He is a computer engineer who returned to China after obtaining a degree in the Netherlands. Now he has to work for his company and clients at day and spend time with his family at night. Besides, he needs to squeeze in some time to update and improve his knowledge and skills. And the skyrocketing housing price, endless extracurricular lessons of his child and many other concerns put both his heart and purse under great pressure.
The Netherlands is a country with high-level welfare, so many people are curious about what benefits they will enjoy if they settle there. Actually, the welfare programs of the Netherlands are among the best in the world, but in most cases, even the Dutch themselves don’t know exactly what social benefits their country provides, as there are countless laws and regulations related to that. And with the example set by the government, Dutch employers will definitely follow suit. Expect a high salary and long vacations, now let’s see if there are other benefits that Dutch employees can enjoy.
The Dutch pension system is one of the best in the world, and it is supported by three pillars.
Pillar 1: National or AOW pension
According to the General Pensions Act (Algemene Ouderdomswet) of 1957, people living or working in the Netherlands between 15 and 65 years old will receive a basic pension from the age of 65, and the amount can be as high as 70% of the net minimum wage. The exact amount received depends on many factors, including how long you have worked in the country and how long you are insured under the AOW scheme. For every year you work and keep insured under the scheme, you get 2% of the full pension. You need to be insured for 50 years preceding the AOW pension age in order to get a full pension.
According to statistics of 2017, an individual pensioner receives 1153.35 euros per month and a couple who are married or have registered to live together receives 794.59 euros every month per person. Plus, a pensioner gets a holiday allowance of 71.61 euros (for a single person) or 51.15 euros (for a couple) every month.
Pillar 2: Collective Pension
The second source of Dutch pensions is the collective pension schemes of specific industries or companies. Usually, they are managed by non-profit pension funds (pensioenfonds) or insurance companies and companies pay the funds membership fees every month on behalf of their employees. Employees can choose the scheme they prefer. If you change your job and start to work for another company, you have to update the information of your employer with your pension fund.
Most Dutch companies are forced to implement a pension scheme, so over 90% of employees can receive collective pensions. Given the fact that employees also enjoy AOW, companies will deduct part of their salaries for paying AOW, and the amount is determined by which scheme you choose. Please remember to ask your employer about the amount of deduction before signing the contract.
There are three types of pension funds:
Industry pension funds, which cover all employees within a specific industry, including hotel, catering, retailing, construction, and government.
Corporate pension funds that operate within a single company.
Independent professional pension funds aimed at such professionals as medical specialists and dentists.
Pillar 3: Individual pension products
Self-employed people and employees working in industries without any collective pension fund can buy individual pension products to support their later years, which include life insurance, stocks, real estate, and tax breaks accessed through government policies.
We have mentioned before that all people working in the Netherlands have to take out basic health insurance. Your employer may pay part of the premium for you. Roughly speaking, you are expected to pay a premium of 95 to 120 euros every month, depending on the additional insurance package you choose. Many employers have signed agreements with insurance companies to offer discounts for collective insurance of employees, which is a great attraction for people intending to work there.
Many Dutch companies reimburse the commuting cost of employees. The amount reported for reimbursement should correspond to the distance traveled, so long-distance means higher allowance. The allowance is free of income tax if it is no more than 0.19 euro/km. If your employer doesn’t cover the commuting expenses and you need to commute with public transportation, your zero bracket amount can be raised to 2,073 euros at most. The allowance also has a ceiling, such as 250 euros per month, which should be made clear when you sign the working contract. There are other types of commuting allowance or benefits:
Companies often offer employees cars for business purposes or private trips within the Netherlands. In most cases, those cars are managed by professional vehicle providers other than the companies themselves.
Some companies offer employees allowance if they commute with their own cars. The amount depends on the position of an employee. It is referred to as allowance for private car usage for business purposes.
Flexible Working Hours
Nowadays more and more people prefer working at home. There isn’t any Dutch law stipulating working flexibility, but most companies give much freedom to employees to arrange their own work, which is appreciated as part of benefits for Dutch employees. If you want to work at home and it won’t affect the quality of your work, you can discuss with the employer about related details, such as how much work and the exact tasks that can be taken home, and explain the benefits and potential problems. You can be totally free to work at home if you plan it carefully.