Relocation from Israel to Amsterdam, Netherlands

Employee Income and Employer Cost Analysis

Work Assumptions

  1. The relocation assignment is for 2 years. The assignee is married. His spouse will relocate with him.
  2. 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.
  3. 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.
  1. 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.
  2. The assignee is currently entitled to a company car (class 4). This status will remain during the assignment.
  3. The assignee currently resides in a 4-Bdr accommodation. During the assignment, the company will cover the lease of a 3-bdr furnished apt.
  4. The assignee and his spouse will be covered by a Medical Insurance plan financed by the company.
  5. All calculations are annual.
  6. All tax calculations are hypothetical.
  7. 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)
Accommodation Allowance

Company Car/Car Allowance
Gross Compensation
Managerial Insurance (employee contributions)
Education Fund (employee contributions)
Israeli Social Taxes (employee contributions)
Dutch Social Taxes (employee contributions)
Israeli Income Tax
Dutch Income Tax

Annual Net Salary
Goods and Services Accommodation

National Health Cont. Payment+RISK Insurance

Annual Spendable Free Income
Managerial Insurance (total contributions)
Education Fund (total contributions)
Annual Total 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

  1. 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).
  1. 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).
  2. Direct Relocation Cost – the Total Direct Relocation Cost is Approx. €43K.
  3. Israeli Vs. Dutch Payroll – there is a tax advantage to the Dutch payroll as the annual Compensation Cost is lower by Approx. €2.2k.
  4. 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.
  5. Cost of Living – The monthly Expenditure Rate (including Accommodation, Car and G&S) for a married couple in Amsterdam is Approx. €7.7k.