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Your Guide to Hiring Employees and Contractors in Netherlands

Capital city

Amsterdam

Currency

Euro

Language(s)

Dutch (official language), Frisian (official language in Frisia)

Ease of doing business

Very easy

Payroll frequency

Monthly

Employer taxes

13.46% to 25.72%

Payroll

Payroll Cycle

The payroll frequency is generally monthly.  Work is typically paid on the last day of the month.

Minimum Wage Requirements

Minimum monthly wage is € 1.725 (+ 8% or 138 EUR a month in holiday allowance) per month for any employee over the age of 21.

Individual Income Tax

17.90% – Old Age Pension (AOW) over € 35.472 (included in income taxes)

9.65% – Long Term Care (WLZ) over € 35.472 (included in income taxes)

0.10% – Orphans and widow/widower pension (ANW) over € 35.472 (included in income taxes)

37.07% – Income tax for up to 69,398 Euro

49.50% – Income tax for over 69,398 Euro

49.50% – Income tax for employees without or awaiting BSN number (anoniementarief) – tax credits not applied until receiving BSN number and retroactively applied to start date upon receiving BSN number

up to 2888 EUR credit – Employees are entitled to a “general tax credit” (heffingskorting) of -6.007% per euro extra gained between 21,317 EUR stopping and 69,398 EUR annually. This is to be deducted from the income taxes.

up to 4260 EUR credit – Employees are entitled to a “labor tax credit” (arbeidskorting), this is to be deducted from the income taxes.

Employer Cost

5.49% – AOF laag (Disability insurance contribution) on a maximum of €59,706 EUR of taxable base

6.75% – Heffings ZVW premie (Dutch health insurance contributions) on a maximum of €59,706 EUR of taxable base

1,11% – Premie Whk gediff (Differentiated Premium Work Resumption Fund) on a maximum of €59,706 EUR of taxable base

0.50% – Uniforme opslag kinderopvang (Uniform Childcare Allowance) on a maximum of €59,706 EUR of taxable base

2.70 to 7.70% – AWF hoog (depending on contract) on a maximum of €59,706 EUR of taxable base

The AWf premium has a low of 2.70% in 2022 a high of 7.70% in 2022. 

The premium an employer must pay for the employee depends on the type of employment contract (and note that these premiums are updated each year). 

You pay the low premium if the contract is in writing, set for an indefinite period, and not an on-call contract.

Working Hours

Work Week

Monday to Friday.

Overtime Pay & Maximum Hours

If work time limits are passed, overtime compensation is compulsory. 

The maximum number of overtime hours is per the employee’s collective agreement/employment contract.

Employment Termination

  • Employer in general has five options to terminate employment agreement:
  • Termination by mutual consent through a settlement agreement;
  • Termination proceedings before the Employment Insurance Agency (UWV);
  • Termination proceedings before sub-district courts;
  • Termination with consent of the employee;
  • Urgent dismissal of the employee, for example in case of theft or any other serious misconduct.

Notice period

The statutory minimum notice period for termination in The Netherlands is one month however it is dependent on the employee’s length of service as below:

less than 5 years – 1 month notice
Between 5 & 10 years – 2 months’ notice
Between 10 & 15 years – 3 months’ notice
More than 15 years – 4 months’ notice

Probation periods

Duration of probation or trial period depends on the length of the employment contract. Probation periods cannot exceed two months.

These details are subject to change by the respective government and regulatory authorities in each country.

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