low salaries. Especially expats have big troubles with these low salaries. Because they end up paying huge rentals and high fee for international school fee for their kids.

On top of that, they also need to save some money to fulfil their commitments in their homeland.

Let's take a simple use case with a salary of 51K without holiday allowance. Holiday allowance is generally one month salary in Netherlands.

Note: %1K salary is considered as very very good salary according to people in Netherlands. Don't know whether they really mean it or they just say it like that.

Considering the above sal and taking in to 30% ruling the expected take home salary(netto) is 3500EUR to 3600EUR .

Netto : 3600
Rent聽 :聽 -1200 (unfurnished inc of G/W/E and local taxes) (assuming a normal city and a 2bed room house)
Medical insurance : -200
Internet bill : -40EUR
Phone bills聽 : -50EUR
international school fee for one kid : -500EUR
Car : -250EUR (very normal small car and old one, inc of taxes, insurance, and petrol )
Food : -300EUR
Misc : -200EUR (clothing, kids unforeseen expenses, fines u get, medical expenses incurred聽 etc)

We are only left with : 860EUR (the above is only very very basic estimate not considering yearly trip to their motherland which may cost 2000 to 3000EUR)

Looking at the above figures it's clear that a family with 2 kids can't afford a living here.

Can you all please share your experiences and advise what's wrong with NL or am I the only person who is having this problem.

Please don't compare these figures with local Dutch people, because they have mortgage which is less than rent we pay and more over they don't have the burden of international school fee. Please share your exp from expat point of view.

If both partners work then the other partner mostly is not entitled for 30% ruling and the money they bring in is enough for the daycare costs that we have to pay. As far as I know the daycare costs for one kid (full time ) is 1750EUR assuming you get 600EUR back from govt, you end up paying 1100EUR for one kid. The sal spouses get is around 2000EUR to 2300EUR.

On the whole I would like to hear all your opinions on this. If this is same for all then how come so many expats are living here. Can' this be changed. Especially we are expats and we never make use of any social security benefits that NL govt offers to their citizens. Yet we pay huge money towards it. I feel this as not good. If you are living for so many years and has paid huge amount of money for nothing, this is really not good. Can't we do anything to correct these? Ideally expats if they leave the country they should be compensated at least with 50% of their social security contributions, because they are not all utilizing it.

Looking forward for your experiences.

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Cynic UK/Netherlands Expert

8109POSTS

9 years ago

A few comments:

I work for a US multi-national and have been an expat in many countries (including Holland).

In general, salaries will reflect the market place; they pay what they need to pay to achieve their aims; there is no legislative aspect to how much you will be paid (only how much they will take away), neither is there any element of "fairness"; it's how much the market can bear and still make a profit.聽 Contractors in general fill a niche in the market place that is typically short-term and is not the preferred employment for local workers.聽 Salaried permanent contracts are now rare in Holland, with more typically 12-month rolling contracts becoming the norm and as you've found out, not paid as much as you.

Contractors are in general the mercenaries of the market place; if 51K is the salary that you and your peers are accepting, then that will tell the employer that they have got it about right.聽 If they can't get the people they need at that price, then the price (salary) will go up until they get what they need, or they'll stop doing it and go back to making widgets and no longer need the contractor.聽 The solution is simple (and perhaps simplistic), don't accept the work; like all things in the market place, if there is a shortage, the price (salaries) will go up.聽 There is of course, the danger that somebody without your expenses/lifestyle (another mercenary), will undercut you; welcome to the market place my friend; life is not fair here.

The average salary in Holland is considerably less than yours (more than half); to exclude the "local Dutch people" is perhaps not productive to your argument as you're excluding an element that is very much part of the equation; put simply, you may be pricing yourself out of the marketplace, where the employer begins to think he/she will be better off and still achieve his aim, with 2 less qualified locals.

International schools are very expensive (when we did it, we had to discount them as we came to the same conclusion you did).聽 Consider using the Dutch state school system; it's free(ish).

There is nothing holding you to Holland, as a citizen of another country; you (unlike the locals) have the right to go there to live and work; perhaps if you can enjoy a better lifestyle, achieve a better work/life balance and get paid more at home, then that is a better option for you and your family?

sureshtvn New member

7POSTS

9 years ago

Cynic, what you said is true. That's what I am seeing it here. But don't understand how can people can compromise themselves with a saving of around 500EUR per month.

How can they afford any unforeseen expenses in their life. I know salaries in USA and AUS are quite high. Then why can't they be here. I am not telling that they should be same as U.S.A. At least a bit reasonable salary to compre. With the present situation we can't even think of comparison

.

As you mentioned, yes nothing is blocking me here. I just wanted to know whether is it same with everyone or not. If it turns out that it's same with everyone then I may have to rethink about my stay here.

Also the taxes here are like crazy when compared to other countries. It's the most expensive tax system. Tax on everything you buy. This is on top of income tax that you pay. To make the situation worst in Netherlands employers also pay social security for each employee they hire. Thus making salaries lower and lower to employees. Sometimes I wonder what this government is doing with all these huge tax money.

Salaried employees pay normally 42% as tax and on top of that employer pays around 10 to 15% as employees social security contribution. Which means government is taking more than 50% of employee salary.

I find it strange that people never asks for all these and will just accept whatever their government decides. For me personally if i look it as third person also, this is really too much to take from individual salaries. The height of this too much is in such a way that sometimes I think it's waste to work full time. It's better to work part time and yet live happy life.

Cynic UK/Netherlands Expert

8109POSTS

9 years ago

That is simple and as I said previously, it's the marketplace in Holland and for whatever reason, it appears people are desperate to get there, so are feeding the system with what it wants, it's a buoyant marketplace at the moment.

Perhaps it's better to view this from a different angle; ask yourself if your current employer has any difficulties getting qualified staff, or retaining them; if so, then perhaps you should consider whether you should stay; primarily because it's indicating something is not right.聽 If the salaries are better in the US and Australia, then people will begin to leave to go there and the marketplace will equalise; perhaps now is the time to get more?

Personally, how I did it was (I didn't need the job, I went for it because retirement in my 40's was boring); so I handed in my notice, explained it just wasn't working and was moving back to Holland; I could have packed up and caught the flight home the same day.聽 Unexpectedly (I expected a thank you for your efforts and goodbye), I was offered a substantial pay rise, an education supplement to add to my professional degree and relocation expenses to move to a better area in the UK where the work/life balance was much better - I had to make a commitment to remain with the company for a specified time, but 20 years later, I'm still there and have move upwards and onwards in the company.聽 So, It can be done, you just have to ask yourself, do you have aspirations within the company, are you replaceable, how much do you need the job?

Cynic UK/Netherlands Expert

8109POSTS

9 years ago

Aha, you added something to your post; to answer the extra bits.

Taxes - yes, but actual income tax is very low.聽 It's when it's joined together with the Social taxes, it becomes mouth-wateringly high, probably some of the highest in Europe.

Social Security - it's the Dutch system, it pays for the Dutch state pension, disability and social care, unemployment allowances.聽 You don't get to opt out of it and the fact you will probably never benefit from your contributions must be frustrating; but it is what it is, you could have known this before you moved there.

As to why do people accept it; it's called a democracy and the people making the rules tend to get re-elected every time there is an election.聽 Things may change in a few months when the PVV begin to influence Dutch politics, but it probably won't be to your liking.

Question - could you work for your current employer from your home country?

sureshtvn New member

7POSTS

9 years ago

I need job desperately of course. It's the bread and better for my entire life. Of course I do have other aspirations to do. Hence want to take a break and try out those. But with the present salary looks like I can never do that. because of very less savings and hence can't put entire family in risk. That's the reason why I am running for salary.

If you don't need job and have no such strict constraints then it's a different story. You can be happy if you have better work like balance. Having said that WFB in holland is really good. I don't have anything of concern there. life style is also great. It's just that a bit of more salaries would have made it the best place to live. Or some special arrangements like聽 payments to social security exemption for expats and things like that would bring in real difference in our lives.

Cynic UK/Netherlands Expert

8109POSTS

9 years ago

LOL - welcome to Holland; it's a great place, you just have to accept it for what it is (and you don't have to wear cloggs).

Here's a thought; perhaps consider that Holland is the place you will live for the rest of your working life, buy a house instead of renting, send your children to the local state school (they are very good) and in the process, save lots of money.

An old English saying is that you can't have your cake and eat it; probably very relevant to your situation.

Best of luck in your future journey.

maraud Member

1POSTS

8 years ago

I have found that salaries are MUCH lower than the US among foreigners, but if you are Dutch and know the right people, salaries are MUCH higher than in the US. (400k for a european sales person). There is not a culture to challenge salaries based on discrimination like in the US, and among (some) groups in the country, it is acceptable to pay foreigners less. The Dutch economy is not doing that well, despite what is reported, so natives feel stressed about keeping their culture and their jobs, thus seeing foreigners as disrupting their way of life. (Similar to how some US people see certain foreign groups.) My suggestion is to figure out your standard of living needed for a US life and ask for that outside of your current company and hold firm, even of they laugh in your face. Also, historically, the NL has the idea that one should sacrifice their salary or only have one partner working to "save" jobs for others who "need" them. This started during an 80s recession and has persisted. The unemployment rate here includes anyone who works over 12 hours a week, whereas it is 35 in the US. And...how do people live on this? 1. They are generally much more frugal than Americans (only eating bread for lunch and breakfast and always biking) 2. Bijstand (welfare) If you have children, you will get money back from the government to support them. Also, 2/3 of the rental market is social housing. You only need to make less than 35k to get one. Then, when you start making more money than that, you are not forced to move into private sector housing. Therefore, some people living in social housing are doing quite well. My suggestion is to ask for what you are worth and stand firm until someone accepts it. They need you, they just don't realize it. Sell yourself!