The Netherlands
Found someone in The Netherlands you’d like to hire? You’re in the right place. In the next few minutes, you’ll learn how to hire remote talent in The Netherlands, without wading into thousands of dollars of legal fees and months of legal red tape.
Country snapshot
CURRENCY
Euro (EUR)
EMPLOYER TAXES
27.65%
PAYROLL FREQUENCY
Monthly
OFFICIAL LANGUAGE
Dutch
It’s the fastest way to hire globally
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It’s a lot cheaper
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
It’s more flexible for you & your team
Can be less risky than hiring employees
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
Some people want to be employees
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
You might not have as much control over your talent
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
So you want to hire in The Netherlands. That’s great. But you should know that hiring in The Netherlands is different from hiring in your home country. There’s a whole laundry list of labor laws to catch up on, lawyers to contract, compliance issues to navigate… And it can get complex. So we’ll break it down in simple terms.
Hire talent as contractors
Hire talent as employees
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in The Netherlands than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in The Netherlands.
Employer tax
Employer Contributions
- 27.65%
Paid Time Off (PTO)
PTO is calculated by the length of employment:
Full-time employees (40 hours per week) in the Netherlands are legally entitled to a minimum of 20 days (four weeks) of paid holiday leave per year. This is based on a calculation of four times the number of hours worked per week. Many companies offer more than the minimum number of days, with 24 and even 32 days of annual leave being fairly common.
Employers are obligated to provide a holiday bonus of at least 8% of the employee’s gross salary. The bonus is usually paid in May or June.
Public Holidays
The Netherlands have 8 official public holidays.
Sick Days
Sick leave pay varies based on the length of service:
The minimum sick leave entitlement in the Netherlands is a payment of 70% of their most recent wage level, up to a maximum period of two years. This is a generous benefit and does reflect the Netherlands’ social policy. Some employers will even pay 100% of the wages.
Maternity Leave
Expecting mothers are entitled to 4-6 weeks leave before birth, and 10 weeks of leave after birth.
If an employee takes less than 6 weeks of pregnancy leave before the birth, she is entitled to add the remaining amount (up to 2 weeks) to her maternity leave after the birth.
If the baby is born later than the due date, the employee’s maternity leave begins after the actual birth and the total may, therefore, be longer than 16 weeks.
Employers can apply for a maternity allowance on behalf of their employees to the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).
Paternity Leave
If the partner of an employee gives birth, the employee has a right to 1 week of paternity leave following the birth. Paternity leave is the number of working hours in one week.
This paid leave can be taken any time in the first 4 weeks after the birth of the child. During this period of leave, the employer must continue to pay 100% of the employee’s salary.
As of 1 July 2020, employees will also be entitled to 5 weeks of unpaid leave in the first 6 months after birth.
Employees who take unpaid leave will be able to claim benefits from the Employment Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) for up to 70% of their salary.
Parental Leave
Parents of children up to the age of eight are entitled to parental leave in order to be able to spend more time with their children.
Parental leave is generally unpaid; however, some employers may partially cover some of the salary. Each parent may take off 26 times their weekly working hours.
Other Leave
Adoption leave: 6 weeks: Employers can apply for an adoption leave allowance on behalf of their employee to the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).
Emergency leave and other short absence leave: intended for unforeseen personal circumstances for which an employee has to take time off immediately, for instance, when making arrangements for the care of a sick family member or in the event of a death in the family.
You must always grant a reasonable request for emergency leave. During this period of leave, the employee is required to continue paying the employee’s salary.
Short-term care leave: Maximum of 2 x the working hours of an employee in 12 months: During the period of leave, the employer continues to pay 70% of the employee’s salary. If this is less than the minimum wage, they pay the minimum wage.
Marriage Leave
None.
Bereavement Leave
None.
Termination Process
In The Netherlands, the employer has generally five ways to terminate the employment agreement:
Termination by mutual consent – by means of a settlement agreement;
Termination proceedings before the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV);
Termination proceedings before the cantonal court;
Termination with the consent of the employee;
Urgent dismissal.
Notice Period
The length of the notice period for an employer depends on the duration of the employment contract, with a maximum of 4 months.
Less than 5 years: 1 month
Between 5 and 10 years: 2 months
Between 10 and 15 years: 3 months
15 years or more: 4 months
The statutory notice period for an employee is 1 month.
Severance Pay
From the first day of employment, an employee is entitled to a severance payment (called a transition payment) in the event of dismissal at the initiative of the employer.
The amount of the transition allowance for a Dutch employee is 1/3 monthly salary per entire year of service from the first working day.
Probation Period
The duration of a trial period depends on the duration of the employment contract. However, it may never exceed a 2 month period. The same period applies to both employer and employee. Maximum of 1 month.
Temporary employment contracts of more than 6 months, but less than 2 years.
Temporary employment contracts without an end date. Maximum of 2 months.
Permanent employment contracts.
Working Hours
The majority of full time (voltijd) jobs in the Netherlands are between 36-40 hours a week, or seven to eight hours a day, five days a week.
Overtime
Dutch law does not provide a national standard for overtime; it is usually agreed upon by individual employment contracts and collective agreements.
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