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Netherlands PEO & Employer of Record Services

All Countries > Netherlands
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Capital

Amsterdam

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Official Language

Dutch

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Currency

Euro

Payroll Desktop

Payroll cycle

Monthly

Via offers complete Payroll, EOR and Contractor mangement services for the Netherlands
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Quick facts about the Netherlands

The Netherlands is known for its progressive policies. The country is the first to make working from home a legal right. A leader in IT and telecommunications, the Netherlands stands out as one of the most dynamic economies in the European Union. With the 17th largest economy in the world, the country is home to over 17 million people.

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An employer of record (EOR) in the Netherlands allows companies without a local entity to hire full-time workers in minutes. An EOR acts as the legal employer on paper and helps businesses manage payroll, statutory benefits, employment contracts, taxes, and other HR processes.

PEO vs. EOR in the Netherlands

Often, people say PEO when they actually mean an EOR service or an Umbrella company.

If your global expansion includes the Netherlands, you can either 1) set up an entity or subsidiary in-country to hire talented employees who live here and partner with a PEO service provider or 2) use a global employer-of-record service like Via that already has established entities in the country and understands the country’s complex tax and labor laws.

PEO in the Netherlands

PEO services in the Netherlands provide HR and global payroll services to companies that already have established entities in the country.

Partnering with a PEO means:

  • Setting up an entity, which can take months

  • Outsourcing HR

  • Hiring new employees in a short amount of time

PEO services do not take full responsibility for maintaining compliance with Dutch laws. Employers enter into a co-employment with the PEO, which comes with additional liability risks.

If you already have an entity or subsidiary and in the Netherlands, using a PEO service can be a good solution. However, if you don’t, seeking the services of an employer-of-record, like Via, is likely going to be a better option.

Employer of Record in the Netherlands

If your business is still growing or you’re just looking to test and see the costs associated with the Dutch labor market, an employer-of-record can help you streamline the HR, hiring, and compliance process.

EOR services like Via:

  • Manages all HR related tasks

  • Acts as its own entity to free parent companies from legal issues, including compliance with tax and labor laws

  • Hires, onboards, pays, and cares for new employees without you having to wait to open an entity. This means hiring Dutch employees in a matter of days, as opposed to months

EOR services also help your expansion in a number of ways:

  • Testing out areas for global expansion: Setting up an entity can be costly, especially if you end up shutting it down if the location doesn’t suit business. Using an EOR service helps you test out these new areas for expansion without you investing a significant amount of startup capital and valuable time.

  • Helping you onboard candidates in a new place: Hiring good global talent from a country like the United States can be tricky and means you need to be prepared to hire internationally. This can be hard to do compliantly, and if you only need to hire one candidate, expensive.

  • Scaling up quickly: Start-ups and tech units in major enterprises move quickly. If you have to wait months to set up an entity, you may lose business opportunities by being weighed down with the subsidiary process.

The Netherlands at a glance

  • Capital city: Amsterdam

  • Largest city by population: Amsterdam

  • Currency: Euro (EUR)

  • Population: 17.44 million

  • Languages: Dutch

  • NL GDP: 9.12.21 billion

  • Payroll frequency: Monthly

  • Federal Minimum wage: 1,756 (EUR) per month

PTO

Paid leave in the Netherlands

The Netherlands has 10 public holidays, which are usually counted as paid time off.

These holidays include:

  • New Year’s Day

  • Good Friday

  • Easter Sunday

  • Easter Monday

  • Kings Day

  • Ascension Day

  • Whit Sunday

  • Whit Monday

  • Christmas

  • Second day of Christmas

Full-time employees in the Netherlands are entitled to 20 days of paid annual leave per year. However, it is common practice for employers to offer 24-32 of vacation days annually. Some startups and tech companies offer unlimited PTO.

Any leave accrued from the previous year must be used by the following July. The employer must inform the employee that the accrued leave is about to expire.

Sick leave

Sick employees are entitled to at least 70% of their last earned salary for up to 1 year of illness, some employers choose to offer their employees more sick pay depending on the stipulations set forth in the employment agreement. If an illness lasts longer than 1 year, WULBZ becomes effective and makes payments to the employee.

The country’s generous sick leave legislation allows salary payments to continue for up to 2 years, at 70% of the employees last earned salary. Some employers choose to supplement the payment to make it 100% of the employees salary.

Maternity leave

New mothers are entitled to 16 weeks of paid maternity leave. Maternity leave in the Netherlands is split into 2 periods: pre- and postnatal leave. Prenatal leave must be taken for 4-6 weeks before the expected due date. Postnatal leave covers the 10-12 weeks immediately following childbirth.

Maternity leave is often paid by the Employee Insurance Agency. However, it is common for employers to pay the employees salary to them directly and be reimbursed for the mother’s leave by the Employee Insurance Agency.

Paternity leave

New fathers are entitled to 1 week of paid paternity leave following the child’s birth.

Employees are also entitled to 5 weeks of unpaid leave in the 6 months following birth. They can put in a claim for up to 70% of their salary during this period to the Employee Insurance Agency.

Parental leave

New parents are paid 50% of their salary for the first 9 weeks of leave. The government makes these payments. This leave must be taken within a year of the child’s birth.

Other leave

Depending on the collective agreement between employer and employee in the employment contract, employees may be allowed additional leave for:

  • Short-term care: employees are entitled to 2 days of paid leave at 70% of their regular salary

  • Adoption leave: Employers can apply to the Employee Insurance Agency on behalf of their employees, for up to 6 weeks

Maternity & paternity leave

Payroll taxes in the Netherlands

Payroll taxes for the Employee Insurance Agency (social security fund) are split between contributions from both the employees and employer.

Employer payroll contributions break down as:

  • 5.49%-7.05% for Invalidity insurance fund

  • 0.34%-5.34% for Unemployment fund

  • 6.75% for Healthcare Insurance Act

  • 0.21%-3.36% for Work resumption fund

  • 0.17%-2.72% for Sickness Benefits Act

  • 0.5% for Child care premium

The total employer contribution for social security breaks down to 13.46%-25.72% of an employee’s salary.

Employee payroll contributions break down as:

  • 17.9% for Old age pension

  • .1% for Orphans and widow/widower pension

  • 9.65% for Long term care

  • Up to 2.70% for General unemployment fund

For employee contributions, the total ranges between 27.65%-30.35%.

Key local labor laws in the Netherlands

  • 2015 Work and Security Act

  • Balanced Labour Market Act

  • Deregulation of Assessment of Independent Contractor Status Act

  • Artificial Construction Act

Employment contracts in the Netherlands for employers of record

Employment contracts in the Netherlands are required by law. Dutch labor laws heavily favor protecting employees, so having a strong employment contract will help the employer ensure they are not out of step with labor regulations. Make sure that the collective agreement/employment contract is gone over and agreed upon by both employer and employee.

The Netherlands already provides employees with a large amount of benefits through their social security system. However, adding supplemental benefits like private health insurance and reimbursements for tuition and travel can help companies attract top employees.

If you partner with Via, we provide your company bullet-proof employment contracts that comply with Dutch laws and protect your business’s IP, or intellectual property.

Probation periods

There is no probation period for new employees set forth by the Dutch government. However, the standard probation period in the Netherlands is two months, and should be agreed upon in the Employment contract.

Work weeks

The normal working week in the Netherlands is no longer than 45 hours, with the average work week being 40 hours per week with 9 hour days and a 1-hour break for meals. The work weeks in the Netherlands are Monday-Friday.

Overtime

If employees go over their 45 weekly working hours, they are entitled to compulsory overtime pay. There is no set overtime pay regulated by the Dutch government. However, employers must stipulate in the employment contract 1) how much overtime employees can work and 2) how much extra compensation they should receive.

Termination

Termination policies in the Netherlands vary based on the employment agreement and the type of contract that the employee and employer agreed upon. Employers are not allowed to terminate employees due to economic reasons or for long-term disability.

Notice period

In the Netherlands, the statutory minimum notice period is 1 month. In practice, the notice period depends on the employee’s length of service to the company.

Notice periods break down as:

  • Less than 5 years - 1 month notice

  • 5-10 years - 2 months' notice

  • 10-15 years - 3 months' notice

  • Over 15 years - 4 months' notice

Severance pay

In the Netherlands, severance pay is referred to as transition payment. Former employees are entitled to payment within their first day of termination.

Onboarding employees with a third-party employer of record or PEO

Hiring talented employees in the Netherlands can be challenging without using a global PEO or EOR service like Via.

Becoming your own employer-of-record in the Netherlands requires you to have a strong legal team and in-depth knowledge about employment laws as well as understanding employment contracts. To maintain compliance with benefits and payroll, you will need to hire a payroll outsourcing company or build your own HR team after establishing a subsidiary or entity.

For companies who hope to hire a large number of Dutch employees, opening a legal entity with an HR team makes sense. Most of the time, however, using a global third-party EOR service like Via is the smartest decision, as we offer support during your expansion every step of the way.

Netherlands PEO vs. Employer of Record (EOR) services

Opening a subsidiary in the Netherlands requires you to pay employees internally and have your own Human Resources team. Both of these steps will be time consuming and require a large amount of upfront resources to get started.

The process of opening an entity takes months, since you will need on-the-ground experts who can assist with opening a new bank account, finding an office, and registering with local government institutions. For this reason, companies looking to hire local Dutch talent quickly can streamline the process by partnering with an EOR service like Via who already has an established entity in the Netherlands.

Opening an entity and partnering with a PEO service

For companies that want to build a large team in the Netherlands and have the time to open their own entities, using a PEO service is one option.

PEO companies act as co-employers and manage the HR process. The co-employment model means the parent company is still held liable for compliance issues. The PEO service usually passes complex problems related to termination or immigration over to the parent company.

Partnering with an EOR service

When using an EOR service like Via, you do not need to open a bank account or take legal responsibility for complying with Dutch labor laws. Via takes care of that paperwork for you, and can guide you on the best practices for navigating local laws and paying employees in Euros, the country’s official currency.

EOR services help major corporations looking to scale up operations in the Netherlands as well as scaling startups, SMBs, and other entrepreneur-led businesses.

Why companies partner with Via as their Dutch Employer-of-record

Many companies want to hire within the Netherlands but do not have the in-depth knowledge of beginning the process compliantly. Via makes hiring Dutch talent and building your global team seamless. Via helps you manage local HR processes for direct employment such as work visas & permits, benefits, payroll, background checks, and more. Our team of local labor lawyers and on-the-ground experts ensure that your company remains compliant while expanding abroad. As your employer-of-record/entity in the Netherlands, Via assumes responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team.

With Via’s transparent pricing, you can pay full-time employees or contractors in the Netherlands with no hidden set-up fees, no foreign exchange or transaction fees, and no minimums–start with 1 employee and scale up at your own pace.

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More information for you
    Work Visa & Permits in the Netherlands
    Payroll in the Netherlands
    Hiring & Recruiting in the Netherlands
    Netherlands Employee Compensation & Benefits
    Set up your Subsidiary in the Netherlands

Frequently asked questions

  • What is an employer of record?

    An employer of record is a third-party service hired by a parent company that takes on the responsibility of onboarding employees, managing payroll, helping with visas, and handling taxes in another country for the parent company.

  • How do I find an employer in the Netherlands?

    There are quite a few options for finding an employer in the Netherlands. Many employers hire employees through a recruitment agency or via their internal HR/talent team. Companies can also find potential employers using job boards like LinkedIn and through networking.

  • What is a CLA in the Netherlands?

    A collective labor agreement (or CLA) is the agreement between employer and employee that stipulates the conditions of the employment and the employee’s compensation and benefits.

  • What is 13th-month salary in the Netherlands?

    13th-month salary is a bonus that many employers give their employees that equals 1 months salary. Although not mandated by the Dutch government, many employers give their employees this bonus as a supplemental benefit.

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