Looking for a PEO and EOR provider in the Netherlands? You've knocked on the right door! Our European PEO and EOR solutions help companies hire employees in the Netherlands without establishing a legal entity. Hiring and employment in the Netherlands can be complex as a foreign employer. We're here to guide you. EuroDev is the leading provider of EOR & PEO solutions in Europe. We partner with North American businesses who want to expand their business into Europe, and thus the Netherlands. The Netherlands is a popular destination for many North American businesses. What should be taken into account when employing or hiring in The Netherlands?
How it works - PEO and EOR in the Netherlands
An Employer of Record (EOR) or Professional Employer Organization (PEO) is a company or organization that is legally responsible for paying employees, including dealing with employee taxes, benefits & insurances. As the EOR/PEO of your European or Dutch employees, we provide you with tailored payroll, HR and compliance services. Through this construction, we decrease all the complications such as compliance issues, setting up a foreign establishment and setting up employment contracts in a different language.
Employment Contracts the Netherlands
An employment contract (arbeidscontract) is an agreement between an employee and an employer, containing working arrangements. In the employment contract, you indicate whether a Collective Labour Agreement (CAO) applies. There are two types of employment contracts:
- A fixed term contract (a temporary contract)
- Contract for an indefinite period (a permanent contract)
Permanent contracts are the most common employment contracts in the Netherlands as the employer likes to give the employee a certain feeling of trust and security. You cannot continually extend temporary contracts. An employee must receive a permanent contract after 3 consecutive temporary contracts, or after temporary contracts over a period of 3 years. This applies unless other arrangements have been made in the CAO. Since 2019, there has been a huge increase in giving employees a permanent contract.
Employment Termination the Netherlands - Notice Period the Netherlands
The Netherlands has no legal concept of “at-will” employment like in the US, and generally has fairly strict legal requirements and procedures that employers must fulfill before successfully terminating employees. If you want to dismiss staff or your employee wants to resign, a period of notice should be given in both situations.
The length of the notice period for an employer depends on the duration of the employment contract:
| Tenure | Notice Period |
| Less than 5 years | 1 month |
| Between 5 and 10 years | 2 months |
| Between 10 and 15 years | 3 months |
| 15 years or longer | 4 month |
Social Security Tax the Netherlands
Workers within the Netherlands are required by law to pay social security contributions on their gross salary and all earnings in the Netherlands. The social security employer tax rate in the Netherlands in 2021 is on average 23.59%.
Employer contributions are capped at an annual salary level of EUR 58,311. The following rates (2021) have to be applied against the gross salary, with the ceilings indicated.
| Type of Insurance | Paid by employer | Capped at | Maximum Employer Contribution |
|---|---|---|---|
|
Occupational disability (WIA) |
7.03% |
€ 58,311 | € 4,099.26 |
|
WIA Surcharge |
0.5% |
€ 58,311 | € 391.56 |
|
Return to work fund (Whk) |
1.36% |
€ 58,311 |
€ 793
|
| Unemployment (WW) |
2.70% (Indefinite term) 7.70% (Temporary) |
€ 58,311 | € 4,489.95 |
| Health Insurance Act (ZVW) | 7.0% | € 58,311 | € 4,081.77 |
| Total | 23.59% | € 58,311 | € 13,755.55 |
Average Salary the Netherlands & Average Employer Costs the Netherlands
In 2022, the average annual wage in the Netherlands was $44.958,48. This is lower than the average annual wage in the United States: $53.490,00. As an employer, the actual employer costs are at least 23,59% higher than the gross annual salary. Based on a $44.958,48 annual salary, the employment costs would be $55.298,93.
Apart from the average annual wage and the social security tax for employers, an employer in the Netherlands also has to take into account the employment cost that come with the monthly holiday allowance of 8% and the €0.19 cent per kilometer travel reimbursement.
To learn more about the average salaries in Europe and the actual employment costs in Europe, we invite you to read this article on Costs of hiring European employees.
Working Hours the Netherlands
A standard Dutch working week is 38 hours. The majority of fulltime jobs in the Netherlands are between 36-40 hours a week, or seven to eight hours a day, five days a week.
Paid Vacation Leave the Netherlands
If an employee works full-time (i.e. 5 full days a week), then the legal minimum number of days paid leave that the employee is entitled to, is 20, equivalent to 4 weeks of paid annual leave. However, it is common practice for employers in the Netherlands to offer 25 days of paid leave, on top of 10 public holidays in the Netherlands. To learn more about the average paid vacation days in Europe and how the Netherlands compares to the rest of Europe, we invite you to read our blog on paid vacation days Europe.
Public Holidays the Netherlands
In the Netherlands, there are 10 or 11 public holidays (once in every 5 years):
- New Year's Day - 1 January
- Good Friday - 7 April
- Easter Sunday - 9 April
- Easter Monday - 10 April
- King's Day - 27 April
- Liberation day (once in every 5 years) - 5 May
- Ascension Day - 18 May
- Whit Sunday - 28 Jun
- Whit Monday - 29 Jun
- Christmas Day - 25 December
- 2nd Day of Christmas - 26 December
Add 2023 Netherlands Public Holidays to your calendar
Maternity and Paternity Leave the Netherlands
Maternity leave in the Netherlands: Pregnant mothers are entitled to a total of 16 weeks of leave. 6 weeks of pregnancy leave (before the due date) and at least 10 weeks maternity leave (after childbirth). If for instance the baby is born before the pregnancy leave, the total of 16 weeks starts from the day after the birth. Employers can apply for 100% maternity allowance for their employee.
Paternity leave in the Netherlands: If the partner of an employee gives birth, the employee has a right to take 1 week of paternity leave. This paid leave can be taken any time in the first 4 weeks after the birth. During this 1 week of leave the employer must pay 100% of the salary. Partners have the opportunity to extend the partner leave to 5 weeks in the first 6 months after the birth. Employees who take the opportunity to extend the leave can claim benefits for up to 70% of their salary from the Employment Insurance Agency (UWV).
Learn more about PEO and EOR in Europe:
