Low-income workers in the Netherlands have received a New Year boost, as the statutory minimum hourly wage has risen by 2.15% – an increase of €0.31 – from 1 January. For a 40-hour week, that translates into a gross monthly equivalent increase of about €53. However, owners of small and medium-sized enterprises (SMEs) warn that repeated pay rises are squeezing margins and making it harder for some firms to stay viable.
Before 2024, the Netherlands did not have a single national minimum hourly wage. Instead, the legal minimum was set as fixed amounts per month, week and day, tied to what counted as a full working week. Because ‘full-time’ hours differed under collective labour agreements (CAOs), the implied hourly minimum could vary, meaning some workers effectively earned less per hour for longer weeks. From 1 January 2024, the government switched to a universal statutory minimum hourly wage, adjusted twice a year in January and July.
SME trade bodies say the steady rise in both the adult minimum wage and youth rates is now feeding directly into costs and hiring decisions. Their concern is that in sectors with large numbers of younger staff, higher wages eat into thin margins, which could mean fewer hours or fewer entry-level jobs. Accountancy firm Van Oers has warned that increases can trigger a ‘domino effect’ across pay scales because ‘employees earning just above the minimum wage may feel disadvantaged if their salary becomes (almost) equal to the minimum wage’.
Trade unions, however, frame the rise as a question of basic fairness and purchasing power rather than a burden to be minimised. They argue the minimum wage is meant to protect workers at the bottom of the labour market from falling behind during a cost-of-living squeeze. FNV has backed the shift to a universal hourly minimum introduced in 2024, saying: ‘Since 2024 you actually get paid for every hour you work.’
That pressure is visible in labour-heavy retail. Pauline Broekman, co-owner of Utrecht fashion retailer Broekman Mode, hosted a debate in her shop ahead of the October election and said minimum-wage proposals would land on high streets first. ‘All costs have risen in recent years and then this comes on top,’ she said. During the event, VVD candidate Arend Kisteman framed the hiring risk bluntly: ‘You won’t hire staff as an entrepreneur with such a rise… labour costs are already so high.’ Broekman also pointed to youth wages, which many shops rely on for weekend shifts. ‘Abolishing the youth minimum wage from 18 has an enormous impact… hiring an employee now costs a tenner extra,’ she said.
Retail margins leave little room for error. ING retail expert Dirk Mulder said non-food retail currently retains about 8.1% of each €100 in net turnover before tax, interest and the entrepreneur’s own income, and warned that higher wages would stack on top of rising rents, energy bills and supplier costs.
The debate over the economic benefits comes amid a continuing cost-of-living squeeze for Dutch households. An ABN AMRO analysis published in October 2025 found that the share of net income spent on household bills has fallen. But it also noted that grocery prices are now roughly 20% higher than three years ago, keeping day-to-day pressure on household budgets. Taken together, ABN AMRO’s figures suggest the average household still spends just over half of its net income on bills and groceries. With D66 leader Rob Jetten leading coalition talks, the balance between higher pay and higher prices looks set to be a defining domestic issue for the next cabinet.
Written by James Turrell