A significant legislative proposal was adopted by the House of Representatives in the Netherlands on 4 February 2026 to narrow the scope of the Dutch bonus cap in the financial sector. This is a major shift in the Dutch remuneration landscape, moving the regime closer to the European Union approach on who is caught, while keeping the Dutch 20% cap in place for identified staff.
What is the amendment?
Under the current Dutch framework, the 20% variable‑to‑fixed remuneration cap applies broadly to all staff of in‑scope financial institutions. The new legislation will fundamentally change that position by:
- Limiting the cap to “identified staff”
- The 20% bonus cap will no longer apply to all employees.
- Instead, it will apply only to natural persons whose professional activities have a material impact on the institution’s risk profile, in line with the “identified staff” concept under the EU Capital Requirements Directive.
- In practice, this means many employees will fall outside the cap.
- Limiting related requirements to “identified staff”
- The requirement that variable pay should be based on at least 50% non-financial criteria;
- The requirements regarding retention bonuses;
- The requirements regarding annual disclosure;
- The retention period for financial instruments awarded as part of fixed remuneration.
Why is this a big deal?
The legislation responds to concerns identified in a 2024 evaluation of the bonus cap regime and reflects broader political and market debate. The explanatory notes highlight that the current Dutch regime:
- is significantly stricter than the EU framework, because it combines a lower cap with a much broader scope;
- is seen as hampering the competitiveness of Dutch financial institutions, particularly when competing for global talent;
- complicates recruitment and retention of specialised personnel, including IT professionals and other experts who are critical to innovation, digital transformation and cyber security; and
- may discourage financial institutions from locating or relocating activities to the Netherlands, including in a post‑Brexit context.
By limiting the cap to staff who materially influence the institution’s risk profile, the legislation aims to improve the Dutch business climate and talent pool, while:
- maintaining a strict 20% cap for those roles where variable remuneration can most directly affect risk‑taking behaviour; and
- preserving the objectives of reducing perverse incentives, protecting customers and safeguarding financial stability.
What happens next?
- The legislative proposal will now go to the Dutch Senate.
- The envisaged further timeline is currently unclear.
What should firms do now?
When adopted by the Senate as well, financial institutions in the Netherlands may wish to:
- Assess potential impact on their current remuneration structures.
- Map staff populations against the EU “identified staff” criteria.
- Monitor political and regulatory signals, as these may impact implementation.
- Consider how any change could affect talent strategy, retention and hiring, especially for specialist and technical roles.
If you would like to discuss what this proposal could mean for your organisation or for your identified staff population, please contact Vincent Gerlach and Jill Reijnen Husagić.
