Reading your payslip: examples and explanation

Your payslip provides a detailed overview of how your salary is structured. You receive this payslip weekly, monthly or 4-weekly from your employer and it provides important information about your salary, taxes, benefits and any other allowances.

Gross and net salary

Your pay slip shows your gross and net pay. You will (unfortunately) not receive the amount listed under total gross pay in your bank account. Total gross pay (bruto loon) is the amount you receive from your employer before deduction of taxes and premiums. Your net pay (netto loon) is the final amount you will receive in your bank account (net payable). 

Payroll taxes

Wage tax credit (loonheffingen) is a reduction in the tax you get when you work or have worked. This means you have to pay less tax on your salary.

Travel allowance

The expenses reimbursed by your employer to travel to work are called travel allowance (reiskostenvergoeding). These can be the costs you incurred to get to work by car, bus or train.

Holiday allowance

Holiday allowance (vakantiegeld) is an allowance given to workers in the Netherlands to cover the cost of a vacation. In the Netherlands, vacation allowance is usually 8 percent of your gross salary.

Special rate

You also pay payroll taxes on the income you receive in addition to your “regular” salary. This is called payroll tax special rate (loonheffing bijzonder tarief). Think of one-time or special remuneration, such as holiday allowance or overtime.

Irregularity bonuses

Irregularity pay (onregelmatigheidstoeslag or ORT) is extra gross pay you can get for working outside normal working hours.

Pension build-up

Are you employed or have you been employed? If so, most employers offer a pension plan (Pensioen Plus).

Complementary Sickness Insurance

AZV refers to Aanvullende Ziektewet Verzekering. Sickness Insurance provides an income when you are sick.

Compensation PAWW

If you are unemployed or (partially) disabled, you will receive WW or WGA benefits. This benefit stops after two years. If you are still dependent on benefits after those two years, the PAWW will supplement your benefits. This gives you more financial security. You pay a monthly contribution that your employer deducts from your gross salary. This amount, which you have to pay for the PAWW, is repaid by means of a gross allowance.

ET regulation

ET is the abbreviation for extraterritorial. The ET regulation (ET-regeling) deals with the extra costs that foreign flex workers have when they temporarily work in the Netherlands. Consider the extra costs such as the extra travel costs, double housing costs and higher living expenses.