Laden

WHAT IS THE DIFFERENCE BETWEEN GROSS AND NET SALARY?

In the Netherlands, it's important to understand the difference between gross and net (bruto en netto) salary. 

Gross salary
Gross salary is the total amount you earn before deductions for taxes and social premiums. It includes all the allowances and bonuses you receive, such as the base salary, holiday pay, bonuses, overtime compensation, and other employment benefits. The gross salary is often stated in your employment contract or payslip.

Net salary
Net salary is the amount you actually receive in your bank account after deductions for taxes, social premiums, and other withholdings. This is the amount you can use for your daily expenses and personal financial needs.

Why is there money deducted from my gross salary to get a net salary?

The difference between gross and net salary is caused by various deductions taken from your gross salary. These deductions may include:

  • Income tax: In the Netherlands, everyone pays income tax. The amount of income tax depends on your taxable income and the tax brackets you fall into. The higher your income, the higher the tax rate.

  • Social premiums: These are premiums deducted for social insurances such as the General Old Age Pensions Act (AOW), General Child Benefit Act (AKW), Unemployment Act (WW), and Health Insurance Act (ZVW). These premiums contribute to social benefits such as pensions, health insurance, and unemployment benefits.

  • Other deductions: Depending on your personal situation and employment conditions, there may be other deductions such as contributions to a pension scheme, union membership fees, or any loans you have taken.

The net salary can also be influenced by other factors such as tax refunds, allowances, or tax credits you are entitled to. It's important to understand that the net salary may vary depending on individual circumstances and changes in tax legislation.

It's advisable to carefully review your payslip and corresponding tax filings to have a clear understanding of your gross and net salary, as well as the deductions affecting your net income.


Related news