Employer of Record & PEO in Netherlands
Hire & manage teams remotely in Netherlands without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
How NNRoad Employment & PEO Services Work?
NNRoad provides professional employment organization (PEO) & employer of record (EOR) services for companies looking to hire and manage teams in the Netherlands. Registering a legal entity in the Netherlands as a means for employment is an outdated practice that takes both time (months) and money (thousands of USD). NNRoad’s employer of record and PEO services enables companies to hire and manage employees in the Netherlands in full accordance with local labor laws in under a week.
Employer of Record the Netherlands
Employer of Record (EOR) services are for companies who do not have a legal entity in the Netherlands, but who want to hire in the Netherlands. Employment and full liability are outsourced to NNRoad.
➊ You interviews & select the candidates you want to hire in the Netherlands.
➋ NNRoad arranges a local labor contract with your new employee.
➌ NNRoad arranges a service contract between your organization & NNRoad.
➍ NNRoad organizes, manages & processes payroll in the Netherlands in full compliance with local employment laws.
➎ You maintain a normal working relationship and manage your team in the Netherlands while NNRoad manages payroll & HR liabilities.
- Recruiting process outsourcing (Optional/available upon request) – including but not limited to resume screening, criminal background check, reference check, shortlisting candidates, coordination for interviews, and assistance for salary negotiation
- Hiring of and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire)
- On-boarding and off-boarding employees
- Complete payroll solution and benefit administration
- HR administration and legal consulting
Payroll & PEO in the Netherlands
Professional Employment Organization (PEO) services are for companies who have a legal entity in the Netherlands, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.
➊ You interviews & select the candidates you want to hire in the Netherlands.
➋ NNRoad organizes, manages and processes payroll for your local employees in full compliance with local employment laws.
➌ You maintain a normal working relationship and manage your team in the Netherlands while NNRoad manages payroll & HR compliance.
- Payroll data management
- Registering the necessary company and personnel information for payroll calculation in the payroll software and system
- Amending salary changes online
- Digital employee login via an app on their telephone
- Payroll processing and reporting
- Payroll (and pro forma) calculation
- Pay slip review for each employee
- Payroll journal
- Withholding tax reconciliation test
- Year-end payroll reporting
- Salary disbursement to employee’s account
- Statutory benefits calculation and contribution to the authorities
- Issuance and employee bonus or commission payments (if applicable)
- Employee expense processing (if applicable)
Advantages of NNRoad's Netherlands Employment Services
- With EOR/PEO solutions you can manage client meetings, sales, quality control, marketing, R&D and customer support without a local company in the Netherlands.
- Pay as you go
- Dedicated account manager – One point of contact for multiple locations
- Employment & termination processing
- Complete payroll solution and statutory benefit according to local laws
- With EOR/PEO solutions you can hire staff while waiting for the registration of your company in the Netherlands.
- NNRoad only works with professional locally licensed partners
- GDPR compliant
- NNRoad manages employee record timekeeping, bonus and allowance, expenses claims and personal leaves according to local law.
- NNRoad provides foreigner VISA application services, if needed
Employment Compliance in the Netherlands
Taxes & Payroll in the Netherlands
Employee Income Taxes:
Individual income tax rates in the Netherlands are based on progressive tax brackets.
Residents of the Netherlands are subject to Dutch income tax on their worldwide income. This includes any income you earn from overseas sources.
There are a few exceptions to this rule, however. If you are considered a non-resident for tax purposes, you will only be taxed on your Dutch-source income. And if you are a resident but have your permanent home (“domicile”) outside of the Netherlands, you may be exempt from taxation on your foreign-source income.
9.42%: 0 – 35,472 EUR
37.07%: 35,472 – 69,398 EUR
49.50%: Over 69,398 EUR
Yearly income = 50,000 EUR
9.42% * 35,472 = 3,341.46
37.07% * 14,528 = 5,385.52
Total = 3,341.46 + 5,385.52 = 8,727
Yearly income tax = 8,727 EUR
Employer Costs in the Netherlands
Employer costs and contributions in the Netherlands are among the highest in Europe. The average cost of a pension in the Netherlands is around EUR 1,200 per year, while the average contribution is around EUR 2,400 per year. This means that employer costs and contributions make up a significant proportion of total labour costs in the Netherlands.
Despite these high costs, the Netherlands has one of the best pension systems in Europe. The Dutch pension system is based on a solid foundation of public and private sector pension funds. These funds provide a safety net for retirees and ensure that they receive a secure income in retirement.
The Dutch government also provides a number of tax breaks for employers who provide their employees with a pension. These tax breaks make it easier for employers to offer a pension to their employees and make the Netherlands an attractive country for businesses.
In order to keep costs down, the Dutch government has introduced a number of reforms to the pension system in recent years. These reforms have helped to reduce the cost of pensions and make them more affordable for employers.
Despite these high costs, the Netherlands still has one of the best pension systems in Europe. The Dutch pension system is based on a solid foundation of public and private sector pension funds. These funds provide a safety net for retirees and ensure that they receive a secure income in retirement.
The Dutch government also provides a number of tax breaks for employers who provide their employees with a pension. These tax breaks make it easier
2.70% – 7.70% – Unemployment insurance
7.03% – Health insurance
0.50% – Child Care Premium
7% – Health Care Act
Total employment cost: 22.23%
17.90% – Old Age Pension (AOW)
0.10% – Orphans and widow/widower pension (ANW)
9.65% – Long Term Care (WLZ)
Total employee cost: 27.65%
Working Hours in the Netherlands
Working Hours per Week
In the Netherlands, an average workweek is 36-40 hours long, with maximum working hours of 12 hours per day and 60 hours per week. Overtime is typically compensated at a rate of 1.5 times the regular hourly wage.
Working lengthy hours of overtime is not as common in the Netherlands as it is in other nations. Whether or not you are compensated for overtime hours worked is determined by the terms of your employment contract. Some employers will indicate in the contract that (a specific amount of) overtime labor is part of the job and is covered by regular salary, while others will offer monetary compensation or time off in exchange for any additional hours worked.
Benefits & Insurance in the Netherlands
There are a number of popular benefits and insurance programs in the Netherlands. These include health insurance, unemployment insurance, and disability insurance.
Health insurance is mandatory for all residents of the Netherlands. Popular health insurers include Zilveren Kruis, Achmea, Menzis, and VGZ. Unemployment insurance is also mandatory for all residents of the Netherlands. The most popular unemployment insurer is UWV. Disability insurance is not mandatory, but is often offered by employers as an employee benefit. The most popular disability insurer in the Netherlands is SVB.
In addition to these popular benefits and insurance programs, there are a number of other less well-known programs that can be of assistance to residents of the Netherlands. These include housing allowance, childcare allowance, and study finance. For more information on these and other programs, please visit the website of the Dutch government.
Social security has two parts. The national insurance scheme (volksverzekeringen) and the employee insurance scheme (werknemersverzekeringen).
The national insurance schemes are:
- General Old Age Pensions Act (AOW)
- Surviving Dependents Act (ANW)
- Long-Term Care Act (Wlz)
- Child Support (Kinderbijslag)
General Old Age Pension Act
According to the General Old Age Pensions Act, all Dutch citizens are entitled to a state pension (AOW). The amount of this pension is determined by how long you lived in the Netherlands before attaining state retirement age.
Surviving Dependents Act
All inhabitants of the Netherlands are insured for a surviving dependents’ pension based on the Surviving Dependents Act (ANW). The insured gross amount on an annual basis is €16,201. However, entitlement to this benefit depends on specific criteria.
Long Term Care Act
Residents who require a great deal of care or help on a daily basis, such as due to mental or physical disabilities, may be eligible for treatment under the Dutch Long-Term Care Act (Wlz).
Child benefit is a payment made to residents to assist them with the costs of raising a child.
For the employee insurances, the Netherlands has:
- Unemployment Insurance Act (WW)
- Work and Income Act (WIA)
- Sickness Benefits Act (ZW)
Unemployment Insurance Act
Employees in the Netherlands who become jobless may be eligible for unemployment benefits under the Unemployment Insurance Act. Employees receive 75% of their last salary.
Work and Income Act
After 104 weeks of disability, the WIA gives a payment to disabled employees under the age of 66 and 4 months who have a salary loss of at least 35 percent for (all forms of) approved employment.
Sickness Benefits Act
Despite being privatized, the Sickness Benefits Act (ZW) continues to exist as a “safety net” for temp workers or employees who do not have, or no longer have, an employer.
Termination Laws in the Netherlands
Dismissing employees in the Netherlands requires a valid reason. Refusal to do work, culpable behavior, excessive sick leave, reorganization, or corporate closure are all valid reasons.
The statutory notice period is one month, but this varies based on the employee’s length of service:
- 1-month notice if less than 5 years
- 2 months notice if between 5 and 10 years
- 3 months notice if between 10 and 15 years
- 4 months notice for more than 15 years
If an employee’s employment is terminated on the employer’s initiative after the implementation of the Balanced Labour Market Act on 1 January 2020, the employee is entitled to a transition payment from day one. If an employee’s employment contract ends or is not renewed due to the employer’s significantly liable actions, the employee is also entitled to a transition payment.
For each year that the employment contract has lasted, the transition payment is equal to one-third of the salary per month and a proportional part thereof for a period that the employment contract has lasted less than one year.
Public Holidays in the Netherlands
The Netherlands celebrates a number of holidays throughout the year. Some of the most popular holidays include Christmas, New Year’s Eve, Easter and Pentecost.
On Christmas Day, many Dutch families gather together to celebrate. presents are exchanged and a traditional meal is enjoyed. New Year’s Eve is also a time for family and friends to get together. A common tradition is to stay up until midnight to watch the fireworks and then eat twelve grapes, one for each stroke of midnight.
Easter is another important holiday in the Netherlands. It is celebrated with a special meal on Easter Sunday, which typically includes ham, lamb or beef as the main dish. On Easter Monday, many people take part in an egg-rolling contest.
Public Holidays in the Netherlands
- New Year’s Day – January 1st
- Good Friday – April 15th
- Easter – April 17-18
- King’s Day – April 27th
- Ascension Day – May 26th
- Whit Pentecost – June 5-6
- Christmas Day – December 25-26
Paid Leave in the Netherlands
For a Monday-Friday job, employees in the Netherlands normally have 4 weeks (20 working days) of vacation leave. If the annual salary is less than three times the yearly equivalent statutory minimum wage, employers must also pay a holiday allowance of 8% of the annual salary. This is a type of required bonus that is unrelated to the salary earned during the time off.
Employment Contract in the Netherlands
An employment contract (arbeidscontract) is a contract between an employee and his or her employer that specifies the working conditions.
There are two types of work contracts: temporary and permanent.
Contracts can be agreed upon in writing or orally. We suggest always concluding a contract in written form.
As an employer, you must give your employees a contract that contains the details of their employment like the location of the job, the employee’s job details, working hours and salary, term of the contract, probation period, holidays, notice period.
The duration of a probation period depends on the duration of the employment contract. However, it may never exceed a 2 month period.
Types of Leaves in the Netherlands
In the Netherlands, sick leave can last up to two years and is compensated at 70% of the employee’s pay. Most employees are bound by additional employee-friendly conditions in their contracts or Collective Labour Agreements.
Maternity leave in the Netherlands is strictly regulated. Employees who are pregnant are entitled to 16 weeks of paid maternity leave (6 weeks before and 10 weeks after the birth), which is paid by the Employee Insurance Agency and is capped at the daily statutory minimum pay.
Paternity and parental leave
After the birth of a child, partners of an employee are entitled to one week of paid paternity leave. This paid leave can be taken at any moment during the first four weeks following the child’s birth. Partners have the right to 5 weeks unpaid leave in the first 6 months after the birth of a child.
Immigration Laws in the Netherlands
Expats from within the EU, the EEA (the EU plus Iceland, Lichtenstein, and Norway), or Switzerland do not need a work or residence permit for the Netherlands.
The main work permit for the Netherlands are:
- GVVA or single permit – The GVVA is for workers and trainees from outside the EEA and Switzerland who will spend more than three months in the Netherlands.
- Highly skilled migrant permit – the highly skilled migrant plan (kennismigrant) is intended to help Dutch firms to recruit and retain talented foreign workers. This means that firms in the Netherlands can quickly get Dutch work permits for highly competent international workers without having to prove that no suitable Dutch or EU applicants are available.
- Orientation year permit for expat graduates – This is permission for non-EU / EAA / Swiss residents who have just completed a Master’s or PhD program at one of the world’s top 150 universities.
- Entrepreneur permit – Entrepreneurs must meet the standards for the performance of their business or profession and have all relevant permits for the company’s performance to qualify for this permit. Furthermore, their business activity must provide a significant advantage to the Netherlands.