Philippines vs Netherlands Offshore Developer Costs in 2026

A software engineer in the Netherlands earns about seven times what one in the Philippines earns, on the same Levels.fyi title. A Dutch employer then adds about 22% on top in premiums and holiday allowance. A Manila engineer on an afternoon shift can cover most of an Amsterdam working day.

Those three facts frame the Philippines vs Netherlands offshore developer costs question. The rest comes down to pay, employer costs, the clock, English, exit rules and the cost of a five-person team.

What a software engineer earns in each country

Levels.fyi reports total pay for the same “Software Engineer” title in both countries. Read on 19 October 2026, the Netherlands page gives a median of €94,840 a year from 1,437 submissions. The Philippines page gives ₱967,890 from 97 submissions.

At the European Central Bank reference rates for 19 October 2026, through the Frankfurter API, one dollar bought EUR 0.89087 or PHP 62.998. That puts the Dutch median at about $106,458 and the Philippine median at $15,364.

The gap does not close at any point in the range. The Philippine 75th percentile is less than a third of the Dutch 25th percentile, so a senior-band Filipino engineer still costs a fraction of a junior-band Dutch one in salary.

For a wider view, our nearshore vs offshore cost comparison sets the Philippines against eight other countries, and our guide to offshore developer rates in US dollars breaks rates down by role.

Employer costs in the Netherlands

A Dutch payroll has two layers on top of salary: employee insurance premiums and the health insurance levy, both paid by the employer, and a holiday allowance owed to every employee. The Belastingdienst publishes the 2026 rates in its annex to the payroll tax newsletter.

Unemployment insurance, AWf. The low rate of 2.74% applies to a permanent contract that is in writing and is not an on-call contract. Other contracts pay the high rate of 7.74%, unless an exception applies, as the Belastingdienst explains. A startup hiring engineers on permanent contracts pays the low rate.

Disability insurance, Aof, plus the childcare surcharge. The Aof rate is 6.27% for small employers and 7.63% for medium and large ones, per the Belastingdienst’s guide to employee insurance contributions. A small employer is one whose 2024 premium wage bill was no more than €1,082,500, which covers a team of five at the Dutch median. Every employer also pays a 0.50% surcharge, the opslag Wko, which funds childcare.

Return-to-work fund, Whk. This premium differs by employer and sector, and the Belastingdienst sets it per company by notice. UWV puts the 2026 averages at 0.96% for the WGA part and 0.56% for the Ziektewet part, 1.52% in all. The calculation here uses that average.

Health insurance levy, Zvw. The employer levy is 6.10% in 2026.

All four premiums stop at a maximum premium wage of €79,409 a year. The Levels.fyi median of €94,840 sits above that cap, so the last €15,431 of a median engineer’s pay carries no employer premiums. At the cap the four add up to €13,603 a year, or 14.4% of the median salary.

Holiday allowance. Employees are entitled to at least 8% of their gross annual salary as holiday pay, usually paid in May or June, per business.gov.nl. The premium cap does not limit it.

Pension. No national law requires an employer pension, but a compulsory sector pension fund or a collective labour agreement can, per business.gov.nl’s pension guide. Whether a software company falls under one depends on its sector, so the figures below leave pension out. If it applies, add it.

Computed from the sources above at each country's Levels.fyi median, 19 October 2026.

One caveat on the Dutch figure: some Levels.fyi submitters report pay that already includes holiday allowance. For those salaries, take 8 points off the 22.4%.

Employer costs in the Philippines

The Philippine items are smaller, and the largest are capped at low salary levels.

SSS. The Social Security System charges 15% of the monthly salary credit, with the employer paying 10% and the employee 5%, on a credit capped at ₱35,000, according to SSS. The employer also pays ₱30 a month for employees’ compensation cover. On a median engineer’s ₱80,658 a month, the employer’s share stops at ₱3,530, or 4.4% of pay.

PhilHealth. The premium is 5% of monthly basic salary, between a ₱10,000 floor and a ₱100,000 ceiling, per PhilHealth Advisory 2025-0002. A 2026 advisory keeps the 5% rate. Employer and employee split it equally, as Sprout’s worked example shows, so the employer pays 2.5%.

Pag-IBIG. Employers remit 2% of a monthly fund salary that tops out at ₱10,000 since February 2024, per Forvis Mazars’ summary of Circular 460. That is ₱200 a month at most.

13th-month pay. Presidential Decree 851 requires one-twelfth of the year’s basic salary, paid by 24 December. It adds 8.3% to annual pay.

Night shift differential. Article 86 of the Labor Code adds at least 10% of the regular wage for each hour worked between 10pm and 6am. A Dutch buyer triggers little of it. On a 3pm to 11pm shift, one hour in eight qualifies, which adds 1.25% to pay. A 2pm to 10pm shift avoids it entirely.

The SSS and Pag-IBIG caps bite early, so their share of pay shrinks as salary rises, while the 13th month stays at 8.3%.

Time zones and working overlap between Amsterdam and Manila

Manila runs on UTC+8 and has not observed daylight saving since 1991, as the Philippine Standard Time entry records. Amsterdam runs on UTC+1 in winter and UTC+2 in summer time, which runs from the last weekend of March to 25 October in 2026, per the Dutch government. Manila is six hours ahead of Amsterdam in summer and seven in winter.

On a standard 9am to 5pm Manila day, the Filipino engineer finishes at 11am Amsterdam time in summer and 10am in winter, leaving time for a standup and little else.

Shift the Manila day into the afternoon and the overlap jumps:

• 2pm to 10pm Manila covers 8am to 4pm in Amsterdam in summer and 7am to 3pm in winter. That is 7 shared hours in summer and 6 in winter, with no night differential.
• 3pm to 11pm Manila covers the full 9am to 5pm Amsterdam day in summer and 8am to 4pm in winter. That is 8 shared hours, then 7, for a 1.25% differential.

For a US company the sum differs: Amsterdam is six hours ahead of New York for most of the year, and Manila 12 to 13. Our UK comparison works through a similar European clock.

English in the Netherlands and the Philippines

The EF English Proficiency Index 2025 ranks the Netherlands first of 123 countries, with a score of 624. Amsterdam scores 630. The Philippines ranks 28th with 569, and Manila scores 603.

Both scores are high enough that English rarely decides between the two. They are averages across adults who take the test, not engineers, so test each candidate anyway.

Probation, notice and ending a contract

The two systems differ most in how an employer ends a permanent contract. None of this is legal advice.

The Netherlands. A permanent contract can carry a trial period of up to 2 months, per business.gov.nl. After it, ending a permanent contract without the employee’s consent needs outside approval. Dismissal for economic reasons or long-term incapacity needs permission from UWV, and dismissal for other reasons, such as poor performance, goes to the subdistrict court, as the dismissal procedures page sets out.

The employer’s notice period starts at one month and rises by a month for every five years of service, to a maximum of four months, per business.gov.nl. On dismissal the employee is owed a transition payment of a third of a month’s gross wage for each year worked, per the transition payment guide. At the Levels.fyi median that is about €2,600 a year of service. Rijksoverheid caps it at €102,000 in 2026, or one year’s gross salary if that is higher. Employer and employee can also end the contract by mutual consent in a settlement agreement.

The Philippines. The Labor Code caps probation at six months. An employee who resigns gives at least one month’s written notice. An employer that cuts a role for redundancy serves written notice on the employee and the labour department at least one month ahead and pays at least one month’s pay per year of service.

The Dutch leave rule is on business.gov.nl, the Philippine one in Article 95 of the Labor Code. The six-month Philippine probation gives an employer three times as long to judge a hire as a Dutch permanent contract does.

What five engineers cost for a year

These are direct-employment figures for five engineers at each country’s median: salary plus the statutory costs above, at the 19 October rates.

The Dutch team costs about 1.8 times the top of our range and 4.3 times the bottom. The afternoon shift that buys a Dutch working day adds about $1,000 a year to the whole Philippine team.

The direct figures leave out three things:

• A pension, where a sector fund or collective agreement makes one compulsory.
• The cost of employing anyone at all: a local company or an employer of record, payroll, recruiting, laptops and the time spent replacing a hire who leaves.
• The spread around the median, which the pay chart shows is wide in both countries.

One Dutch factor can cut the gross cost of a foreign hire. Under the expat scheme, an employer can pay a qualifying employee recruited from abroad part of their wages tax-free: 30% in 2026, falling to 27% from 1 January 2027 for employees who started after 1 January 2024, with a salary threshold rising from €46,107 to €50,436, per business.gov.nl. It changes what an engineer takes home for a given gross salary. It does not touch the premiums or the holiday allowance.

Our Germany comparison runs the same model for another high-pay European market.

When the Netherlands wins, and when the Philippines does

The Netherlands fits when

• The engineer works on site in Amsterdam, or with Dutch customers who expect a local team.
• The role needs Dutch, for customer contact or for regulated work in Dutch.
• The work runs on long in-person sessions: workshops, pairing at the same desk, live incident response across the whole Dutch day.
• You already run a Dutch payroll and know your sector’s pension obligations.

The Philippines fits when

• Six to eight hours of shared time is enough, on a 2pm or 3pm Manila start.
• You are hiring several engineers and want the per-head saving to compound.
• You want six months of probation to judge a hire, and an exit you can price in advance.
• The team already works in writing: tickets, pull requests, recorded demos and async review.

Some teams keep a Dutch lead or product owner in Amsterdam and build the rest of the team with Filipino offshore developers. Our guide to managing offshore developers covers how to run that split day to day.

Hire offshore developers with Hire Offshore

We do not hire in the Netherlands. We hire in the Philippines, Vietnam and India, and we shortlist 6 to 8 vetted offshore developers within 24 hours and complete the hire in 2 weeks. The monthly fee of $2,499 to $5,999 covers salary, payroll, equipment and employment, with no upfront cost and a 90-day replacement guarantee.

We agree the working schedule before the offer, so an Amsterdam team can set the afternoon Manila shift from day one. Filipino offshore developers cover stacks such as PHP and Java. See how it works, check pricing or send us the role.

FAQ

Is the Philippines or the Netherlands cheaper for software engineers?

The Philippines, by a wide margin. Median software engineer pay on Levels.fyi is about $15,400 a year there against $106,500 in the Netherlands, and Dutch employer premiums and holiday allowance add about 22% at the median, against about 15% in the Philippines.

What does a Dutch employer pay on top of salary in 2026?

At least 8% holiday allowance, plus employer premiums for unemployment (AWf, 2.74% on a permanent contract), disability (Aof, 6.27% for a small employer, plus a 0.50% childcare surcharge), the Whk (1.52% on average) and the Zvw health levy (6.10%). The premiums stop at €79,409 of pay a year.

How many hours does a Manila developer overlap with an Amsterdam team?

One to two hours on a standard 9am to 5pm Manila day. On a 2pm to 10pm Manila shift the overlap is 6 to 7 hours, and on a 3pm to 11pm shift it is 7 to 8 hours, depending on whether Amsterdam is on summer or winter time.

Do Filipino offshore developers need a night shift to work European hours?

No. A 2pm to 10pm Manila shift avoids the night differential entirely and still covers 6 to 7 hours of an Amsterdam day. A 3pm to 11pm shift has one hour after 10pm, which adds 1.25% to pay under the Labor Code.

Is it harder to let an employee go in the Netherlands?

Yes, for a permanent contract after the 2-month trial period. The employer needs UWV permission or a court order, gives 1 to 4 months’ notice and pays a transition payment of a third of a month’s wage per year of service. In the Philippines a redundancy costs one month’s notice and one month’s pay per year of service, after a probation of up to six months.

Does the 30% ruling make Dutch engineers cheaper to hire?

It lowers the tax on a qualifying foreign hire’s pay, so the same gross salary leaves more in their pocket. The tax-free share is 30% in 2026 and falls to 27% from 1 January 2027 for employees who started after 1 January 2024. It does not reduce the employer’s premiums or the holiday allowance.

Which country has better English, the Netherlands or the Philippines?

The Netherlands ranks first of 123 countries on EF’s English Proficiency Index 2025 with a score of 624. The Philippines ranks 28th with 569, and Manila scores 603.