What does an employee cost on top of the gross salary?
Short answer
Expect roughly 25% to 35% extra on top of the gross salary. That covers holiday pay (at least 8%), employer contributions for employee insurance, the employer's Health Insurance Act levy and often pension. In addition, you continue to pay wages during sickness, for up to two years.
Updated on · Reviewed by the tax advisers at Boekhoudvriend
The gross salary is only part of the wage costs. Exactly how much you pay depends on your collective labour agreement (cao), your pension scheme and your sector.
The costs at a glance
- Holiday pay: at least 8% of the gross salary
- Employee insurance contributions, such as unemployment (WW) and incapacity for work
- The employer's levy under the Health Insurance Act (Zorgverzekeringswet)
- Pension contributions, if your cao or a pension fund requires them
- Continued pay during sickness and the cost of an occupational health service (arbodienst)
- Travel allowance, laptop and phone
Room for allowances
Through the work-related costs scheme (werkkostenregeling, WKR), you give tax-free allowances, such as a Christmas hamper or a working-from-home allowance. That way, your employee receives more net pay without extra payroll tax.
Sources
- Belastingdienst: filing a payroll tax return (in Dutch)
- Belastingdienst: work-related costs scheme (in Dutch)
This answer is general information, not personal advice. Your own situation may work out differently, so feel free to ask our team.