The Netherlands – Minor Revision of the Highly Skilled Salary Criterion

The Netherlands – Minor Revision of the Highly Skilled

Legislation has been published in the Netherlands that codifies a rule whereby the 13th month’s salary payment is excluded from the monthly-based salary criterion for highly skilled migrants and holders of a European blue card unless it is spread over the entire year and paid on a monthly basis to the highly skilled migrant. It is still unclear whether a salary adjustment will have to be made for currently employed highly skilled migrants for whom the 13th month’s salary payment was a crucial factor in the granting of a residence permit.

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Subordinate legislation1 has been published in the Netherlands that codifies a rule whereby the 13th month’s salary payment is excluded from the monthly-based salary criterion for highly skilled migrants and holders of a European blue card unless it is spread over the entire year and paid on a monthly basis to the highly skilled migrant.

WHY THIS MATTERS

It is essential that employers of highly skilled migrants are aware of this change, so that the 13th month’s salary payment can be paid on a monthly basis where applicable, or a higher monthly salary can be agreed, for example. 

Background

On January 1, 2014, the salary criterion for highly skilled migrants and holders of a European blue card was changed from an annually based methodology to a monthly based methodology.  (For related coverage, see Flash International Executive Alert 2014-125, December 23, 2014.)  This change caused confusion with regard to the assessment of fixed salary components that are paid annually rather than monthly, such as vacation allowance and the 13th month’s salary payment. 

IND Also Used a Standard Amount Including Vacation Allowance and 13th Month’s Salary Payment

After the introduction of the monthly criterion, the Immigration and Naturalisation Service (“IND”) also applied a standard amount including vacation allowance alongside the standard amount excluding vacation allowance.  This could also include a 13th month’s salary payment, provided this was laid down in the contract.  Although the vacation allowance and the 13th month’s salary payment are not usually paid on a monthly basis, an exception was made for these two salary components, which allowed them to be paid on an annual basis.2  

As of March 1, 2015, Standard Amount Excluding Vacation Allowance

When it switched to a monthly criterion in 2014, the government failed to mention that this involved the monthly salary excluding the vacation allowance.  This was rectified as of March 1, 2015.3

For the sake of completeness, the gross monthly amounts applying as of March 1, 2015, are listed below:

Highly skilled migrant of 30 years and older: EUR 4,189 excluding vacation allowance
Highly skilled migrant younger than 30 years of age: EUR 3,071 excluding vacation allowance
Highly skilled migrant who graduated in the Netherlands:  EUR 2,201 excluding vacation allowance

      

MEIJBURG & CO. NOTE

It is still unclear whether a salary adjustment will have to be made for currently employed highly skilled migrants for whom the 13th month’s salary payment was a crucial factor in the granting of a residence permit.  The IND has not yet taken a decision on this.

FOOTNOTES

1  Cf. Staatscourant 2015, no. 13033.  

2  Refer to the IND Procedural Guidelines no. 2013/20 (Implementation and Advisory Departments of the Immigration and Naturalisation Service).  

3  Cf. Staatsblad 2015, no. 44. 

CONTACTS

For further information or assistance, please contact your local GMS or People Services professional* or one of the following immigration professionals with the KPMG International member firm in the Netherlands: 

Heleen Snieders

tel. +31 88 909 3420

snieders.heleen@kpmg.com

 

Hillery Stjura

tel. +31 88 909 1886

stjura.hillery@kpmg.com

 

Michelle Faber

tel. +31 88 909 1837

faber.michelle@kpmg.com

 

Cherida Hooijer

tel: +31 88 909 1887

hooijer.cherida@kpmg.com

 

* Please note the KPMG International member firm in the United States does not provide immigration services.

The information contained in this newsletter was submitted by the KPMG International member firm in the Netherlands.

© 2016 KPMG Meijburg & Co., a Netherlands partnership and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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