Cost of Living in the Netherlands
As with many other European countries, since the introduction of the Euro, the cost of living in the Netherlands has gone up, and the Dutch enjoy talking about how expensive everything has become and how they miss Guilders. Amsterdam now rates 57 on the Mercer cost of living ranking, having dropped seven places since 2011. According to Xpatulator, Amsterdam is the 38th most expensive city to live in out of 125 cities around Europe. It is also mentioned that the hardship index is 10 percent lower if you consider the current economic recession.
Wages in the Netherlands are average compared to the rest of Europe. They are certainly higher than in Spain and Italy, but lower than England and Germany. The average yearly salary could range from 18,000 to 35,000 euros a year. As of 2012, the minimum monthly wage in the Netherlands is 1,446 euros gross. From this salary, just over 30 percent goes to taxes. It should also be noted that in the Netherlands you would be expected to pay about 100 euros a month, more or less, for health insurance. Taking this data into consideration would mean a net minimum wage of 989 euros.
Salaries are usually paid monthly around the 25th – 5th of the month. Twice a year workers are entitled to receive an extra payment; once at Christmas (sometimes as a 13th cheque), and a summer holiday bonus (May) which is considered as vacation money.
If you look at the breakdown of costs in the Netherlands, a family of four (one child at school, other in day care) with average incomes can expect their salaries to be broken down as follows:
- Housing: 26%
- Health insurance: 5%
- Shopping: 7%
- Day care: 21%
- Internet, television, telephone: 3%
Health and liability insurance
If you’re living in the Netherlands or you pay income tax in the Netherlands you must purchase a health insurance package from a Dutch insurance company. Health insurance is variable depending on the package chosen but can range from 95 to 350 euros.
Liability insurance is also a must in the Netherlands; if you, your child or your dog damages anybody else’s property you will be held responsible for any costs and will be expected to have this insurance. The price of this is about 35 euros a month (normally included in your household insurance).
Taxes, benefits and money in the Netherlands
The 30 Percent Ruling
The Netherlands is notorious for its high tax rates. Fortunately, some expats are entitled to a tax reduction. This tax benefit is called the 30 Percent Ruling and allows employers to pay skilled foreign employees 30 percent of their wages tax-free without providing any further evidence of their expenses. The idea is that expats are likely to have expenses that native workers don’t have, like managing a property abroad or making long distance calls to friends and family. Of course, if your expenses total more than 30 percent you can put in a claim with the necessary documentation. However, certain rules apply and not everyone qualifies.
In the Netherlands certain people qualify for additional help with bills such as a mortgage (if you own your own house), childcare, health insurance and rental costs. The Belastingdienst (tax office) issues a monthly payment based on your monthly income and costs.
Quarterly, every child in the Netherlands is entitled to child benefit until they are 18. This too is based on your income and situation.
Yearly tax return
At the end of the financial year (April) everybody living in Holland is required to declare their expenses and incomes from the previous financial year. Based on the declaration the Dutch tax will decide if you should pay back taxes or receive an amount. A family of four with two working parents and children in day care with their own house could get around 2,500 euros back each year.
It is highly recommend getting someone to do your taxes for you as it can be a very complicated process in the Netherlands.
Paying for your purchases
Cash and debit cards (the latter use a PIN number to authorise payment and you will often hear Dutch people ask if they can "pin" for something when wanting to pay) are the norm for paying. The Dutch still use the Maestro system and Visa and MasterCard are restricted to credit cards only. Many Dutch people still use large amounts of cash, even for large purchases, either at the store or when the items are delivered to their home. Small purchases are sometimes made using a type of smartcard, called a chipknip or chippas, which has to be topped up with money from a bank account. Credit cards are not widely used in the Netherlands, except for some large purchases or for online payments. Many shops in the Netherlands will not accept credit cards as payment, especially the smaller less world known shops.
Cost of accommodation in the Netherlands
Finding a nice place to live is always difficult; the Netherlands is no exception, especially in large cities. It is much cheaper to live in the non-urban areas, and popular cities such as Amsterdam and The Hague can be very expensive.
Rental prices in Amsterdam
- One-bedroomed apartment in central Amsterdam: 1,152 euros
- One-bedroomed apartment outside central Amsterdam: 1,000 euros
- Three-bedroomed apartment in central Amsterdam: 2,243 euros
- Three-bedroomed apartment outside the central Amsterdam: 1,450 euros
Rental prices above are based in Amsterdam. Prices can be lower in other Dutch cities. For example, in Breda, you can rent a one-bedroom apartment for 300 euros, a four-bedroom house for 800 euros, and a four-bedroomed house to buy in the south would be about 200,000 euros.
Buying a house in the Netherlands is a complicated process and is probably best done with an English speaking intermediary. Once the house is bought you are required to have house insurance, which will cost about 45 euros per month. You will also be responsible for a housing tax of 300 euros a year (depending where you live and the size of your house). You will also have to pay sewer and refuse costs, on average 200 euros a year.
Renting a house exempts you from these costs as these will be the responsibility of the owner; however, you may find them as an addition in your rent.
Cost of clothing in the Netherlands
Overall, clothing is quite expensive in the Netherlands. Many foreign companies add a percentage to their clothes compared to the price in their country of origin.
Nearly all major high street brands can be found in the big cities, including H&M, Men@Work and Etam. There are many cheaper options such as Zeeman and Wibra but the clothes are not as good quality. Department stores such as HEMA and V&D also have a good selection of reasonably priced clothes.
- Some examples of what you can expect to pay:
- Summer dress in Zara or H&M: 35-45 euros
- Leather boots: 90-122 euros
- Winter coat: 40-60 euros
- A pair of boot cut jeans: 40-50 euros
Cost of transportation in the Netherlands
Public transport in the Netherlands is relatively cheap compared to some EU countries. Most of the Netherlands now works with a chip card system. A chip card can be purchased at a once-off price of 7.50 euros. It can then be used on trains, trams, metros and buses.
A one-way train ticket from Schiphol Airport to Amsterdam train station would be around 3.80 euros. A one-way ticket from Amsterdam to Utrecht will cost around 6.80 euros.
Taxis are very expensive compared to countries such as Spain. A 12km journey could cost around 35 euros. However, there is a service called the “Deeltaxi” sharing taxi. It works by a zone pricing system and you would share your journey with other passengers. The same journey as in a normal taxi of 12km would cost only 8.50 euros. However, you should be prepared to go all around the country first.
Buying a car in the Netherlands
There is a road tax in the Netherlands, BPM, which makes car prices very high. Check the autotrack.nl web site for used car prices.
Public transport costs:
- One-way bus ticket (local transport): 3.00 euros
- Monthly bus pass: 68.92 euros
- Taxi start (normal tariff): 5.97 euros
- Taxi, 1km ride (normal tariff): 2.01 euros
- Taxi, one hour waiting (normal tariff): 24.16 euros
Eating and drinking in the Netherlands
Alcohol and tobacco costs are very low compared to other places. However, eating out costs are high compared to other countries for items such as a business dinner, dinner at a family restaurant (not fast food)
Restaurant and hotel bills normally include Value Added Tax and a service charge, so it is unnecessary to tip; although it is common practice to leave a small tip for good service. In the case of waiters and taxi drivers, a tip of around 10 percent of the bill is customary.
The cost of education in the Netherlands
Tuition at local schools is free, but international schools are expensive, and can range from 13,836 euros per year for a school aged child in a British school.