End-to-End Employer of Record Services for the Netherlands
Hire employees in the Netherlands with expert Employer of Record services
Employing in the Netherlands
The Netherlands is one of the top three countries in which our clients choose to base their employees. Why so popular…?
As our own business development manager can attest from a recent trip, everyone speaks English (and much of the wider workforce is multi-lingual). Having such a prevalence of fluent speakers of the world’s language of business is extremely attractive, especially for US businesses seeking a suitable landing place for their expansion into Europe.
Sandwiched between European superpower Germany, the de facto capital of the EU Belgium and the marine transport links of the North Sea, the Netherlands is geographically well-placed to do business across Europe.
Richer than Germany and the United Kingdom (the other countries featuring in our top three expansion targets) by GDP per capita, the Netherlands has a consistently growing economy. As a result, many multinational businesses with household names have established their presence there. Will your business be the next to thrive in the kingdom of the low countries?
Contents
Our Expertise
Managing a global workforce in the Netherlands
The Netherlands is known for its employee-friendly regulations, strong social security system, and emphasis on work-life balance. Businesses must navigate these complexities, including adherence to the Dutch Civil Code and compliance with sectoral agreements. TopSource Worldwide offers invaluable assistance in this regard, providing expert EOR services tailored to the unique requirements of the Dutch labour market.
Extensive expertise
Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.
Entity-free employment
Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.
Payroll without hassle
Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success.
Always-on support
Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.
Global Employee Cost Calculator
Estimate the cost of your new hire with our calculator. Simply enter their location and salary information in to this handy tool to see what will be spent in employment costs each month.
TESTIMONIALS
Hear from our clients about our EOR solutions in the Netherlands
"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."
Annette van Duijnhoven
”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."
Praveen Lihinar
”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."
Supervisor
Personalised Employer of Record services in the Netherlands
TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in the Netherlands. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your Netherlands-based employees.
End-to-end Netherlands payroll services
Looking to expand into the Netherlands? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your Netherlands expansion initiatives.
Global entity management
Venturing into the Dutch market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.
Accounting
Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.
Global EOR services
Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.
Global Expansion Simplified
How to do business in the Netherlands
Entering the Dutch market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.
TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in the Netherlands.
Netherlands Insights
Key insights into the Netherlands' landscape
VAT rates: The Netherlands has a standard Value Added Tax (VAT) rate of 21%, as well as reduced rates of 9% and 0% for specific goods and services.
Ease of Doing Business rank: The Netherlands ranks 36th in the Ease of Doing Business Index, indicating a somewhat favourable business environment.
Consumer Confidence Index: The consumer confidence index of the Netherlands rose to 98.26 in September of 2023.
Employee maternity/paternity leave: Maternity leave is typically 16 weeks, and paternity leave is 5 days, with additional parental leave options.
Employee termination period: Standard notice for termination varies but is typically 1 to 4 months, depending on employment contract terms and duration.
Employee salary pay date: Wages are commonly paid monthly, with specific pay dates outlined in employment contracts and subject to labour laws.
Bank holidays: Public holidays in the Netherlands include New Year's Day, King's Day, Liberation Day, Ascension Day, Pentecost, Christmas, and other regional holidays.
An overview of employing in the Netherlands
Salary currency
Euros (€)
Bonus
There’s no specific requirement to include a bonus in the contract.
Employers must be registered with an ‘Arbodienst’ provider, a company which helps re-integrate employees who are sick back into the workplace. They also seek to support employers to reduce illness-related absence, minimise work-related risks and ensure a healthy and motivated workforce.
TopSource Worldwide is affiliated with ArboNed for such services.
The Dutch social security system consists of national insurance, employee insurance and medical insurance.
The national insurance scheme comprises of state pension (AOW), surviving dependents (ANW) and exceptional medical expenses (AWBZ).
National insurance contributions and salaries tax are withheld by the employer from an employee’s salary and then paid to the Dutch Tax and Customs Administration.
Employees are to take out their own private health insurance as per the Health Insurance Act (Zorgverzekeringswet). The insured individual pays a premium to the insurance company which is determined by the insurer. The Health Insurance Act (ZVW) provides an income-related contribution to be paid by the insured person: the higher the salary, the higher the contribution.
Individuals can choose to take out supplementary insurance to cover anything not included in their health scheme. There’s a mandatory excess of €385 (correct for 2021) to be paid for claiming on the scheme despite having to pay a standard premium.
Employers costs in the Netherlands
The Dutch social security system consists of national insurance, employee insurance and medical insurance.
The national insurance scheme comprises of state pension (AOW), surviving dependents (ANW) and exceptional medical expenses (AWBZ).
National insurance contributions and salaries tax are withheld by the employer from an employee’s salary and then paid to the Dutch Tax and Customs Administration.
Employees are to take out their own private health insurance as per the Health Insurance Act (Zorgverzekeringswet). The insured individual pays a premium to the insurance company which is determined by the insurer. The Health Insurance Act (ZVW) provides an income-related contribution to be paid by the insured person: the higher the salary, the higher the contribution.
Individuals can choose to take out supplementary insurance to cover anything not included in their health scheme. There’s a mandatory excess of €385 (correct for 2021) to be paid for claiming on the scheme despite having to pay a standard premium.
An overview of the main statutory benefits
The maximum probationary period under Dutch law is two months for indefinite contracts or contracts of at least two years, otherwise only one month’s probation is allowed. Contracts shorter than six months don’t allow for a probation period.
It’s possible to terminate the employee’s contract during the probationary period with immediate effect should they not be meeting the required standards of performance; however, protocols must be observed — TopSource Worldwide can advise clients on this.
There’s no specific action required to inform employees they have passed the probationary period.
- A vacation allowance equal to 8% of the gross salary earned from 1 June to 31 May is paid in June each year.
- Vacation allowance accrues each month and needs to be paid out when employees exit.
- The monthly salary cited in the employment contract does not include the 8% vacation allowance.
Full-time employment is usually 36–40 hours per week. The Working Hours Act (ATB) sets the maximum working hours per week to 60; however, an employee must not work the maximum number of hours every week.
• Per week during a four-week period: on average 55 hours per week
• Per week during a 16-week period: on average 48 hours per week
If an employee works for more than five and a half hours, they’re entitled to at least 30 minutes of break time. This may be split into two 15-minute breaks.
If an employee works for more than 10 hours, they must have at least 45 minutes of break time. This may be split into several breaks, each of which must be at least 15 minutes.
Dutch law does not provide a legislative regulation for overtime. Overtime hours can be accrued as compensation hours that can be added to leave entitlement. This should be agreed in the contract of employment.
TopSource Worldwide doesn’t have an occupational pension scheme in the Netherlands. We can facilitate voluntary employers’ contributions to be paid directly to the employee, who is responsible as to where the funds are invested.
Notice periods
Notice periods can vary depending on who wants to terminate the employment. If this is the employer, the notice period is always twice as long as when the employee is requesting the notice period. A longer notice period can be agreed upon in the contract.
Interim notice is required in the employment contract to terminate a fixed-term employment contract. This enables the employee to receive unemployment benefits from the time of dismissal.
Employees: the statutory notice period to be provided by an employee is one month. However, it’s possible to agree a shorter or longer notice period with the employee, in which case it must be explicitly stated in the contract of employment. If an employee’s notice period is more than one month, this will have the effect that the employer’s notice period will be at least twice as long. The maximum notice period for an employee is six months.
Employers: where an employee notice period has not been negotiated to be longer than the statutory of one month, the statutory employer notice depends on the length of contract, with a maximum of four months.
Length of service – Notice period
Up to five years – One month
Five to 10 years – Two months
10 to 15 years – Three months
15 years + – Four months
In the event that a fixed-term employment contract ends, the employer must notify the employee in writing one month prior to the end of the employment contract. If the employer fails to do so, the employment contract ends by operation of law, but the employer must pay a penalty of one month’s salary (or the equivalent for each day it’s late). This is formally different from the ‘notice period’.
Holiday & leave
Sick leave
By law, employees in the Netherlands are entitled to a minimum of 70% of their annual gross salary for up to two years of illness. The 70% payment must not be lower than the statutory minimum wage. Employers must define the terms of wage payment in the event of sickness in the employment contract and may choose to cover 100% of the employee’s salary for the first six months of sick leave.
After two years, if all reintegration efforts for the employee have been met through the services of an ‘Arbodienst’ provider (see statutory insurance), UWV will take over the payments. UWV (Uitvoeringsinstituut Werknemersverzekeringen) stands for Employee Insurance Agency, an independent administrative body which performs these services on behalf of the Ministry of Social Affairs and Employment. The employer can than request termination of the employment. Travelling and expense allowances may not be paid during a long period of sickness.
It’s mandatory for an employee to report any sickness to their employer; however, a sick note is not required.
Adoption and foster care leave (adoptieverlof)
An employee is entitled to six weeks of leave over a period of 26 weeks. This may be taken as consecutive weeks or spread out. During this time, an employee continues to accrue vacation days. An employer may not ask an employee to compensate this leave with holiday.
An employer may not refuse a reasonable request for emergency leave of absence. This can be a few hours and at most a few days. During the emergency leave, an employee is entitled to their normal wages.
Care leave (kortdurend zorgverlof/ langdurig zorgverlof)
Employees in the Netherlands are entitled to apply for short or long-term care leave provided that the care is necessary, and the employee is the only person able to provide this care. This is paid out at 70% of their annual salary. An employer may only refuse this leave if this causes serious problems for the company.
Employ and pay anywhere
Specialising in multi-country payroll solutions
TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.
Calculate Your Employer of Record Taxes in Seconds
Employment Cost Calculator in the Netherlands
Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.
In addition to calculating your EOR taxes, our calculator can also help you:
- Understand the different types of EOR taxes
- Stay up-to-date on the latest changes to EOR tax regulations
- Avoid penalties for non-compliance
Our author
Mark Robbins
Global Sales Director
Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013.
Published 2023-11-14 00:00:00
Updated 2023-11-15 00:00:00
Reviewed by:
Adrian Cooney
Fact checked by:
Adrian Cooney
Employer of Record FAQ
Frequently Asked Questions about Dutch employment solutions
What is an Employer of Record in the Netherlands?
An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in the Netherlands. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.
How do global employment services work?
Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.
What are the benefits of working with an Employer of Record in the Netherlands?
Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in the Netherlands. This allows companies to expand globally without the complexities of establishing legal entities in each location.
What is the difference between EOR & PEO?
An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.
How are employer payroll taxes calculated in the Netherlands?
Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in the Netherlands. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.
What global employment solutions does TopSource offer?
TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.