NetherlandsAn employer’s guide to employment regulations, laws, and Employer of Record (EOR) services in the Netherlands.
Looking to hire in the Netherlands? An EOR can assist
Engaging an Employer of Record (EOR) can be a great move for businesses looking to enter the Netherlands without setting up a local entity.
By leveraging an EOR, you can bypass the complexities of local laws and outsource core HR functions like payroll, benefits administration, and tax management.
An Employer of Record acts as the official employer for your Dutch workforce, while you maintain control over everyday activities and staff management.
How to hire in the Netherlands
Step 1: Choose between setting up a local entity and using an EOR
When hiring in the Netherlands, you can either establish a local entity or use an Employer of Record (EOR) service.
Setting up a local entity gives you full control over your HR function, but demands a substantial investment of time, money, and effort. The process involves registering your business with Dutch authorities, appointing directors, and adhering to detailed tax regulations. This can take several weeks, potentially delaying your hiring timeline. Additionally, you’ll need to handle all Dutch employment laws on your own.
An EOR service takes on the responsibility of staying compliant with employment regulations and managing HR tasks. With no need to set up a local entity, you can set up in new markets quickly and with less risk.
If you’re planning to hire a large team and establish a significant presence in the Netherlands, setting up a local entity might be beneficial. However, if you need a faster and more straightforward hiring process, an EOR offers a more efficient solution.
Step 2: Finding the right EOR
Selecting the right Employer of Record (EOR) for your operations in the Netherlands is essential. An unsuitable EOR can lead to compliance issues, unexpected costs, and a subpar experience for your new employees. Consider these key factors:
- Legal compliance. Verify that the EOR understands Dutch labor laws, employee rights, tax obligations, and local benefits. Check their track record and ask about their experience with specific industries.
- Customer service. Ensure the EOR offers ongoing support. Multiplier, for example, offers 24/5 expert support and provides dedicated managers for every account.
- Transparent pricing. Be cautious of EORs that advertise low initial fees but have hidden costs or complicated pricing structures. Make sure you have a clear understanding of all potential expenses before committing.
- Total cost of ownership. The cheapest option isn’t always the best. Lower-cost EORs may end up being more expensive if they’re not effective. Choose a service that delivers quality within your budget, while still offering the necessary features.
Step 3: Employing and onboarding in the Netherlands
Send over the contract
Once you’ve chosen a candidate, the next step is to create an employment contract that aligns with Dutch labor laws. Multiplier can prepare this for you in minutes and you can customize it with key details.
Once prepared, your EOR will handle the secure delivery of the contract to the candidate for signing.
Enhance compensation with competitive benefits
To attract top talent in the Netherlands, offer a robust benefits package. You can save time by leveraging the benefits packages provided by your EOR rather than sourcing local vendors yourself. An EOR also handle sthe distribution of any necessary IT equipment to your new employees.
Get all your documentation in order
Onboarding involves gathering the new hire’s tax and banking details. An EOR can simplify this process, ensuring payroll setup is efficient and minimizing paperwork.
Step 4: Run payroll for employees based in the Netherlands
Managing payroll for employees in the Netherlands involves navigating local tax regulations and mandatory contributions. The Netherlands has a progressive income tax system with rates ranging from 9% to 49.5%. Employers are required to make contributions to several social security funds.
An EOR like Multiplier can streamline payroll management by ensuring accurate and timely salary payments, local taxes, and social security contributions. With Multiplier’s global payroll solution, you can oversee payroll for all your international employees from a single platform, avoiding the complexity of dealing with multiple local providers.
Employment laws and regulations in the Netherlands
Employers in the Netherlands must comply with Dutch labor laws which includes various regulations concerning working hours, overtime, mandatory benefits, and termination procedures.
For example, the standard workweek in the Netherlands is capped at 40 hours, with a maximum of 8 hours per day. Overtime is typically paid at 125% to 150% of the regular hourly wage, depending on the agreement or collective labor agreements in place.
Employ top talent in Netherlands through an EOR
Onboard, pay, and manage all your international employees
Employee benefits and compensation
The minimum wage in the Netherlands is set at €11.75 per hour as of 2024. And, in the Netherlands, employee benefits also play a crucial role in the overall compensation package. They include:
- Pension contributions. Employers must contribute to employees’ pension funds at a fixed percentage of the employee’s salary.
- Unemployment insurance. This insurance provides support if an employee can’t work.
- Health insurance. Employers must contribute to the health insurance fund to support access to healthcare services.
- Annual leave. Employees are entitled to a minimum of 20 days of paid annual leave per year based on a full-time work schedule.
- Sick leave. This typically covers 70% of an employees regular salary.
For those looking to provide extra perks to attract and retain talent, Multiplier’s Global Benefits platform provides a range of localised benefits.
Termination and offboarding procedures
In the Netherlands, termination and offboarding procedures must align with local regulations regarding notice periods and severance pay. The standard notice period generally ranges from 1 to 4 months, depending on the employee’s length of service and the terms outlined in the employment contract.
Severance pay, known as “transitional compensation,” is typically required if the employer initiates the termination. This compensation amounts to one-third of the employee’s monthly salary for each year of service, though specifics can vary based on individual contracts and company policies.
Navigating these procedures can be challenging, especially for companies unfamiliar with Dutch labor laws. An EOR like Multiplier can streamline the process by managing all aspects of termination and offboarding, ensuring compliance, and reducing administrative burdens.
Visa and work permit assistance
Hiring international employees in the Netherlands involves obtaining the appropriate visas and work permits. Here are the main visa categories for working professionals in the Netherlands:
- Highly Skilled Migrant Visa. For foreign nationals with specialized skills or qualifications. This visa allows them to work for a Dutch employer and is usually issued for up to five years, with possibilities for extension.
- EU Blue Card. For highly skilled non-EU workers. This visa provides a longer stay and facilitates mobility within the EU.
- Intra-Company Transfer Visa: For employees transferred within a multinational company to a Dutch branch.
- Business Visa. For individuals coming to the Netherlands for business activities, such as meetings or negotiations. This visa does not permit direct employment but allows for business-related activities.
Navigating visa applications and renewals can be complex and time-consuming. Expert assistance is often necessary to ensure compliance with Dutch immigration laws.
Multiplier offers comprehensive support for work permits and visa management as part of its Employer of Record (EOR) services. For more details, visit our Global Immigration page.
Get started with Multiplier’s EOR services
By partnering with Multiplier, you can hire employees without setting up a local entity, simpify HR functions and enhance the overall employee experience.
We manage everything from drafting contracts that comply with Dutch regulations to overseeing payroll and tax obligations. Plus, we provide a range of customizable benefits that align with local standards.
See how Multiplier can streamline your HR operations and ensure compliance in the Netherlands. Book a demo today.
