Specific details of the reporting obligations
The reporting obligation is one of the cornerstones of the pay transparency legislation: employers with at least one hundred (100) workers must regularly report on the pay differences between male and female workers. The consultation documents provide more detailed rules on the pay data that employers must collect, the method they must use to calculate the pay gap, and the format in which they must report the data in question. An overview of these reporting obligations is set out below.
| Number of workers | Frequency | First report |
|---|---|---|
| 100-149 workers | Once every three years | No later than 7 June 2031 (for calendar year 2030) |
| 150 – 249 workers | Once every three years | No later than 7 June 2028 (for calendar year 2027) |
| 250 workers or more | Annually | No later than 7 June 2028 (for calendar year 2027) |
The Regulation also provides more clarity for group structures, setting out the basic rule that the reporting obligation is borne by the legal entity that qualifies as the employer. This is generally the legal entity with which the worker has an employment agreement. In a holding company-subsidiary structure, the relevant entity will in principle be the subsidiary. However, an exception applies where the terms of employment are prescribed at holding company level in full and as mandatory. In that case, reporting must take place at holding company level. Some ambiguity remains here: while the ministerial Regulation states that reporting must be carried out at holding company level, the accompanying explanatory memorandum states that, in these circumstances, reporting may be carried out at holding company level. These two sources are therefore inconsistent with each other. As the legislation is still at the consultation stage, this inconsistency will ideally be resolved in the final documents.
The Decree defines the pay concepts
The Decree defines the pay concepts that employers must use when calculating the pay gap for reporting purposes. The concepts have been aligned with the payroll tax return reporting chain, enabling employers to extract as much of the necessary data as possible from existing payroll processes. This pragmatic approach does expose the legislature to criticism, as it deviates from the broader pay concept used in the European Directive, and could result in an incomplete picture of the actual pay gap.
The Decree sets out the following definitions:
- Gross pay: the pay on which payroll tax and social security contributions are calculated (loon LB/PH), less any amounts paid out in connection with the holiday allowance and employment terms budget (arbeidsvoorwaardenbedrag), and plus any accrual of these amounts. This adjustment ensures that the gross pay level is not affected by incidental payments of sums that accrue periodically. Pay is thus decoupled from the manner in which these provisions are utilised (whether as cash, as hours or otherwise).
- Complementary or variable components: pay taxed at the special rate, such as bonuses, overtime compensation and the thirteenth month’s salary.
- Basic pay: the gross pay less the value of any complementary or variable components.
Pay components that are not treated as taxable pay in the payroll tax return – including certain allowances and benefits in kind under the work-related expenses scheme (such as a homeworking allowance or a company bicycle) – will, according to the consultation documents, remain outside the scope of the payroll reporting. This also means that, in principle, the expat scheme (formerly the 30% facility) and expenses covered by the work-related expenses scheme, such as study costs, will not be taken into account. Given the substantial value of these components, this approach could distort the pay gap reported.
It is also notable that the government stated in the explanatory memorandum to the bill – but not in the Decree, the Regulation or their respective explanatory memoranda – that retention schemes are explicitly excluded from the pay components that must be reported, as a retention payment does not constitute remuneration due for work performed. In addition to not being mentioned in the Decree or the accompanying explanatory memorandum, this exclusion calls into question how certain other benefits, such as option schemes and other long-term incentives, should be treated. After all, these often have a retention character too.
The general pay gap figures are published by the monitoring body (in the Netherlands: the Directorate for Services, Partnerships and Implementation (Directie Dienstverlening, Samenwerkingsverbanden en Uitvoering, DSU) of the Ministry of Social Affairs and Employment). These figures include the pay gap, the complementary or variable component pay gap, and the median pay gap. Information must also be made public on the proportion of female and male workers receiving complementary or variable pay components, and the proportion of female and male workers in each pay scale quartile. Wage differences by category of worker are not made public, but must nonetheless be disclosed to workers and their representative bodies (such as the works council) on the employer’s own initiative.
The Regulation sets out technical calculation rules
The Decree sets out the substantive policy decisions on the pay concept; the Regulation translates these into a technical framework. The Regulation includes an annex with three sections.
- The first section sets out the exact formulae employers must use to calculate pay differences between men and women, such as the (median or other) pay gap on an annual and hourly basis, the complementary or variable component pay gap, the proportion of male and female workers receiving these components, the distribution across pay scale quartiles, and the pay differences within specific categories of worker.
- The second section sets out the methods for calculating the underlying pay concepts, such as gross annual pay, gross hourly pay, annual value and hourly value of complementary or variable components, annual work unit, annual hours and paid hours.
- The third section sets out definitions and methods for assessing other concepts required for implementation, such as the number of workers, the employment relationship, time periods, worker categories, gender, identification details (citizen service number (BSN)/worker number) and technical payroll tax return data.
The Regulation is aligned as closely as possible with the payroll tax return reporting chain and existing payroll systems, so that employers can automatically extract the necessary data from their payroll software. In addition, the Regulation contains specific provisions on reporting supplied workers, including the pay details that the supplier must provide to the user.
Reporting template and digital submission
Reports must be completed using the prescribed template and submitted via an online portal operated by the Ministry of Social Affairs and Employment’s monitoring body. This means that employers are not permitted to submit the information in their own format. The bill stipulates that the employer’s management must confirm the accuracy of the information contained in the report, and must involve the works council in this process.
Practical implications for employers
Taken together, the bill, the Decree and the ministerial Regulation once again demonstrate that the pay transparency legislation is set to bring about major changes. This is true for many areas, but particularly so for reporting obligations. The publication of the pay gap figures – which will thus be publicly accessible – may create additional pressure.
Preparing for the implementation of this legislation will require a considerable amount of work. Employers would be well advised to assess now whether their payroll processing and HR systems can provide the required data and, where necessary, to make the necessary adjustments in good time.
The online consultation for the Decree closed on 31 July 2026; comments on the Regulation and the reporting template may be submitted until 11 September 2026. Once the consultation period has ended, the responses will be assessed, and the Decree, the Regulation and the template may be amended where necessary. The bill itself must still be debated by the Dutch House of Representatives and the Dutch Senate. The legislation implementing the Pay Transparency Directive is therefore not yet final. We will keep you informed of further developments.