Working in the Netherlands: contract, payslip and tax

A Dutch contract does not read like the one you left behind, and gross does not compare to gross. Since a rental application rests entirely on these things, it is worth understanding them before you sign: your contract type will decide what you can rent.

Contract types, and what they are worth to a landlord

This is the point newcomers underestimate most. An Amsterdam landlord looks first at how stable your income is.

• Permanent contract (vast contract): the strongest possible file, and it opens almost everything.
• Fixed-term contract (tijdelijk contract): very common, often one year renewable twice. Acceptable if the remaining term covers the lease. A landlord may ask for more than twelve months left to run.
• Zero-hours contract (nulurencontract): no guaranteed hours. The hardest file to get accepted, even with good actual earnings.
• Agency work (uitzendcontract): very widespread in the Netherlands, particularly in phases 1 and 2 where either side can walk away. Often refused on its own.
• Self-employed (zzp): you will need accounts, statements and often savings. See our rental application guide.

If your contract is not signed yet, ask for a letter of intent (intentieverklaring) stating the start date, salary and duration. Most landlords accept it as a file, and it saves you weeks.

Reading a Dutch payslip

The payslip (loonstrook) fits on one page and looks little like its equivalent in most other countries.

• Brutoloon: gross monthly salary.
• Loonheffing: tax deducted at source, combining income tax and social contributions in a single line.
• Vakantiegeld: holiday pay, equal to 8% of annual gross. It is set aside monthly and paid in one go, usually in May. It is part of your pay: count it in your annual figure, not your monthly budget.
• Reiskosten: commuting allowance, tax-free up to a set amount per kilometre.
• Pensioenpremie: pension contribution, often shared with the employer.
• Nettoloon: what reaches your account.

Many landlords think in annual gross including vakantiegeld. An advertised €4,000 gross per month is therefore €51,840 a year, which changes the rent ceiling they will accept.

The income landlords require

The usual Amsterdam rule: three to four times the rent in gross monthly income. On a €2,000 home, that means €6,000 to €8,000 gross a month for a comfortable file.

For a couple, incomes are generally combined, which widens the field considerably. The documents expected are detailed in our guide to BSN, inschrijving and income, and our calculator gives the income to show for a given rent.

The 30% ruling, if you qualify

This is the tax break that most changes an expat's net pay when recruited from abroad: part of your pay is treated as a tax-free allowance, subject to conditions on expertise, minimum salary and where you lived before.

Two points that bear directly on housing:

• The ruling raises your net, but landlords work from gross. It does not mechanically lift your rent ceiling, even though it improves your real comfort.
• Its duration and conditions change regularly. Check it with your employer before building a budget on it.

The detail is in our 30% ruling and housing guide.

Tax, in practice

• Tax is deducted at source by your employer. There is nothing to pay upfront.
• The annual return (aangifte) is filed online with DigiD, between March and May. The form is pre-filled and often takes under an hour.
• The first year very often produces a refund, because withholding was calculated on a full year while you only worked a few months.
• Renting gives no deduction. The well-known Dutch mortgage interest relief applies to owners only.
• If you still have income or property at home, check the relevant double taxation treaty with an adviser. This is where improvising gets expensive.

Leave, notice and what differs

• Paid leave: twenty statutory days minimum for full time, often twenty-five in practice.
• Notice: usually one month from the employee, one to four months from the employer depending on length of service.
• Probation (proeftijd): one or two months depending on contract length, and either side can end it freely. Signing a lease during probation is a risk worth weighing.
• Sick leave: the employer maintains at least 70% of salary for up to two years, considerably more protective than in most countries.
• Part-time work: far more common and far better accepted than elsewhere, including at senior levels.

The order to follow when you arrive for a job

1. Get the letter of intent before you leave: it doubles as your rental file.
2. Find a home where registration is allowed. Without it there is no BSN, and without a BSN your employer cannot process you properly.
3. Register with the city within five days and collect your BSN.
4. Give the BSN to your employer, take out health insurance within four months, apply for DigiD.
5. Open a Dutch bank account: most employers pay into a Dutch IBAN.

That sequence is what makes a job start go smoothly or badly. The detail is in our guide to DigiD and Dutch admin.