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Financial Participation

Whereas employee financial participation schemes were generally directed at execu-tives up to the 1990’s, the incidence of such schemes for all levels of staff has increased since then. Compared with other EU Member States, the Netherlands has one of the highest incidence rates of employee financial participation.

In the mid-1990s a number of companies decided to introduce low-risk, simple share option schemes, mainly for executives and professionals. This might also have been done for tax reasons. Since then, wide-based participation schemes have gained in importance. Employee financial participation is to be found mainly in companies with a well-developed institutional share ownership and co-determination.1

In 2007 uptake of employee financial participation was examined in all companies listed on the Amsterdam stock exchange. It found that 62.5% of companies offered such programmes. The most common form were share option schemes, offered by 41.7% of companies. Although originally intended solely for management, the number of schemes covering the whole workforce has grown since 1990.2


According to the results of the European Company Survey (ECS, 2009), a survey of more than 27,000 HR managers in Europe, 27% of private-sector companies with 10 or more employees in the Netherlands offer their employees a profit-sharing scheme, making the Netherlands one of Europe’s top performing countries in this area (the 30-country European average is 14%), with only France having a higher percentage. The prevalence of employee profit-sharing schemes in the Netherlands tends to increase in line with company size. 25% of companies with 10-49 employees, 37% with 50-199 employees, and 41% of companies with more than 200 employees had a profit-sharing scheme.3

The proportion of employees involved in financial participation schemes, according to the findings of the fifth European Working Conditions Survey (EWCS 2010)4 in companies with 200 employees or more is around 17%. The Netherlands is thus markedly above the European average of around 12.5%.

This finding is confirmed by the Cranet Report 2011.5 Around 59% of the companies questioned (with 100 or more employees) answered that there was a profit-sharing scheme in their firm. This figure is substantially above the average of 36% among all the countries examined.

Payments resulting from profit-sharing are subject to tax and social security contributions. Distributed profits are deductible from corporation tax.

Employee share ownership

According to the results of the ‘European Company Survey’ (ECS, 2009), 5% of Dutch private-sector companies offer their employees share ownership schemes, the average percentage in Europe.6 According to the fifth European Working Conditions Survey (EWCS)7 covering companies with 200 employees or more around 3% of employees were involved in such employee share ownership schemes in 2010. This puts the Netherlands just under the European average, according to this study.

Savings plans

Save-as-you-earn schemes are a popular form of employee financial participation in the Netherlands, with some 27% of all employees taking part.8 Employees can invest annually up to EUR 613 (2008) of their gross wages in a savings plan– as cash, shares or share options. Where savings are converted into company shares, the maximum amount is doubled to EUR 1,226 (2008). Such employee savings are tax-free and not subject to social security contributions. However employers are subject to a flat-rate 15% wage tax on such sums. To benefit from such tax concessions, the savings plan must be available to at least 75% of all staff and a 4 year retention period enforced. Furthermore, the participation schemes needs to be linked to a savings plan. This is the reason why such combinations are the most prevalent schemes in the Netherlands.9

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.