Dutch wage increases outpaced profits in 2025; Companies' share still well above 1995's

Wage increases in the Netherlands outpaced company profits in 2025, with the labour income share in the market sector increasing from 70.4% in 2024 to 70.6% in 2025. However, companies have been keeping more of their profits since 1995. In that year, the labour income share stood at 81.4%, Statistics Netherlands (CBS) reported on Wednesday, based on provisional figures.

The labour income share in the market sector measures the share of the country’s total income earned that goes to workers in the form of remuneration. The remainder forms corporate operating profits. The market sector is the entire economy except the public sector, education, health and social care, real estate activities, mining and quarrying, and financial services.

“The labour income share rose in 2025 because the income earned from labour increased more quickly than companies’ operating profits,” CBS said. “Labour income share rose slightly in 2024, too.”

The labour income share saw the biggest increase in the information and communication sector last year, rising from 77.2% in 2024 to 82.3% in 2025. The sectors agriculture, culture, leasing, special business services, and transportation and storage also recorded increases.

In the sectors of water and waste management and accommodation and food services, the labour income share remained stable. It declined in retail, energy supply, manufacturing, construction, and other services.

Over the past 30 years, the labour income share fell the most in the travel sector, dropping from 87.5% in 1995 to 21.4% last year. It increased the most in the chemical sector, climbing from 59.1% in 1995 to 92.8% in 2025.

According to CBS, the labour income share varies per sector based on the ratio between capital, such as machinery and vehicles, and staff. Companies that require more capital in their production process often employ fewer staff, so their wage costs are lower and their operating profits higher. Conversely, more labour-intensive sectors have more workers, and therefore a higher labour income share.

In the chemical sector, operating profits fell over the past three decades, while wage costs rose. For travel agencies and tour operators, both wage costs and profits rose, but operating profits increased by €8.6 billion, while wage costs rose only €1.8 billion, resulting in the labour income share falling by 66 percent in 30 years.