Can you hire employees in the Netherlands without a legal entity?

Yes. Foreign companies can hire employees in the Netherlands without establishing a Dutch legal entity by using an Employer of Record (EOR). The EOR becomes the legal employer in the Netherlands, while your company manages the employee’s daily work and responsibilities.

How long does it take to hire employees in the Netherlands?

Hiring through an Employer of Record is substantially faster than setting up a Dutch entity. In many cases, employees can be onboarded within several weeks depending on documentation, immigration requirements, and contract complexity.

What employment contracts are required in the Netherlands?

Dutch employment contracts are commonly structured as either indefinite or fixed-term agreements. Contracts should clearly define salary, working hours, notice periods, probation terms, holiday entitlement, and any applicable collective labor agreement (CAO) conditions.

Can a PEO help hire contractors in the Netherlands?

Yes, but the Netherlands has strict worker classification rules. If contractors operate under conditions similar to employees, companies may face misclassification risk. Many international businesses choose an EOR employment structure to reduce compliance exposure.

How does payroll work in the Netherlands?

Payroll in the Netherlands is usually processed monthly and includes wage tax withholding, employee insurance contributions, holiday allowance calculations, pension obligations where applicable, and statutory employer reporting.

How often are employees paid in the Netherlands?

Employees in the Netherlands are generally paid monthly. Some sectors or employment agreements may also include additional compensation structures such as 13th-month payments or annual bonuses.

Does a PEO manage taxes and social contributions in the Netherlands?

Yes. A PEO or Employer of Record manages payroll tax calculations, wage tax withholding, employee insurance contributions, employer social charges, filings, and payments to Dutch authorities.

Can payroll be run in local currency?

Yes. Payroll in the Netherlands is processed in euros (EUR). Employees are paid locally in EUR, while invoicing arrangements with the client company may vary.

Is using an Employer of Record legal in the Netherlands?

Yes. Employer of Record services are legal in the Netherlands when structured in accordance with Dutch labor law, payroll tax regulations, and employment compliance obligations.

What labor laws apply to foreign companies hiring in the Netherlands?

Dutch labor law applies to all employees working in the Netherlands regardless of whether the employer is foreign or locally incorporated. This includes regulations covering working hours, dismissal procedures, leave entitlements, payroll obligations, and employment protections.

What are the risks of employee misclassification in the Netherlands?

Misclassification can lead to back taxes, retroactive social contributions, penalties, and employment claims. Dutch authorities closely monitor contractor arrangements, particularly where there is a relationship of supervision or long-term exclusivity.

How does a PEO or EOR ensure compliance in the Netherlands?

A PEO or EOR supports compliance by: Preparing compliant Dutch employment contracts Managing payroll and statutory filings Administering holiday allowance and leave entitlements Monitoring labor law and CAO requirements Supporting compliant termination procedures Managing payroll documentation and reporting obligations

Are employees entitled to holiday allowance in the Netherlands?

Yes. Employees in the Netherlands are legally entitled to holiday allowance equal to at least 8% of gross annual salary. This payment is commonly made annually in May, although some employers distribute it monthly.

What are collective labor agreements (CAOs) in the Netherlands?

Collective labor agreements (CAOs) are sector or company-level agreements negotiated between employer organizations and trade unions. CAOs may establish mandatory rules regarding salary scales, overtime, leave, pensions, notice periods, and other employment conditions.

PEO & EOR services · Netherlands

Hire employees in the Netherlands with an Employer of Record

Hiring in the Netherlands through an EOR does not require setting up a local legal entity. EuroDev becomes the legal employer running payroll and compliance while you keep full operational control.

✓ No entity required

✓ Onboard in weeks

✓ Full compliance managed

Talk to our EOR experts today →

NETHERLANDS · EMPLOYER COST SNAPSHOT

Avg. annual gross salary €40,000

Employer contributions ~20%–30%

Statutory annual leave 20 days

Standard work week 36–40 hrs

Source: EuroDev EOR payroll data for the Netherlands.

PEO & EOR services · Netherlands

How hiring in the Netherlands through EuroDev works

An Employer of Record lets your company hire in the Netherlands

without establishing a Dutch subsidiary or branch. EuroDev becomes the legal employer, while your company retains day-to-day operational direction.

Employee selection

You select the candidate you want to hire in the Netherlands.

Contract setup

EuroDev drafts a locally compliant contract, aligned with labour law and applicable collective labour agreements (CAOs).

Payroll & tax

We run monthly payroll and report income tax and social security accurately.

Ongoing compliance

Employment administration, benefits, and paid leave managed continuously.

The decision

Direct expansion vs. partner-led market entry

Both paths are legitimate - the right one depends on how fast you need to move and how permanent your presence in the Netherlands will be.

Most chosen

Employer of Record

When an EOR is the right choice

✓ You want to hire quickly without long setup times

✓ You are testing the Dutch market

✓ You plan to hire a small or distributed team

✓ You want to minimize legal and compliance risk

Local Entity

When a local entity makes sense

✓ You are building a large, long-term workforce in the Netherlands

✓ You require a permanent commercial presence

✓ You want full internal control over payroll and HR

Employment contracts

Permanent and fixed-term contract rules

The Netherlands assumes employment is indefinite by default - incorrectly structured temporary contracts can be automatically reclassified as permanent.

Contract type · default

Permanent (indefinite)

✓ No predefined end date

✓ Full statutory rights from day one

✓ Strong protection against unfair dismissal

✓ Employees may be entitled to transition compensation upon dismissal

✓ Probation permitted within legal limits

Contract type · limited use

Fixed-term (temporary)

✓ Strictly regulated under the Dutch “chain rule”

✓ Max. three consecutive fixed-term contracts

✓ Max. duration: duration: 36 months

✓ Converts to indefinite beyond the limit

✓ A fourth contract, or continued employment after 36 months, becomes permanent by law

Termination, notice & severance

The Netherlands has strong employee protection laws

Employment “at will” does not apply when hiring through an EOR in the Netherlands. EuroDev guides you through termination procedures to ensure compliance.

1–4 months

Statutory notice depending on service

1/3 monthly salary

Severance per year of service

No statutory maximum cap

Severance cap

Probation

Probation periods

Must be agreed in writing. No probation applies to contracts of six months or less; up to one month applies to fixed-term contracts under two years and up to two months to indefinite or longer fixed-term contracts. Either party may terminate immediately during a lawful probation.

In practice

Notice & severance in practice

Notice ranges from one to four months depending on length of service, and payment in lieu is permitted. Dismissal generally requires UWV or court approval. Severance accrues from day one at 1/3 of monthly salary per year of service, with no statutory maximum cap.

Payroll & employer costs

What hiring through an EOR costs in the Netherlands

Employer costs typically run around 30% on top of gross salary - covering all mandatory employer charges and statutory contributions.

Cost example

Estimated annual employment cost

Average annual gross salary €40,000

Employer contributions (≈30%) €8,488.37

Estimated total employment cost ≈ €52,000

Contribution breakdown

Mandatory employer contributions

Unemployment insurance (AWf)

2.74%–7.74%

Disability / incapacity insurance

6.28%–7.64%

Return-to-Work Fund

≈0.38%–6.08%

Childcare levy

0.50%

Healthcare Insurance Act

≈6.10%

Total estimated

~20% of gross salary

Registration

Social security registrations

✓ Registration with the local tax authorities

✓ Monthly payroll and social security reporting

✓ Withholding employee wage tax and social insurance contributions

✓ Paying all employer social security and healthcare contributions

Working time

Working hours & overtime

✓ Standard schedule: 36–40 hours/week

✓ Legal working limit: 12 hours/day and 60 hours/week, averaging 48 hours/week over a 16-week period

✓ Overtime rules and compensation are determined by the employment contract or applicable CAO

✓ Compensated financially or with equivalent time off

Paid leave & public holidays

Statutory leave entitlements in the Netherlands

EuroDev ensures every leave entitlement is tracked and administered correctly, from vacation days to parental leave.

Vacation

Annual leave

20 days

✓ 20 statutory paid vacation days annually

✓ Statutory minimum of four times the employee’s weekly working hours per year

Statutory

Public holidays

11 days

✓ Up to 11 public holidays per year

Parental leave

Maternity leave

16 weeks

✓ 4–6 weeks before the expected due date

✓ 6 mandatory weeks immediately following childbirth

✓ Paid at 100% of the employee’s daily wage, up to the statutory maximum by UWV.

✓ Employer top-up not always mandatory

Parental leave

Paternity leave

1+5 weeks

✓ First week paid at 100% salary by the employer

✓ Up to 5 additional weeks

✓ Additional leave paid at 70% of the employee’s daily wage, paid by UWV taken within 6 monts after birth

Ready when you are

Hire employees in the Netherlands with confidence

Local expertise · Global support

EuroDev helps international companies hire in the Netherlands quickly, compliantly, and without unnecessary risk whether you're onboarding your first employee or expanding an existing team.

Talk to our EOR experts → Explore EOR services

What happens after you contact us? +

1 Share your hiring needs and expected timeline.

2 Receive a compliant employment setup plan.

3 Start contract preparation and employee onboarding.

FAQ's

: Yes. Foreign companies can hire employees in the Netherlands without establishing a Dutch legal entity by using an Employer of Record (EOR). The EOR becomes the legal employer in the Netherlands, while your company manages the employee’s daily work and responsibilities.
: Hiring through an Employer of Record is substantially faster than setting up a Dutch entity. In many cases, employees can be onboarded within several weeks depending on documentation, immigration requirements, and contract complexity.
: Dutch employment contracts are commonly structured as either indefinite or fixed-term agreements. Contracts should clearly define salary, working hours, notice periods, probation terms, holiday entitlement, and any applicable collective labor agreement (CAO) conditions.
: Yes, but the Netherlands has strict worker classification rules. If contractors operate under conditions similar to employees, companies may face misclassification risk. Many international businesses choose an EOR employment structure to reduce compliance exposure.
: Payroll in the Netherlands is usually processed monthly and includes wage tax withholding, employee insurance contributions, holiday allowance calculations, pension obligations where applicable, and statutory employer reporting.
: Employees in the Netherlands are generally paid monthly. Some sectors or employment agreements may also include additional compensation structures such as 13th-month payments or annual bonuses.
: Yes. A PEO or Employer of Record manages payroll tax calculations, wage tax withholding, employee insurance contributions, employer social charges, filings, and payments to Dutch authorities.
: Yes. Payroll in the Netherlands is processed in euros (EUR). Employees are paid locally in EUR, while invoicing arrangements with the client company may vary.
: Yes. Employer of Record services are legal in the Netherlands when structured in accordance with Dutch labor law, payroll tax regulations, and employment compliance obligations.
: Dutch labor law applies to all employees working in the Netherlands regardless of whether the employer is foreign or locally incorporated. This includes regulations covering working hours, dismissal procedures, leave entitlements, payroll obligations, and employment protections.
: Misclassification can lead to back taxes, retroactive social contributions, penalties, and employment claims. Dutch authorities closely monitor contractor arrangements, particularly where there is a relationship of supervision or long-term exclusivity.
: A PEO or EOR supports compliance by:

Preparing compliant Dutch employment contracts

Managing payroll and statutory filings

Administering holiday allowance and leave entitlements

Monitoring labor law and CAO requirements

Supporting compliant termination procedures

Managing payroll documentation and reporting obligations
: Yes. Employees in the Netherlands are legally entitled to holiday allowance equal to at least 8% of gross annual salary. This payment is commonly made annually in May, although some employers distribute it monthly.
: Collective labor agreements (CAOs) are sector or company-level agreements negotiated between employer organizations and trade unions. CAOs may establish mandatory rules regarding salary scales, overtime, leave, pensions, notice periods, and other employment conditions.