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. 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.

The IND also used a standard amount including vacation allowance and 13th month’s salary payment.

After the introduction of the month 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.

As of March 1, 2015 standard amount excluding vacation allowance

When it switched to a month 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.

The 13th month’s salary payment is, in principle, also no longer included

The effect of this was also recently published as subordinated legislation and it appears from this that the 13th month’s salary payment also can no longer be included unless it is spread over the entire year and paid on a monthly basis to the highly skilled migrant.

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.

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. 

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

If you would like more information on this topic, please contact your own Meijburg tax advisor or Heleen Snieders.

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