Hiring Guide
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15
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Everything You Need to Know About Employing in The Netherlands

When it comes to assembling your team there are a lot of factors you have to look at – a couple of main ones being skill and competence. Today, more and more companies are opting to build remote teams to get access to talent from all over the world. One of the advantages of recent technology is that it erases geographical boundaries and opens up possibilities for everyone to work with distributed talent. One of the popular countries for hiring a remote employee is the Netherlands.

In this article we’ll be covering everything you need to know about employing talent from the Netherlands, including the hiring process, local labor law requirements, and more. Check out the FAQs below:

1. Why do people hire remote talent from the Netherlands?

In 2019, the Netherlands earned the top spot at the Remote Workers Index. This index was conducted by Plusnet with factors such as percentage of remote workers, internet security score, happiness index score, cost of living, number of co-working spaces, and more.

An article written by Katie Bishop in BBC, stated that the Netherlands has a ripe culture of remote work. With more than 1 million remote workers, a high internet speed, numerous co-working spaces and coffee shops, the Netherlands is one of the best countries in the world for remote and flexible work. 

As Bart Götte – a business futurist and psychologist – says in the same article, “[The] physical infrastructure [in the Netherlands] is well developed, and public and commercial remote-working facilities are plentiful.”

Another big advantage of hiring remote talent from the Netherlands is the high level of proficiency of a majority of the population. English is one of the many official languages of the country, with many locals able to read and write fluently in English. This multilingual recruitment advantage in the Netherlands makes it a favorite amongst employers.

2. Where do I look for remote talent in the Netherlands?

When looking for the best places in the Netherlands to hire remote talent, you typically want to hire talent from the following regions:

  • Amsterdam
  • Rotterdam
  • The Hague
  • Utrecht
  • Leiden
  • Groningen

These regions have a higher economic activity compared to the rest of the country, and have larger business hubs and more available talent. Getting graduates from the top universities in the country is also a plus:

  • Wageningen University and Research
  • University of Amsterdam
  • Utrecht University
  • Erasmus University Rotterdam
  • Leiden University

Another way to hire talent is to post listings on popular job sites and portals or hire through a trusted recruitment agency. In the Netherlands, the most popular jobs portals are:

3. What is the average salary of a Dutch remote employee?

The monthly minimum wage in the Netherlands is dependent on the age (mostly 20 years old and below) of the employee. As of July 1, 2021, this is the breakdown on the minimum wage for all Dutch employees:

Age Per month (EUR) Per month (USD) Per week Per day
21 years old and above 1,701 2,057.81 392.55 78.51
20 years old 1,360 1,645.28 314.05 62.81
19 years old 1,020.6 1,234.69 235.55 47.11
18 years old 850.50 1,028.91 196.30 39.26
17 years old 671.90 812.84 155.05 31.01
16 years old 586.85 709.95 135.45 27.09
15 years old 510.30 617.34 117.75 23.55

Here’s an approximation of the average yearly salary for six different positions:

Job Title Average Salary Range (EUR) Average Salary Range (USD)
Finance Manager 5,417 - 7,500 6,656 - 9,215
Developer (Contract) 3,583 - 4,750 4,402 - 5,836
Data Specialist – Warehousing/BI/Architect/Science (Contract) 3,583 - 4,750 4,402 - 5,836
Customer Service Representative (Multilingual) 2,250 - 3,167 2,765 - 3,891
HR Manager 5,833 - 7,917 7,167 - 9,727
Supply Chain Manager (Contract) 3,750 - 5,500 4,608 - 6,758

4. What are the computations for income tax in the Netherlands?

Net Taxable Income (EUR) Contribution (%)
0 - 2,892.67 9.70%
2,892.67 - 5,708.92 37.35%
> 5,708.92 49.50%

For more information about income tax, you can visit this website here.

While freelancing is quickly becoming a growing career trend in the Netherlands, one risk of hiring freelancers or independent contractors is their compliance with local tax laws. Without a local registered company withholding income tax for them, freelancers may fail or forget to pay their income tax. (See the other risks of hiring an independent contractor here.)

You can help your Dutch employee comply with local taxation laws by using Professional Employer Organizations (PEOs) like Multiplier who will take care of payroll and taxes for you.

5. What are the working hours in the Netherlands?

Employment laws in the Netherlands do not specify what constitutes a standard workweek. However, The Working Hours Act does place limits on working hours, setting the maximum length of any working shift at 12 hours and the total number of hours worked per week at 60 hours. Take note that this is just the maximum working hours in the Netherlands. The average working hours in the Netherlands of full time employees range between 36-40 hours a week and 7-8 hours a day, five days a week. Working hours should be agreed upon by both parties in the employment contract.

The Working Hours Act also sets some guidelines for employee rest breaks:

  • If an employee works for more than five-and-a-half hours, they are entitled to at least 30 minutes of break time. This can be split into two 15-minute breaks.
  • If an employee works for more than ten hours, they must have at least 45 minutes of break time. This can be split into several breaks, each of which must be at least 15 minutes.

There are also no national standards for overtime hours and overtime pay regarding employment in Netherlands. This is usually agreed upon beforehand by both parties via the employment contract.

Dutch law does not provide a national standard for overtime; it is usually agreed upon by individual employment contracts and collective agreements.

6. What benefits am I required by law to provide a Dutch employee?

Dutch Holiday bonus: While 13th month pay is not mandatory by Dutch law, they do have a mandatory Dutch Holiday bonus that is usually paid out in May or June. This is equivalent to 8% of the employee’s annual base salary.

Annual Leaves: Every Dutch employee is entitled to paid leaves. According to local law, the statutory number of leave hours per year is at least 4 times the number of weekly working hours. Full time employees who work 40 hours per week are entitled to 20 days of paid holiday leave per year. However, many companies usually offer more than the minimum leaves required, ranging from 24-32 days of annual leave.

Sick Leaves: There is no general number of sick leaves in the Netherlands. Instead, employers are mandated to pay 70% of the employee’s normal wages up to a maximum of two years. Some provisions to note are that the salary paid by the employer during the first year of sickness cannot be less than the minimum wage. For the second year, the minimum wage limit does not apply. However, it is not uncommon for employers in the Netherlands to pay 100% of the employee’s wages. This is also agreed upon beforehand in the employment contract. 

Family Leaves: 

Maternity Leave: All female employees are entitled to take 14-16 weeks maternity leave – usually 4-6 weeks before birth and 10 weeks after birth. If an employee takes less than 6 weeks (but no less than 4 weeks) of maternity leave before birth, the remaining week(s) can be added post-birth. The Netherlands is also quite lenient with the 16 week period. If the baby is born later than the due date, the maternity leave begins after the actual birth, with the total number of days or weeks being longer than 16.

Paternity Leave: Fathers are entitled to 1 week of fully paid paternity leave after the birth. This can be taken any time within the first 4 weeks after the birth of the child.

Other types of parental leaves in the Netherlands are as follows:

Type of Leave Duration of Leave (Days) Conditions Paid/Unpaid
Extended Partner Leave Up to 5 weeks Must be taken within the first 6 months after birth Unpaid
Adoption/Foster Leave 6 weeks Must be applied for at least 3 weeks in advance Paid by the UWV
Parental Leave No set duration Applicable for employees with children up to 8 years old Unpaid
Emergency Leave Dependent on the circumstance Intended for unforeseen personal circumstances wherein an employee has to take time off immediately (e.g. caring for a sick family member, death of a family member, etc.) Paid by the employer
Short-term Care Leave 2x the weekly working hours per 12 months of service with the company An employee is entitled to leave to care for an ill person, including:

> The employee's spouse or registered partner or the person with whom they cohabit

> A child living as part of the employee's household with whom the employee has a family-law relationship

> A child of the employee's spouse or registered partner or the person with whom they cohabit who lives as part of the employee's household

> A foster child living at the same address as the employee for whom the employee is permanently responsible for upbringing and care

> A first-degree blood relative, not being a child.

Paid by the employer at 70% of the employee’s salary. If this is less than the minimum wage, the employer will pay the employee the minimum wage.
Long-term Care Leave 6x the weekly working hours per 12 months of service with the company An employee is entitled to leave to care for an ill person, including:

> The employee's spouse or registered partner or the person with whom they cohabit

> A child living as part of the employee's household with whom the employee has a family-law relationship

> A child of the employee's spouse or registered partner or the person with whom they cohabit who lives as part of the employee's household

> A foster child living at the same address as the employee for whom the employee is permanently responsible for upbringing and care

> A first-degree blood relative, not being a child.

Unpaid

Insurance and social security: Employers are also obliged to pay a contribution towards unemployment (pension) insurance, (national) health insurance, child care premiums, and disability premiums. The breakdown for both the employer and employee contributions are as follows:

Employer Payroll Tax:

Type of Tax Contribution (%)
Unemployment Insurance 2.94-7.94% (depending on the duration of the contract)
Health Insurance 7%
Child Care Premium 0.50%
Disability Insurance 8.89%

Employee Payroll Tax:

Type of Tax Contribution (%)
Old Age Pension (OAP) 17.90% (max EUR 517.79)
Orphans and Widow/Widowers Pension (ANW) 0.10% (max EUR 2.89)
Long-term Care 9.65% (max EUR 279.14)

The total employee contribution to workers’ social security and insurance is 27.65% of the employee’s monthly salary. The total employer contribution to workers’ social security and insurance ranges from 18.83% to 23.83%.

7. What other benefits or allowances can Dutch remote employees be given?

While not mandated by law, it is quite common to provide non-taxable allowances for your remote employees, and it's expected by the employees. These can include stipends for business and equipment expenses, internet and telecom allowances, and even transportation allowance – if your remote employee works from a co-working space. If you work with a PEO like Multiplier, they can arrange for other benefits and allowances for your Dutch employees for you.

8. What are the regulations on working during the holidays in the Netherlands?

There are eight recognized public holidays in the Netherlands. For an updated list of Dutch holidays, click here. There is no national standard for work on rest days. If you require your Dutch employee to work on weekends and/or on public holidays, the employee is entitled to either extra pay or compensatory rest for the performance of work. This is usually agreed upon by both parties in the employment contract in the Netherlands.

9. How do I hire a remote employee in the Netherlands?

If your business is registered in another country, the easiest way to hire a Dutch remote talent would be through a Professional Employer Organization. PEO platforms like Multiplier make it easy for you to hire remote talent, comply with local labor laws, and pay your employees in time. Instead of having to jump through the legal and financial hoops of setting up a business entity in another country, Multiplier will act as your representative and abide by all the necessary laws for you.

If you want more details on how to hire a remote team legally, you can check out our article here.

10. Are probation periods necessary?

No, probation periods are not necessary when hiring a Dutch employee. If an employer does choose to set a probation period, it cannot exceed 2 months. Usually, the duration of the probation period will depend on the duration of the employment contract. This must also be noted down in the employment contract.

 to 3 month probation periods are allowable for employees on indefinite contracts if it is agreed upon in writing by both parties. However, this cannot be imposed on employees on a fixed-term contract.

Duration/Type of Contract Probation Period
Temporary employment contracts of more than 6 months but less than 2 years Maximum 1 month
Temporary employment contracts without an end date Maximum 1 month
Permanent employment contracts Maximum 2 months

11. How do I pay a Dutch remote employee?

The Netherlands usually follows a monthly payment cycle. Local labor laws state that all employees must be paid before the end of the month. However, both parties can also decide on a different date of payment through the labor contract.

The easiest way to pay your Dutch remote employees would be through PEO platforms like Multiplier. With a PEO platform, you won’t have to worry about payroll or compliance with local taxes and labor laws as they will be taking care of everything for you.

12. Can Dutch remote employees be paid in foreign currencies?

Generally speaking it is preferred to pay your Dutch remote employees in their local currency. This helps make tax calculations and contributions to benefits such as healthcare, pension, and more easier.

Agreeing on a flat rate in Euros is also beneficial in that it helps to avoid fluctuations in conversion rates. If you use PEOs like Multiplier, they will provide your Dutch employee with a fixed rate, make sure your employee is paid in their local currency, and take care of the employee’s taxes as well.

13. How do I terminate a Dutch remote employee?

There are generally four ways to terminate a Dutch employee:

  • Giving notice with prior consent from the Employee Insurance Agency, also known as the Uitvoeringsinstituut Werknemersverzekeringen (UWV) – A permanent contract with an unlimited term can only be terminated by the employer with the consent of the employee and the local labor office (UWV). The labor offices assess whether there are grounds for a valid termination. If an employer gives notice of termination without obtaining prior approval, the employee could nullify the termination. This generally takes up to two months.
  • Dissolution by the cantonal court – An alternative to termination is dissolution by the cantonal court. This procedure is generally quicker, as it takes 6-8 weeks and the court terminates the employment (without notice) instead of granting permission to give notice (in which case a notice period must be observed). In general, a severance payment is due unless the employee is to blame.
  • Mutual consent – Termination by mutual agreement between the employee and employer does not require authorization. However, some form of documentation is useful to comply with the stipulations of the collective agreement, such as periods of notice and payment of outstanding wages.
  • Urgent/summary dismissal – This type of dismissal applies to such cases as fraud, theft, refusal to come to work without good reason, etc. In the case of summary termination the employment contract ends with immediate effect. The employer does not need permission from the UWV to dismiss the employee.

According to the Netherlands employment law regarding termination, it is not possible on the following grounds:

  • Illness (at the time the consent is requested)
  • Pregnancy
  • Marriage
  • Parental leave
  • Membership of a trade union
  • Membership of a works council
  • Transfer of an undertaking

The length of the notice period for an employer depends on the duration of the employment contract, with a maximum of 4 months.

Duration of Employment Notice Period
Less than 5 years 1 month
5-10 years 2 months
10-15 years 3 months
More than 15 years 4 months

For an employee, the statutory notice period is 1 month.

Dutch employees are also entitled to severance payments (also called transition payments) from the first day of their employment. The amount of the transition payment is equal to ⅓ the gross monthly wage per year from the first day of employment. This is capped at €83,000.

Probation periods are also dependent on the duration of the employment contract, with a maximum of 2 months. Usually temporary employment contracts between 6 months and 2 years have a probationary period of 1 month, while permanent employment contracts have a probationary period of 2 months. This should be agreed upon by both parties in the employment contract.

Learn more about how you can easily hire remote talent from the Netherlands with the help of Multiplier. You can visit our website or contact us today.

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