How to hire and pay employees in Netherlands
With Instahirin, your business can easily hire employees in Netherlands. No more worrying about local laws, complex tax systems, or managing international payroll.
Before hiring
EMPLOYEES IN The Netherlands
Before hiring employees in the Netherlands, one key thing employers should be aware of is the country’s strong focus on data protection under the GDPR. You have a legal obligation to safeguard your employees’ personal data, especially when transferring information across borders. Ensuring compliance with these rules is crucial before making a cross-border hire.
Another important consideration is understanding the Dutch employment benefits and labor regulations. While the Netherlands has a social security system covering healthcare and pensions, many employers offer additional benefits like supplementary health insurance, holiday allowance, and pension contributions to stay competitive. Labor laws also include protections around working hours, contracts, and termination, so it’s important to be well informed.
At a glance
CURRENCY
Euro (EUR)
OFFICIAL LANGUAGE
Dutch
PAYROLL FREQUENCY
Monthly
EMPLOYER TAXES
25% to 36%
of gross salary
13th / 14th SALARY
N/A
Good to know
In the Netherlands, employees must give at least one month’s notice, regardless of length of service. Employers’ notice periods depend on the employee’s tenure starting at one month and increasing by one month for every five years worked, up to a maximum of four months.
The Netherlands has a universal healthcare system based on mandatory health insurance. All residents must purchase basic health insurance from private insurers, which covers essential medical care. Employers may offer additional private health insurance plans as an employee benefit for extended coverage.
Labor laws in The Netherlands
Working hours and overtime
The Canada Labor Code designates standard working hours to be eight hours daily and 40 hours weekly.
Employment contracts
Pursuant to Article 7:655 of the Dutch Civil Code, the employer must inform the employee in writing of the following within one month of starting employment:
- Name and residence of the parties
- Place where the work will be carried out
- Position and a description
- If the employment contract is for a fixed period of time, the time period
- Non-competition clause, if applicable
Probationary period
Overtime payment is not mandatory.
Standard working hours are 8 hours per day, 40 hours per week. The standard workweek is from Monday to Friday.
Calculate costs to hire internationally
Benefits and leave in The Netherlands
Annual leave in Canada
The statutory number of paid leave hours per year is at least four times the number of weekly working hours. By this calculation, a full-time employee is entitled to a minimum of 20 days of paid leave per year, excluding public holidays. Employees are free to negotiate more paid leave per year. Collective labor agreements may specify additional leave provisions.
Sick leave
During an employee’s illness, the employer must pay at least 70% of the employee’s most recently earned wages. Employers are obliged to do this for a maximum period of two years. In the first year of illness, if the amount of sick pay is less than the minimum wage, employers must supplement it to meet the minimum wage requirement. In the second year of illness, the employer is not required to supplement the sick pay to meet the minimum wage requirement.
Parental leave
Employees with children aged up to eight may take unpaid leave in the Netherlands. This leave is a maximum of 26 times the number of hours worked per week. Employees can take this leave as soon as they begin working for an employer. Employers are not required to pay an employee’s salary during parental leave in the Netherlands unless this is agreed upon in the collective labor agreement or employee contract.
Pregnant employees are entitled to six weeks of pregnancy leave before the due date and 10 weeks of maternity leave after childbirth. If the baby is born before the pregnancy leave, the 16 weeks of leave begins the day after birth. In the case of multiples, an employee is eligible for at least 20 weeks' leave.
Emergency leave and short absence leave are intended for unforeseen personal circumstances, where an employee must immediately take time away from work. Employees can take this leave for as long as necessary to solve an urgent private problem, which can take a few hours to a few days. During this leave, employers continue to pay 100% of employee wages.
Holidays
The Netherlands has the following 11 public holidays, which are not included in the minimum paid leave entitlement. However, employers generally give their employees all of the Netherlands’ public holidays off work.
Employer tax
In the Netherlands, employers typically pay around 25% to 36% on top of an employee’s gross salary. This covers:
- Social security contributions (healthcare, unemployment, disability insurance)
- Pension scheme contributions (usually about 10% to 20%)
Individual tax
Individuals in the Netherlands pay national income tax based on a progressive tax rate system, which includes social security contributions. There are no separate provincial income taxes like in Canada; it’s a centralized system.
Termination in The Netherlands
Dutch law provides for the following statutory notice periods by the employer for the following lengths of service:
- Less than five years: one month
- From five years up to 10 years: two months
- From 10 years up to 15 years: three months
Notice period
The employee must give a notice period of one month. If applicable, a collective labor agreement can contain different rules regarding the notice period. During the probationary period, the employer may terminate the employment contract without notice.
Start hiring employees in
Netherlands
Setting up a legal entity every time you want to hire in a new country isn’t scalable it’s expensive, slow, and complicated. Hiring in the Netherlands comes with its own challenges: navigating Dutch labor laws, payroll taxes, social security contributions, and employee rights can be complex. Managing contracts, compliance, and payroll manually across borders quickly becomes cumbersome and risky.
Compliance is crucial. Ensuring you adhere to the Netherlands’ local employment regulations and tax requirements is essential to avoid fines and maintain smooth business operations.
With InstaHirin, you can easily manage HR, payroll, and automate compliance in Netherlands and 180+ countries all from one user-friendly platform so you can hire quickly and confidently without setting up a local entity.
Disclaimer: The information provided in this resource is for general educational purposes only and shall not be construed as legal advice. While InstaHirin yster strives to provide current and accurate information, InstaHirin makes no warranties or representations as to the correctness of the content provided and accepts no liability or responsibility for any errors or omissions in the content provided. By using this resource you acknowledge and agree that you do so at your own risk. The content of this resource is subject to change without notice.
