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Documentation of APW calculations for the Netherlands,
1997
Single APW:
In connection with the Dutch tax reform in 1990 some of the social contri-
butions for general social security, which until then had been paid by the
employer, were ’transferred’ to the wage earner. As compensation the em-
ployer pays a ’Compensation Allowance’ or ’Transfer Allowance’ to the
employees. This ’Allowance’ is taxable income for the wage earner. The
basis for the calculation of this ’Allowance’ is the gross wage plus the em-
ployers contribution to health insurance, minus the wage earners deductible
social contribution and expenditures connected to the acquisition of in-
come. The ’compensation’ rate was 10.4 per cent in 1990, 11 per cent in
1991, 11.5 per cent in 1992, 11.4 per cent in 1993, 11.6 per cent in 1994,
11.75 per cent in 1995, 10 per cent in 1996 and 9.9 per cent in 1997.
The system is briefly described in OECD’s ’The Tax/Benefit Position of
Production Workers 1987-90’, section IV, on the Netherlands.
The Dutch Ministry of Social Affairs and Employment has provided
information on the 1997 wage level.
1997
Insured
1)
Gross wage incl. compensation allowance
57,600 NLG
Of this:
Compensation allowance abbreviated C.A.
4,884 NLG
Gross wage excl. of C.A.
52,716 NLG
Tax and social security
22,308 NLG
2)
Disposable income
35,292 NLG
APW-couple: The husband has the same gross wage as the single APW, the wife has 50
per cent of that income. There are no children.
1997
Insured
1)
Gross wage incl. C.A.
86,383 NLG
C.A.
7,309 NLG
Gross wage excl. of C.A.
79,074 NLG
Tax and social security
31,004 NLG
Disposable income
55,379 NLG
1)
Unemployment insurance is mandatory in the Netherlands.
2)
Cf. the annex for a documentation.

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