Employer of record in The Netherlands | Employment Law

Employment Law in the Netherlands

Contracts

Although written contracts are not strictly mandated under Dutch law, employers must provide a written or electronic statement of a worker’s core employment details, whether they are an indefinite or fixed-term worker. This statement must include:

• Names and addresses of employer and employee
• The type of contract (fixed-term or indefinite), and if fixed-term, the duration of the contract
• Start date
• Amount of paid leave
• Job title and description
• Wages or salary, plus when payments will be made
• Working hours
• Notice period
• Probationary period

Termination and notice periods

In the Netherlands, labor laws generally require a written notice for termination, with periods ranging from one to four months based on the employee’s length of service. In most cases, terminated employees are entitled to a warning and a fair hearing. Just cause for a dismissal includes theft, disorderly behavior, bribery, insubordination, habitual negligence of duty, lack of capability, and financial irregularities.

Employees are entitled to a statutory transition payment (transitievergoeding) upon termination, calculated based on their years of service and monthly salary. There is no statutory severance payment in the Netherlands; however, additional compensation may be provided based on employment contracts or collective agreements. As your employer of record (EOR) in the Netherlands, we can assist you in managing employee terminations by providing legal guidance and a personalized process to ensure compliance with Dutch labor laws and minimize legal risks.

Probation periods

Under Dutch law, probation periods are determined by the duration of the employment contract and must be agreed to in writing by both parties or they are considered null and void. During the probation period, Dutch employers and employees may terminate their employment relationship immediately without notice and without providing a specific cause. The probation period must be the same length for both employer and employee and cannot be renewed or extended. The maximum allowed length of probation periods in the Netherlands are as follows:

• Indefinite contracts - two months
• Fixed-term contracts without a specified end date - one month
• Fixed-term contracts with a duration of six months to two years - one month
• Fixed-term contracts of two years or more - two months

Fixed-term contracts of six months or less are not permitted to have probation periods under Dutch law. Also note that some collective bargaining agreements in the Netherlands may deviate from normal terms and durations.

Working hours and overtime

The standard working week in the Netherlands typically consists of 38 to 40 hours, spread across five days, with a legal maximum of 12 hours per day and 60 hours per week, provided that the average working time does not exceed 48 hours per week over a four-week period. Employees are entitled to a minimum of 11 consecutive hours of rest between working days and at least 36 consecutive hours of rest per week.

Any work beyond the standard working time is considered overtime. Dutch law does not specify a fixed annual limit on overtime hours; however, collective labor agreements often set specific limits and compensation rates. Overtime compensation is typically determined by collective agreements and may include higher pay rates or compensatory time off.

Taxes

In the Netherlands, withholding tax is known as Loonbelasting (wage tax) and is deducted by employers before paying salaries to employees. Employers must deduct wage tax from employee salaries based on applicable income tax rates and submit it to the Dutch Tax and Customs Administration (Belastingdienst).

Employer payroll contributions

The Netherlands’ social security system requires employer contributions that are dependent on the total number of employees, and these contributions cover pensions, medical care, disability insurance, and gratuity payments. In addition, workers’ compensation is financed by contributions from state governments, employers, and employees.