Your Guide to Hiring Employees and Contractors in Netherlands
Dutch (official language), Frisian (official language in Frisia)
Ease of doing business
13.46% to 25.72%
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.
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.
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.
- 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.
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
Duration of probation or trial period depends on the length of the employment contract. Probation periods cannot exceed two months.