How to Implement an Identified Staff Framework and Revise Your Remuneration Policy, Netherlands (2026)

On 19 May 2026 the Dutch legislature approved amendments that narrow the 20 % variable-to-fixed bonus cap so that it applies only to identified staff, rather than to every employee of a regulated financial institution. If you are an HR director, RemCo member, compliance officer or in-house counsel at a bank, insurer, investment firm or fintech, you now face an immediate operational project: determine which roles qualify as identified staff under the criteria set by De Nederlandsche Bank (DNB), update your remuneration policy, secure governance approvals, amend employment contracts, reconfigure payroll, and build the audit trail DNB expects.

This guide explains how to implement an identified staff framework in the Netherlands in 2026, step by step, with the documents, timelines, costs and pitfalls you need to plan for.

Overview of the Process and Who It Applies To

The 2026 reform replaces a blanket cap on variable remuneration with a targeted regime. Only staff whose professional activities have a material impact on the institution’s risk profile, “identified staff”, remain subject to the 20 % bonus cap. All other employees are released from that ceiling, though general principles of sound remuneration still apply.

The reform affects every entity supervised by DNB that is subject to the Dutch remuneration rules: banks, insurers, payment institutions, electronic money institutions, investment firms and, in many cases, their Dutch subsidiaries and branches. Fintechs holding a licence from DNB fall within scope as well.

At a high level, implementation requires eight deliverables:

• Final Identified Staff list. A documented register of every individual who meets the DNB criteria, with the legal basis for each classification.
• Updated Remuneration Policy. A modular policy that distinguishes between identified and non-identified staff and sets out cap, deferral and retention rules for each category.
• Governance approvals. Formal sign-off by the Remuneration Committee (RemCo), Supervisory Board and, where required, the Management Board.
• Contract amendments. Addenda reflecting the new variable-pay terms for each identified staff member.
• Payroll and system changes. Configuration of payroll, tax-reporting and pension systems to enforce the cap and any deferral mechanics.
• Works council consultation. Where the policy change triggers a right of consultation under Dutch labour law.
• DNB engagement file. A supervisory-ready package demonstrating how the tests were applied and decisions recorded.
• Ongoing monitoring process. A mechanism to reassess identified staff classifications at least annually.

Eligibility and Prerequisites: Who Counts as Identified Staff in the Netherlands?

DNB applies both qualitative and quantitative criteria to determine whether a person is identified staff. The criteria are drawn from European regulatory technical standards and transposed into DNB’s supervisory guidance on sound remuneration policies. An institution must apply these tests proactively; DNB does not issue individual classifications.

DNB Criteria, Quantitative Tests

Quantitative tests focus on the level of total remuneration and the authority attached to a role. They typically capture individuals whose total remuneration in the preceding financial year placed them in the top earning bracket of the institution, or whose variable component exceeded a defined absolute threshold. The precise thresholds should be verified against the current DNB guidance page on identified staff categories.

Qualitative Tests and Role-Mapping

Qualitative tests assess the nature of a person’s responsibilities: decision-making authority, exposure to material risk, oversight of critical functions (risk management, compliance, internal audit) and membership of senior management. DNB expects institutions to look beyond job titles and examine actual responsibilities.

The table below illustrates how role-mapping works in practice. It is not exhaustive; each institution must apply the tests to its own organisational structure.

Cross-border employees and contractors require particular attention. Where a Dutch-supervised entity employs staff in other jurisdictions, the identified staff assessment must still be performed. Secondees and contractors who exercise decision-making authority may fall within scope regardless of their contractual home base.

Step-by-Step Procedure to Implement the Identified Staff Framework in the Netherlands (2026)

The implementation timeline below summarises each step, the responsible function and the typical duration. The sections that follow expand on each step in detail.

Step 1, Launch the Project and Define Scope

Appoint a project sponsor (typically the Chief Legal Officer or Chief HR Officer) and assemble a cross-functional team: Legal, Compliance, Compensation & Benefits, Payroll, Finance and IT. Define which legal entities and jurisdictions fall within scope. Agree on a target go-live date, working backwards from the next Supervisory Board meeting and payroll cut-off.

Step 2, Map Roles and Pull Compensation Data

Extract the current organisational chart, job descriptions and compensation data for every employee within the supervised entity (and material subsidiaries or branches). The compensation team should flag every role that could trigger a quantitative test, while HR identifies roles with material risk-taking or decision-making authority. Output: a preliminary long-list of potentially identified staff.

Step 3, Apply DNB Tests and Finalise the Identification

Legal and Compliance review the long-list against the DNB qualitative and quantitative criteria. For each individual, document the test applied, the evidence relied upon and the classification decision. Where a borderline case arises, record the rationale for inclusion or exclusion. This documented assessment forms the core of the audit trail that DNB expects institutions to maintain. The DNB compliance steps at this stage should be treated as non-negotiable: incomplete documentation is one of the most common supervisory findings.

Step 4, Draft the Updated Remuneration Policy

Prepare a redline version of the existing remuneration policy Netherlands-wide. The key structural change is modularisation: one section sets out the rules applicable to identified staff (bonus cap, deferral, retention, malus and clawback), while a separate section addresses non-identified staff (where the statutory cap no longer applies). Include a schedule listing identified staff categories by function, not by name, to avoid unnecessary personal-data exposure. The policy should cross-reference DNB guidance and the legislative amendment.

Step 5, Secure Governance Approvals

The correct governance sequence is critical and must be followed in order:

1. The compensation or legal team presents the draft policy and Identified Staff list to the Remuneration Committee (RemCo) for review and recommendation.
2. RemCo issues a formal recommendation to the Supervisory Board.
3. The Supervisory Board formally approves the updated policy by written resolution, recorded in signed minutes.
4. The Management Board implements the approved policy and authorises contract amendments and payroll changes.

Allow for at least one full board cycle, typically 2–4 weeks, between the RemCo recommendation and Supervisory Board approval. If the Supervisory Board meets quarterly, this step alone could take up to 6 weeks. Calendar the approval windows at project kickoff.

Step 6, Amend Contracts and Consult the Works Council

Draft contract amendments (addenda) in both English and Dutch. Each addendum should reference the updated remuneration policy, state the effective date, describe the applicable variable-pay cap and any deferral or retention terms, and include tax-treatment language. Obtain each identified staff member’s signature and retain an acknowledgement receipt.

Where the policy change affects a remuneration scheme that falls within the works council’s right of consent under Dutch labour law, consultation with the works council is required. Allow sufficient time, statutory consultation periods can add several weeks. Early engagement with the works council reduces the risk of delay.

Step 7, Update Payroll, Pension and Tax Systems

Translate the policy into payroll configuration: cap the variable component for identified staff, set up deferral schedules, adjust tax-withholding codes and, where applicable, reconfigure pension contributions. Payroll changes in the Netherlands typically require coordination with an external payroll vendor. Engage the vendor early: lead times for one-off integrations can be 2–6 weeks depending on system complexity. Run a parallel test cycle before the effective pay period to verify that caps, deferrals and tax withholding calculate correctly.

Step 8, Engage DNB and Establish Ongoing Monitoring

DNB does not require an automatic filing of the Identified Staff list in all cases. However, supervised institutions are expected to apply the tests, retain comprehensive documentation and produce the audit trail on request. Where the reform results in a material change to an institution’s remuneration structure, for example, a significant reduction in the number of staff subject to the cap, early indications suggest that proactive engagement with DNB is advisable. File all records (policy, board minutes, signed amendments, role-mapping assessments) in a centralised compliance repository. Establish an annual reassessment cycle to capture new hires, role changes and departures.

Documents Needed for Implementation

The table below lists every document required to implement the identified staff framework. Maintaining a complete, audit-ready file is essential for DNB supervisory review.

Implementation Timeline and Key Deadlines

A realistic end-to-end implementation timeline for the identified staff framework runs 12–16 weeks for a mid-size institution. Larger organisations with multiple entities, cross-border staff or quarterly board cycles should plan for up to 20 weeks. The critical path runs through governance approvals and payroll vendor configuration, these two workstreams determine the earliest possible go-live date.

Three constraints regularly compress or extend the timeline. First, Supervisory Board meeting frequency: if the board meets quarterly, a missed agenda slot adds up to 12 weeks. Second, works council consultation: where required, the statutory consultation period must be factored in before contract amendments can be dispatched. Third, payroll vendor availability: peak periods (year-end, Q1 payroll updates) can double lead times. Plan accordingly and build buffer into the project schedule.

Costs, Fees and Tax Considerations

Implementation costs vary significantly by institution size, number of identified staff and the complexity of cross-border arrangements. The table below provides indicative ranges. All figures should be verified with advisers before budgeting.

Deferral, Retention and Tax Treatment

DNB’s supervisory guidance on remuneration requires that a minimum portion of variable remuneration awarded to identified staff is subject to deferral and, in some cases, retention. The deferral period, the portion deferred and retention requirements depend on the size and nature of the institution. Institutions should consult the current DNB guidance page on identified staff categories for the applicable percentages and periods.

For payroll changes in the Netherlands, deferred variable pay creates specific wage-tax timing questions. Under Dutch tax law, deferred remuneration is generally taxed at the time of vesting or payment, not at the time of award. For cross-border employees, the allocation of taxing rights depends on where the work was performed during the earning period, applicable tax treaties and social security coordination rules. Specialist tax advice is essential in these cases.

What Changes in 2026: The Bonus Cap Reform Explained

Before the 2026 amendment, the Netherlands applied one of the strictest bonus cap regimes in Europe: variable remuneration for all staff at supervised financial institutions was capped at 20 % of fixed remuneration. This blanket cap went further than the EU-wide requirement, which targeted only identified staff.

The amendment approved on 19 May 2026 aligns the Dutch regime more closely with the European approach. The 20 % cap now applies only to identified staff, those whose activities have a material impact on the risk profile of the institution. Non-identified staff are released from the statutory cap, although institutions remain free to impose internal caps and must continue to apply general principles of sound remuneration.

The operational implications are significant. Institutions must run a formal re-identification exercise, modularise their remuneration policy to distinguish between the two categories, and update contracts and payroll accordingly. Industry observers expect that DNB will focus supervisory attention on the quality of the identification exercise and the completeness of supporting documentation, rather than on the headline policy text alone. Institutions that applied the previous blanket cap without maintaining individual-level assessments will need to build this capability from scratch.

Common Pitfalls and How to Avoid Them

• Over-inclusive identification. Classifying too many employees as identified staff defeats the purpose of the reform and creates unnecessary contractual and payroll complexity. Apply the DNB qualitative and quantitative tests rigorously and document every inclusion and exclusion decision.
• Skipping or inverting the governance order. Presenting contract amendments to employees before the Supervisory Board has formally approved the updated policy exposes the institution to governance risk. Calendar each approval step at the start of the project and obtain written resolutions at every stage.
• Underestimating payroll vendor lead times. Payroll system changes cannot be implemented overnight. Engage vendors at the scoping stage, request a written implementation timeline and run a parallel test cycle before the effective pay period.
• Failing to consult the works council. Where the remuneration policy change triggers the works council’s right of consent under Dutch labour law, proceeding without consultation can invalidate the policy amendment. Identify the consultation requirement early and allow sufficient time in the project plan.
• Incomplete audit trail. DNB expects supervised institutions to produce, on request, a complete file showing how the identified staff tests were applied, which governance bodies approved the policy and when contracts were amended. Maintain a centralised repository from day one, retrospective assembly is time-consuming and error-prone.

Sources

1. De Nederlandsche Bank (DNB), Remuneration / Identified Staff Guidance
2. PwC Nederland, Proposed Bonus Cap Reform Update on Identified Staff (April 2026)
3. Highberg, Dutch Bonus Cap Reform Action Guide (June 2026)
4. Clifford Chance, Dutch Labour Law Updates 2026 (February 2026)
5. Business.gov.nl, Employer Guidance: Amendments Affecting Staff
6. Law & More, Dutch Employment Law in 2026
7. Netherlands Legislation Portal, wetten.overheid.nl