To summarise numerous articles from previously: Dutch payroll is complex and can be very difficult to understand. Most employees, contractors or freelancers only check their salary through their bank account and pay little attention to any specific payroll specification that outlines their salary calculations. The document is, to put it mildly, complicated and without the correct guidance or knowledge it is possible to enter a seemingly endless loop of re-correction.
This makes Dutch payroll sound incredibly multifaceted; however the mystical aura and reputation the complexity receives isn’t always necessarily true.
The main question asked is usually ‘Can Dutch payroll administration be straightforward and easy?’ The answer is both yes and no, as the process looks relatively simple if compared to logistics as a whole. You need a record for each individual employee containing vital information such as social security numbers and salary amount. Taking this information alongside overtime, travel allowances and similar variables, the payroll tax and insurance contributions and net wage can be calculated and then paid. Calculated taxes and contributions must also be declared and paid to the relevant tax department.
That’s the just of it. The payroll specification isn’t completely impossible to understand but it will take time – a lot of it!
So, what’s the fuss about? Well, while learning the Dutch payroll process is certainly possible, the legislation surrounding the payroll process itself is dynamic, complicated, multi-layered and constantly changing. In the Netherlands, every payroll component needs to be examined for the base calculation and to distinguish how much of a contribution the employee has to make. With rules changing so often, it’s incredibly difficult to stay on top of, let alone master, the administration duties around Dutch payroll. Robust, intricate and expensive software is also required.
Collective labour agreements are also vital (documents describing employee earnings and allowances, that can run to over 150 pages). This intensive amount of important information makes any task incredibly difficult and time consuming, especially if the task requires numerous employees from various companies to all be paid at the same time.
The authorities in the Netherlands have long been trying to make payroll simpler. Yet, there has been no immediate success for many years. While there are constantly plans on the horizon, the political process is extensive and extremely slow. Agreements over collective labour and pension contribution calculations are also difficult to grasp and implement. Even though negotiations continue between employers and employees, these complications are unlikely to smoothed out any time soon.
