Dutch financial sector bonus rules revised: broader scope for competitive pay

On 19 May 2026, the Dutch Senate adopted the Act on Cash Payments and Adjustment of the Scope of the Bonus Cap. Although this Act mainly contains measures to keep cash accessible and affordable, it also includes an important change for employers in the financial sector: through this act the Dutch bonus cap in the financial sector will be applied in a much more targeted way. For financial companies such as banks, insurers, payment institutions etc., this may affect remuneration policies, employment terms, recruitment and retention.

In the Netherlands, many companies in the financial sector are currently subject to a strict bonus cap of 20% of fixed remuneration. This cap applies to almost all employees working under the responsibility of a financial company. As a result, the Dutch regime is stricter than the European framework.

In the Netherlands, this strict bonus cap was regarded as an obstacle for Dutch companies in the financial sector in attracting and retaining talent, particularly in specialist roles such as IT, data, cybersecurity and other scarce areas of expertise. The bonus cap was also identified as a factor that could discourage financial institutions from establishing operations in the Netherlands.

Legislative change: bonus cap for identified staff

The core of the legislative change is that the 20% bonus cap will no longer apply to all employees of financial undertakings, but in principle only to individuals whose activities can materially affect the risk profile of the financial undertaking: the so-called “identified staff”.

Identified staff will in any event include the management board, managers of departments with internal control functions, managers of certain departments such as those responsible for compliance with anti-money laundering and counter-terrorist financing rules, and managers of material business units. A material business unit is a department that accounts for at least 2% of the bank’s own funds or generates material sources of income. In addition, individuals earning a certain level of remuneration may also qualify as identified staff; in principle,  this may apply from an annual gross remuneration of EUR 500,000. Importantly, the “collective labour agreement exception” to the Dutch bonus cap, under which variable remuneration of up to 100% may be permitted in exceptional cases, will only remain relevant for identified staff, as it no longer applies to non-identified staff.

For employees who do not qualify as identified staff (non-identified staff), the statutory 20% bonus cap will therefore cease to apply. For employers, this is particularly relevant for roles where remuneration plays an important part in competing for talent, such as IT specialists, data experts, cybersecurity professionals and commercial roles without a material impact on the company’s risk profile.

The following obligations for employers will also cease to apply regarding non-identified staff:

• the obligation to use 50% non-financial performance criteria for variable remuneration;
• the disclosure obligation relating to the total annual variable remuneration paid;
• restrictions on retention bonuses; and
• the obligation to apply a five-year holding period for shares or related financial instruments awarded as fixed remuneration.

That said, the change does not mean that employers will be free to award unlimited bonuses to employees who do not qualify as identified staff. Financial undertakings will remain required to maintain a sound and controlled remuneration policy. General employment law standards will also continue to apply, including good employer practice, equal treatment, (pay)transparency, careful amendment of employment terms and clear bonus criteria.

Although the change removes restrictions for large groups of employees, it also creates new points of attention for the employers. These include the need to classify employees into identified and non-identified categories. For each role, it will have to be carefully assessed whether an individual qualifies as identified staff. Job title alone will not always be decisive; the focus should be on the actual duties, responsibilities and impact on the risk profile. Financial institutions will also need to review and update their remuneration policies.

Points of attention for employers in the financial sector

The adjustment of the bonus cap gives financial undertakings more flexibility to offer competitive remuneration packages to employees who do not have a material impact on the risk profile. At the same time, remuneration in the financial sector remains regulated.

The date on which the legislative change will enter into force is not yet known. Employers in the financial sector would therefore be well advised to start preparing now. Identify which roles may qualify as identified staff, properly document the analysis and review existing bonus arrangements, employment contracts, employee handbooks and remuneration policies.