We often hear it from friends and family or notice it ourselves: the cost of living keeps rising. Yet, politicians frequently emphasize that we have strong purchasing power. But how does this really compare to other countries? And does that hold up when we consider how expensive life is elsewhere?
Average Annual Income at €31,981 #
First, let’s look at the average net annual income for a Dutch person in 2025. According to the Netherlands’ Central Bureau of Statistics (CBS), the gross figure is €46,500. However, CBS provides this number before taxes and premiums. Eurostat, the European statistical office, adjusts for these factors to enable a fair comparison with other countries. This brings the Dutch average net income to €31,981.
Looking at other European nations, we see that countries like Norway, Denmark, and Austria have gross annual incomes of €40,432, €34,843, and €33,210, respectively. In this income ranking, the Netherlands sits in sixth place, just behind Ireland and ahead of Belgium. However, a high annual income doesn’t provide a realistic picture of purchasing power on its own. A high salary in an expensive country offers fewer advantages than it might seem.
Purchasing Power Puts the Netherlands in a Better Position #
To get a more accurate picture, we turn to the “Purchasing Power Standard” (PPS). This metric, calculated by Eurostat, measures the actual purchasing power of European countries. The agency examines the cost of a standard basket of goods and monthly expenses in each country and compares it to the average annual income.
When viewed through this lens, the ranking looks quite different. Luxembourg remains at the top, but the Netherlands has climbed one spot higher. From this, we can conclude that while our average annual income might be lower than in some countries, our cost of living is also slightly lower. As a result, our net purchasing power is marginally higher.
The most significant jump belongs to Poland. Its residents have an average annual income of just €11,921. However, their purchasing power is estimated at €18,064. This leap moves Poland up to 17th place, a significant rise from its previous 23rd position.
Netherlands Sits Between Europe’s Top and Sub-Top #
According to this analysis, our country is in a relatively favorable position. Although groceries and living expenses have certainly become more expensive, our incomes have apparently risen enough to limit the impact.
Ultimately, the Netherlands finds itself between the top and sub-top of Europe. It may not be where we aspire to be, but it could certainly be a lot worse.