Relocation from Israel to Amsterdam, Netherlands
Employee Income and Employer Cost Analysis
Work Assumptions
- The relocation assignment is for 2 years. The assignee is married. His spouse will relocate with him.
- The current monthly Base Salary of the assignee is 44,000. The assignee is also entitled to an annual actual bonus of 460,000 Nis.
- During the assignment the Base Salary and actual bonus will not change and the assignee will be entitled to a Relocation Allowance (including COLA) equalizing the current level of Total Free Income.
- Contributions to Managerial Insurance plan and to Education Fund are according to base salary. The employee contribution rates are 5% to Managerial Insurance program and 2.5% to Training Fund. The employer contribution rates are 13.33% and 7.5% respectively. In case the assignee will be employed under an Israeli payroll (Scenario B) those contributions will continue according to the current rate.
- The assignee is currently entitled to a company car (class 4). This status will remain during the assignment.
- The assignee currently resides in a 4-Bdr accommodation. During the assignment, the company will cover the lease of a 3-bdr furnished apt.
- The assignee and his spouse will be covered by a Medical Insurance plan financed by the company.
- All calculations are annual.
- All tax calculations are hypothetical.
- The exchange rates used are 5.0Nis and 1.3US$ to 1.0€.*The tables are better to be shown in the pdf file.
| Annual Employee Income Analysis | |||
| Scenario A: | Scenario B: | Scenario C: | |
| Base Salary Actual Bonus Relocation Allowance (including COLA) Company Car/Car Allowance Annual Net Salary National Health Cont. Payment+RISK Insurance Annual Spendable Free Income | Current Status In Israel Nis € ₪ 528,000 € 105,600 ₪ 460,000 € 92,000 ₪ 0 € 0 ₪ 0 € 0 ₪ 67,200 € 13,440 ₪ 1,055,200 € 211,040 ₪ 26,400 € 5,280 ₪ 13,200 € 2,640 ₪ 54,990 € 10,998 ₪ 0 € 0 ₪ 397,684 € 79,537 ₪ 0 € 0 ₪ 495,726 € 99,145 ₪ 159,969 € 31,994 ₪ 35,040 € 7,008 ₪ 0 € 0 ₪ 300,717 € 60,143 ₪ 74,288 € 14,858 ₪ 52,800 € 10,560 ₪ 427,805 € 85,561 | Future Status During Assignment | |
| Israeli Payroll € 105,600 € 92,000 € 34,707 € 32,400 € 18,000 € 282,707 € 5,280 € 2,640 € 10,998 € 0 € 20,078 € 87,435 € 105,875 € 38,724 € 7,008 € 0 € 60,143 € 14,858 € 10,560 € 85,561 | Dutch Payroll € 105,600€ 92,000€ 36,293 € 32,400 € 18,000 € 284,293 € 0 € 0 € 0 € 10,415 | ||
| € 8,436 | |||
| € 88,013 € 135,465€ 38,724€ 7,008€ 2,559 € 87,174 € 0 € 0 € 87,174 | |||
Example
| Annual Employer Cost Analysis | |||
| Scenario A: | Scenario B: | Scenario C: | |
| Base Salary Actual Bonus Relocation Allowance (including COLA) Accommodation Allowance Company Car/Car Allowance Israeli Social Taxes (employer contributions) Dutch Social Taxes (employer contributions) Managerial Insurance (employer contributions) Education Fund (employer contributions) Medical Insurance Annual Compensation Cost | Current Status In Israel Nis € ₪ 528,000 € 105,600 ₪ 460,000 € 92,000 ₪ 0 € 0 ₪ 0 € 0 ₪ 67,200 € 13,440 ₪ 28,110 € 5,622 ₪ 0 € 0 ₪ 70,224 € 14,045 ₪ 39,600 € 7,920 ₪ 0 € 0 ₪ 1,193,134 € 238,627 | Future Status During Assignment | |
| Israeli Payroll € € 105,600 € 92,000 € 34,707 € 32,400 € 18,000 € 7,020 € 2,591 € 14,045 € 7,920 € 8,210 € 322,493 | Dutch Payroll € € 105,600 € 92,000 € 36,293 € 32,400 € 18,000 € 0 € 7,873 € 0 € 0 € 8,210 € 300,376 | ||
Direct Relocation Cost Analysis (One-Time)
| Visa Process | € 3,650 |
| Pre-Departure Visit (1 week, assignee + spouse) | € 2,768 |
| Tax Consulting | € 1,000 |
| Settling-in Allow./Expenses (hotel, rented car, furniture rental, ground t., overweight, misc.) | € 7,000 |
| Real Estate Commission | € 2,700 |
| Shipment Allowance (20′ container, both ways) | € 11,870 |
| Home-Leave (annually, flights _ rented car + hotel) | € 7,108 |
| Repatriation Allow./Expenses (hotel, rented car, furniture rental, ground t., overweight, misc.) | € 4,000 |
| Flights (one way at the beginning & end of assignment) | € 2,084 |
| Total Direct Relocation Cost | € 42,180 |
Summary/Conclusions
- Base Salary – In order to equalize the current level of Total Free Income (Approx. €86K), The annual Relocation Allowance should be Approx. €35K under the Israeli Payroll (Scenario B) and Approx. €36K under the Dutch Payroll (Scenario C).
- Compensation Cost – In order to equalize the current level of Total Free Income (Approx. €86) the annual Compensation Cost will increase by Approx. €87K under the Israeli payroll (Scenario B) and by Approx. €65K under Dutch Payroll (Scenario C) (Approx. €239K, Approx. €325K and Approx. €303K respectively).
- Direct Relocation Cost – the Total Direct Relocation Cost is Approx. €43K.
- Israeli Vs. Dutch Payroll – there is a tax advantage to the Dutch payroll as the annual Compensation Cost is lower by Approx. €2.2k.
- Tax Exposure – under Dutch payroll, the employee will be exposed to an annual Israeli income tax of Approx. €8K in case he will be defined as an Israeli resident during the assignment.
- Cost of Living – The monthly Expenditure Rate (including Accommodation, Car and G&S) for a married couple in Amsterdam is Approx. €7.7k.
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