The Netherlands Employer of Record

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in the Netherlands, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in the Netherlands―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in the Netherlands and how our employer of record service, Global Employment Outsourcing (GEO), and local HR experts can help you manage your international employment needs.

Hiring in the Netherlands

Employment in the Netherlands is governed by the Dutch Civil Code as well as the Dutch Constitution and a number of specific employment laws.

Recent years have seen labor shortages as well as strikes. The government has tried to create a more dynamic labor market by limiting flexible contracts and promoting fixed-term contracts between employers and employees.

Since employment in the Netherlands is highly regulated, compliant employment contracts are an essential business need. As your employer of record and PEO in the Netherlands, we can ensure that every contract, for every worker, meets all requirements. We can also provide you with guidance about cultural norms and hiring best practices and keep you up-to-date with employment regulations as they change.

Employment contracts in the Netherlands

As you look to hire employees in the Netherlands, here are some common regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours
The maximum workday is 12 hours and the maximum workweek is 60. An employee’s workweek cannot average more than 55 hours over four weeks or more than 48 hours over 16 weeks. An employee is entitled to 36 consecutive hours of rest following a five-day workweek.

There are even more restrictions on working hours for work performed during the night shift, which is any hour of work between midnight and 6 a.m.

Employees are entitled to a 30-minute break after working five and a half hours and a 45-minute break after working more than 10 hours.

Employees must give their consent to work on Sundays and they are entitled to 13 free Sundays each year or more if there is a collective labor agreement in place.

Compensation
As you consider the appropriate salary to offer new employees, keep in mind:

Minimum wage as of May 2022 is €1,725 per month.
The government reevaluates the minimum wage every January and June.
Collective agreements may regulate the legal salary range.
There is no set overtime pay, but it can be established by the employment contract or collective agreements.

As your employer of record in the Netherlands, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses
Bonuses are not required but it is customary to give an extra month’s salary in November or December.

Probationary period
Although most collective agreements contain a probationary period, employers are not required to include it. Probationary periods generally last from one to two months. For fixed-term contracts, only those that are longer than six months may have a probationary period. Contracts can be terminated during this probationary period.

Termination and severance
In order to terminate someone for a reason other than gross misconduct or a judicial intervention, employers must get permission from the Public Employment Service.

When both parties consent to termination, there is a 14-day reconsideration period during which the employee can withdraw their consent. If that happens, either employment continues, or they try again to reach a settlement.

Employees are entitled to a “transition allowance” when an employer terminates an employment agreement of 24 months or longer. The transition payment is one-third of monthly wage per year of employment for the first 10 years, and half of the monthly wage per year worked thereafter. The allowance cannot exceed €75,000 unless the employee’s yearly salary exceeds this amount, in which case this higher amount counts as the maximum.

As your employer of record in the Netherlands, we can work with you to quickly handle the unforeseen event of an employee termination, providing legal guidance and a personalized process that ensures you stay out of labor court.

Employee benefits and paid leave in the Netherlands

When negotiating terms of an employment contract with a candidate in the Netherlands, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave
Pregnant employees are entitled to at least 16 weeks of leave that must begin between four and six weeks before the due date. It can continue for 10 weeks after the birth, although employees may return to work sooner as long as it has been at least 42 days since the birth.

Maternity pay is equal to 100% of the employee’s salary up to a limit set by national social security legislation. The government funds maternity leave, which is paid through the employer.

Nursing mothers can feed their baby or pump on the job site for up to nine months after the birth and can use up to 25% of their working time to do so with no loss in wages.

Vacation
Employees are entitled to four times the number of days that they regularly work each week to take as annual paid vacation e.g. 20 days for a five-day workweek. Collective bargaining agreements often provide up to 25 days. Unused leave can be carried over for six months. Employers must pay a holiday allowance equal to 8% of the employee’s gross annual salary each year.

Holidays
Dutch workers are not legally entitled to have holidays off or to be paid extra if they work on those days. Contracts or collective agreements determine an employer’s holiday policies.

There are two national holidays and seven other public holidays that are typically observed.

National holidays:

The King’s Birthday
Liberation Day (celebrated every five years in years ending in -0 and -5)

Public holidays:

New Year’s Day
Good Friday
Easter Monday
Ascension Day
Whit Monday
Christmas Day
Boxing Day

Sick leave
Employees with contracts are entitled to up to two years of paid sick leave at a minimum of 70% of their wages. An employee cannot be terminated while on sick leave unless the employer gets authorization from the UWV WERKbedrijf organization, or if a collective bargaining agreement allows for it.

Health coverage
The Netherlands’ universal social healthcare coverage is a mix of public and private insurance. All residents and nonresidents who pay income taxes there are required to buy private health insurance. Employees can change their insurer annually. The uninsured are fined unless they contribute to a health savings account, with the exception of undocumented immigrants, who are required to pay for medical care.

If employers provide health insurance for employees, it is a taxable benefit considered part of total compensation. Alternatively, employers may offer an allowance to help employees pay for their insurance. There can be penalties for employers and employees if anyone lacks coverage.

As your employer of record in the Netherlands, we may be able to provide optional supplementary medical insurance coverage for professionals and their dependents at a more cost-effective rate.

Pensions
In 2022, the legal retirement age in the Netherlands is 66 years and 7 months. In 2023, the retirement age will rise to 66 years and 10 months, and in 2024 and 2025, it will be 67 years. Starting in 2026, it will only be increased if life expectancy continues to rise.

Dutch residents who reach retirement age are eligible to receive a flat-rate pension benefit based on the net minimum wage and the person’s living situation. Employees and employers make contributions to the social insurance system.

Workers’ compensation
Employers contribute to the government’s workers’ compensation system.

Employees injured at work are entitled to paid sick leave of up to two years.

Employer social costs will cover a large portion of employee benefits in the Netherlands, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance, if needed.

Employee onboarding with an employer of record in the Netherlands

We write and validate all local employment contracts, streamlining the onboarding process for you and your employees in the Netherlands—all you have to do is provide relevant information and review and approve the employment agreement.

As your employer of record in the Netherlands, we will:

Schedule a welcome call to discuss HR and employment information for the Netherlands, as well as answer any questions
Prepare a customized employment contract in English and in Dutch (or other local language)
Share the employment contract and benefits information with the new employee for signature and review
Gather tax and banking information from the employee to set up payroll
Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll

The entire onboarding process for the employee is often completed in as little as two weeks.

Partner with Safeguard Global as your Netherlands employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on Global Employment Outsourcing (GEO) to expand and hire in over 179 countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in the Netherlands. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations—in more than 150 countries and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.

Learn more about Global Employment Outsourcing

Ready to employ in the Netherlands?