How Much Does It Cost to Hire in the Netherlands in 2025?
In 2025, hiring an employee in the Netherlands costs around 30–40% more than the gross salary. Employers must cover social security contributions (≈15–20%), pension (10–20%), and an 8% holiday allowance. Sick pay obligations can also last up to two years.
What Makes the Netherlands an Attractive Hiring Market?
The Netherlands offers a stable business climate, clear employment laws, and a flexible labor market. While compliance standards are strict, the system is transparent, making it one of Europe’s most efficient hiring environments for North American companies expanding to Europe.
How Much Does It Cost to Hire an Employee in the Netherlands in 2025?
The total employer cost is 30–40% above the employee’s gross salary.
This includes mandatory contributions and benefits such as:
- Social security contributions: 15–20%
- Pension contributions: 10–20%
- Holiday allowance: 8%
- Sick pay obligations: up to 2 years
Tip: The exact percentage depends on the type of contract, employee age, and sector collective agreement (CBA).
- Related reading: Costs of Hiring Employees in Europe - explore average labor costs and contributions across multiple EU countries.
What Are Employer Social Contributions in the Netherlands?
Employer social contributions cover several insurance and welfare costs.
Contribution Breakdown
Employer Social Contribution |
% applied salary |
Notes |
Health Insurance |
2.64% - 7.64% |
Applied for up to €71.600 annual gross |
Disability & accident insurance |
Approx. 1.4% on average |
Varies by industry |
Health Insurance |
6.6% |
Applied for up to €71.600 annual gross |
Other contributions |
1% |
|
Total |
Approx. 15-20% |
of gross base |
Table 1. Breakdown of employer social contributions in the Netherlands, including health insurance, disability, and accident premiums (2025 data).
What Additional Employer Costs Should You Expect?
Cost type | Employer Obligation | Details |
Holiday allowance | 8% of gross annual salary | Paid annually in May/June or monthly |
Pension contributions | 10–20% of gross salary | Based on CBA and company policy |
Sick pay | 70–100% of salary for up to 2 years* | Among the highest in Europe |
Paid time off | Minimum 20 days | Often 25–30 days are offered |
Table 2. Overview of mandatory additional employer costs in the Netherlands, such as holiday allowance, pension contributions, and sick pay obligations.
*Many CBAs require 100% in the first year, making Dutch sick pay obligations higher than those in most EU countries.
Example of Employment Cost Calculation
Calculation Example
Employment Costs |
Example 1 |
Example 2 |
Gross Annual Salary |
€ 60.000 |
€ 90.000 |
Gross Monthly Salary |
€ 5.000 |
€ 7.500 |
Employer Social Contribution (in %) |
Approx 35% |
Approx 35% |
Employer Social Contribution (in £) |
€ 1.750 |
€2.413 |
(Sub)Total Monthly Employer’s Cost |
€ 6.750 |
€ 9.913 |
(Sub)Total Annual Employer’s Cost |
€ 81.000 |
€ 118.956 |
Table 3. Example calculation of total employment cost for Dutch employees earning €5,000 and €7,500 gross monthly salary, including 35% employer contributions.
- Tip: Use our HR Outsourcing in the EU: Streamlining Human Resources guide to estimate total employment expenses when expanding into multiple European markets.
How Does the Netherlands Compare to Other European Countries?
Country | Employer Cost % | Holiday Pay | Sick Pay Duration |
Netherlands | 30–40% | 8% allowance | Up to 2 years |
Germany | 30–35% | 13th salary common | 6 weeks |
France | 45–50% | 13th salary common | 3–6 months |
Belgium | 35–45% | 13th salary | 1 month |
Table 4. Comparison of employer cost percentages, holiday pay, and sick pay duration in the Netherlands, Germany, France, and Belgium (2025 overview).
- For country-by-country breakdowns, visit ourEuropean Employment Insights & Trends.
What Employment Benefits Are Mandatory for Dutch Employees?
Benefit | Description | Typical Range / Comparison |
Holiday Allowance |
Mandatory additional payment of 8% of annual salary |
Commonly paid in May/June; in other EU countries often replaced by a “13th-month” bonus |
Sick Leave Protection | Employees receive up to 2 years of paid sick leave, at least 70% of salary (often 100% in year one) | Among the most generous systems in Europe |
Paid Time Off (PTO) | Minimum 20 statutory days, usually 25–30 depending on CBA | Higher than the U.S. average (10–15 days) |
Table 5. Summary of mandatory employment benefits in the Netherlands, including holiday allowance, sick leave protection, and paid time off (PTO).
- Resource:Europe Paid Vacation Days - compare PTO policies by country.
Why Choose an Employer of Record (EOR) Partner in the Netherlands?
Working with an Employer of Record (EOR) partner such as EuroDev lets your company hire Dutch employees without establishing a local entity, while staying fully compliant with tax and labor laws.
We handle payroll, benefits, and employment contracts so you can focus on growing your European operations.
- Curious how EOR compares to PEO? Read: PEO vs EOR: Choosing the Right HR Solution for Global Expansion
Final Thoughts
Hiring in the Netherlands offers strong labor protections and moderate payroll costs compared to other EU countries. However, complex obligations — such as long sick pay and pension rules — require expert HR support.
EuroDev helps North American businesses expand to Europe with fully compliant HR and payroll outsourcing solutions.
Contact our HR experts to calculate your real cost of employment in the Netherlands.
Written by Sven Brands, HR Outsourcing International Account Manager at EuroDev.
FAQ's
-
Approximately 30–40% on top of gross salary.
-
Yes, all employees receive 8% of their annual salary as holiday allowance.
-
Up to 2 years, at least 70% of salary (often 100% in year one).
-
Yes - through an Employer of Record (EOR) partner such as EuroDev.
-
At least 20 days per year; most companies offer 25-30.
Category
Related articles
-
The hidden pitfalls of salary Benchmarking in Europe
Last updated: 8 August 2025Discover the pitfalls of salary benchmarking in Europe and their impact on companies hiring...
Read more -
Cost of Hiring an Employee in France: A Comprehensive Guide
Last updated: 17 July 2025Discover the true cost of hiring an employee in France, including payroll taxes, mandatory...
Read more -
Cost of Hiring an Employee in the UK: A Comprehensive Guide
Last updated: 28 May 2025In the United Kingdom, an employer has to take into consideration additional factors than just the...
Read more