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I'm a biochemistry Ph.D. student in the United States considering a postdoctoral fellowship at a private institute in Utrecht, the Netherlands. It would be the best next step in my career, but I'm unsure if it's financially realistic.

If I've calculated correctly, according to the salarischaal I'd come in around EUR 3303/mo. (at a 10-5, a new postdoc right out of my Ph.D.). Multiplying by 14 would put my annual income at 46242 euros, correct?

https://www.vsnu.nl/files/documenten/CAO/Salarisschalen%20per%201%20mei%202018.pdf

This doesn't account for tax. I believe I'd be eligible to receive the first 30% of my salary tax-free, leaving 70% of my salary subject to a 40.85% tax )of EUR 13,222):

https://www.expatax.nl/tax-rates-2018

That means I'd end up with about 33,020 Euros after tax, correct?

I'm married and have two kids. Complete care coverage is a necessity, my understanding is that this would not typically be provided to me as a post-doc but I would need to buy it on my own. Does this sound normal?

I'm a US citizen, but my wife is a Dutch citizen (with a US green card). Does her Dutch citizenship change how I would be taxed if she decided to get a job over there?

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    Hi there, welcome. I might have missed something very obvious here - can you please clarify why you use a conversion factor of 14 when you convert the monthly income to annual income? – B.Liu Jan 15 at 15:35
  • One month's equivalent of holiday pay and one month's equivalent of year-end bonus. – Wagtail Jan 16 at 17:48
  • If your spouse established residency in Netherlands, she may lose her US Permanent Resident status ("green card") and might need to apply for a new one. But she might become naturalized US citizen due your marriage (takes time, 1-2 years) and also keep her Dutch citizenship, so she is not in the danger of losing "green card". – Peter M. Jan 22 at 22:49
  • How old are you? This will make a big difference. – Relaxed May 25 at 22:05
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How the system works (roughly):

  • Income tax: It's a somewhat standard progressive income tax, with ~4 brackets. This means that your calculation is incorrect: Only the part of your income above €20,142 would be taxed at 40.85%. Using a simulator and without accounting for any rebates or additional income you might have, I find that €46,242 before-tax will leave you with €32,746, which corresponds to a 29.19% effective tax rate, well below 40.85%.

  • Tax credits: You would not pay income tax on your whole income. The simulator takes a generic income-dependent tax credit (algemene heffingskorting) into account but you might also qualify for additional tax credits and/or subsidies, especially if your partner works and you have to pay for daycare.

  • 30% ruling: This one is a bit complicated. The way this actually works is that you remove the tax-free allowance before computing the income tax rate. So it doesn't only reduce the taxable income but also the effective tax rate on the income that's still taxable.

    There is however a big caveat: Your taxable income must be above €37,743 after the discount. For a €46,242 yearly income, it means you could only get €8,499 deducted from your income (i.e. 18% instead of 30%). But there is also a special rule for people who have at least a master's degree and are under 30. In that case, the threshold €28,690 and you could get the full 30% tax-free allowance.

  • Health insurance: In the Netherlands, insurance is never “provided“ but it's mandatory to take private health insurance. Your employer will typically have negotiated a discount with one or two insurers but you're free to shop on the open market too. The coverage is highly regulated and subsidized so that you are paying nowhere near the real price (the rest actually comes from some of the “premium national insurance” that are withheld together with the income tax). Without dental coverage or extra insurance, you should expect to pay €200/month for the two of you. You don't have to pay a premium for kids under 18.

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Your salary calculation seems to be correct - but in some cases you could get extra years-of-experience calculated, e.g. if you were in industry before.

On the other hand you are over-estimating your tax rate - misinterpreting the table. The part of your salary which fits in the lower bracket is taxed at that bracket, and only the rest, above it, is taxed at the second bracket and so on.

Finally, yes, you buy health care coverage on your own. But decent coverage is much much much cheaper in the US.

Some additional bits of info:

  • Some institutions have a small allowance for Internet access (20 EUR at the CWI)
  • The CAO (at least, the NWO CAO I worked under a few years ago) also lets you convert some vacation days into salary if you want. Seeing how the number of vacation days is much higher than in the US, this might be relevant for you.
  • Remember there are non-tax deductions: Retirement savings deduction and disability insurance deduction (WIA-WGA).
  • If you take the "30% deduction" - you will only have unemployment insurance on the remaining 70% of your salary. This could be significant if you don't find other work immediately after your post-doc.
  • A related question: How is net income in Netherlands calculated? (on Money.SX)
  • The OP would be a post-doc, not a PhD. – Relaxed May 25 at 22:02
  • @Relaxed: Right, fixed. – einpoklum May 25 at 22:16

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