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EoR in Netherlands

With its highly educated workforce, strong English proficiency and strong digital infrastructure, the Netherlands is a top destination for European talent. 

The only problem? Hiring employees in the Netherlands usually means setting up a local legal entity, registering with the Tax Administration, completing a risk inventory and a whole host of other admin tasks. All of this is time-consuming and expensive, and could mean big delays to your expansion plans. Thankfully, there is a solution that can help you quickly and easily hire in the Netherlands, without a mountain of paperwork: using an employer of record, or EoR. 

What is an EoR service?

An employer of record (EoR) is a company that engages workers on behalf of other organisations. They become the legal employer of their client’s workers, which means they take on the responsibility for ensuring labour laws are adhered to and the right taxes are paid. 

EoRs also provide various HR services, including assistance with onboarding, training, benefits administration, payroll and more. When you hire workers through an EoR, your workers will get a smooth and consistent HR experience, and your internal team will have the time and energy to focus on your business. Using a global EoR in the Netherlands Wherever you are in the world, using a global EoR is an efficient way to hire workers in the Netherlands. You’ll be able to bring the workers you need on board in the knowledge that they’re engaged fairly and compliantly and you won’t have to worry about the complexities of international payroll either. 

Your Netherlands EoR provider will be able to help you with things like: 

  • Administering pay and benefits
  • Arranging work permits for non-EU workers
  • Withholding and remitting taxes and social insurance premiums
  • Onboarding and training workers
  • Responding to workers’ HR questions and concerns
  • Handling health insurance and pensions 

Essentially, working with an EoR in the Netherlands means handing over responsibility for the administrative side of hiring workers, so all you have to focus on is finding the right person for the job. 

Finding an EoR provider in the Netherlands

The rise of remote work means there are now many companies offering EoR services in the Netherlands (and all over the world). If you’re considering working with an EoR in the Netherlands, it’s important to ensure it’s a good fit for your organisation. That means checking whether your chosen Netherlands EoR agency has the necessary compliance knowledge, experience, and team on the ground to support your Dutch employees in their professional journey. 

Hiring in the Netherlands without an EoR

Like all countries, the Netherlands has its own rules and regulations governing what employers can and can’t do. If you want to hire workers in the Netherlands without an EoR service, you’ll need a strong understanding of Dutch labour laws and tax legislation — or you could end up facing fines and legal fees. 

In this guide, we’ll take you through some of the basics that you’ll need to familiarise yourself with to hire in the Netherlands, including the different hiring options available, pre-hire checks you can carry out and the requirements for setting up payroll and compensating your employees.

Hiring employees in the Netherlands

Every country in the world has its own rules, laws, and customs when it comes to hiring employees. Companies wanting to hire in the Netherlands should be aware of the specific situation there before they begin their recruitment journey. 

In general, Dutch employment law is centred around strong employee protections, with specific rules that apply to employment contracts, termination, work hours, paid leave and more. There’s also a process that employers need to follow to hire employees in the Netherlands, which we’ll discuss in detail below. 

Employee hiring process in the Netherlands

The Dutch government has put together some guidelines outlining the steps employers need to take to compliantly hire in the Netherlands. Companies hiring foreign workers in the Netherlands (or hire in the Netherlands from abroad) may have to meet additional requirements. 

Here are the 12 things you’ll have to do to hire employees in the Netherlands: 

  1. Comply with laws and regulations related to recruitment: First, companies hiring in the Netherlands must make sure their recruitment processes are in accordance with the rules on equal treatment of candidates. Specifically, asking questions during an interview about someone’s health, private life, family or plans to have children is not permitted.
  2. Verify and register the identity of your employees: Employers who hire in the Netherlands are responsible for verifying the identity of the people they employ. You can do this by looking at an original identity document like a passport or Dutch identity card. You should verify the details on the ID, including the person’s photo, name, characteristics, and nationality, and then file a copy for your employee records.
  3. Complete the necessary screening and background checks: Employers in the Netherlands may be required to screen potential employees before they can hire them for certain roles. There are various background checks you can conduct, depending on the level of security required. For positions requiring security clearance, you need to contact the Dutch Intelligence Agency for a ‘declaration of no objection.’
  4. Update your business records: Employers in the Netherlands are also required to update mandatory information in their business records before an employee starts working for them. Typically, this means processing payroll tax records, a copy of the employee’s ID document, and their payroll statement.
  5. Register as an employer with the Tax Administration: If you’re hiring in the Netherlands for the first time, you’ll also need to register as an employer with the Dutch Tax Administration. This is an online process, and you’ll receive a payroll tax number and a payroll tax return letter once you’ve registered.
  6. Create and sign an employment contract: In the Netherlands, an employment contract is an agreement between an employer and an employee that describes the conditions of employment, including the employee’s salary, working hours, rest times, and benefits. There are several types of employment contracts you can use to hire in the Netherlands, including fixed-term contracts, permanent contracts, zero-hour contracts, and min-max contracts.
  7. Decide what to pay the employee: Employers in the Netherlands are free to negotiate with each employee to determine the salary they’ll pay. However, they can’t pay less than the Dutch minimum wage, which is currently €13.27 for people aged 21 and above. Employees are also entitled to a minimum holiday allowance and other statutory benefits.
  8. Provide safe and healthy working conditions: The Working Conditions Act (Arbowet) gives employees in the Netherlands the right to work in a healthy and safe environment. As an employer, you’ll have to draw up a health and safety policy and conclude a basic contract with a health and safety service provider to ensure your workplace meets the minimum standards required.
  9. Complete a risk inventory and evaluation: Employers in the Netherlands are obliged by law to draw up a risk inventory and evaluation (RI&E). This is a document that states the risks your staff might face while at work, and the measures you’ve put in place to address them.
  10. Deduct social insurance premiums: When you pay your employees, you have to deduct social insurance premiums and pay employee and national insurance contributions to the Tax Administration. This is only required for people who work permanently in the Netherlands.
  11. Verify your employees’ health insurance situation: As an employer in the Netherlands, you are responsible for checking if your employees have a standard Dutch healthcare insurance policy. If they don’t, the Dutch National Health Care Institute will insure them, and you must deduct the healthcare premium from their salary and pay it to the institute.
  12. Enrol employees in a pension scheme: In many sectors, employers in the Netherlands are obliged to offer their employees a pension scheme. If there is no sector-specific requirement, you can choose whether to offer a pension or not.

Background check in Netherlands

All businesses want to know if they can trust the people they employ. In the Netherlands, there are certain background checks that you can carry out as an employer to help establish if potential candidates are trustworthy. 

How to get a background check in the Netherlands

First, it’s a good idea to conduct a basic reference check on anyone you’re considering employing. Employers can do this by calling the references provided by the candidate. Getting the candidate’s permission before doing this is good practice. 

If the person you’re hiring is not a Dutch or EU citizen, you’ll also need to perform a visa check to make sure they have the right to work in the Netherlands. And, as we mentioned in the section above, employers in the Netherlands must carry out identity verification checks on all employees by verifying an original ID document and filing a copy. 

Business owners in the Netherlands can also create blacklists of people they no longer want to do business with, for example because they have stolen from them. There are strict rules around sharing these blacklists with others, but there is a public register of approved blacklists that employers can access. Checking whether a potential employee’s name appears on a blacklist is another employee background check you could perform in the Netherlands. 

When a Declaration of Conduct (VOG) is needed

A Declaration of Conduct (Verklaring omtrent het gedrag, VOG) is a document proving that a person hasn’t committed any criminal offences. VOGs are obligatory employee background checks for some jobs in the Netherlands, including teaching, childminding, and driving a taxi. They’re also mandatory for people who deal with confidential information, work with vulnerable people, work with money or valuable goods, or work for the government. 

If a Declaration of Conduct is not necessary for a particular role, employers in the Netherlands can still ask potential employees to provide one. Applying for a VOG is a simple process, which involves filling in a form and submitting it to the relevant municipal authority. 

Other possible background checks

For jobs that require security clearance at a confidential level, employers in the Netherlands might need to apply for a ‘declaration of no objection’ (verklaring van geen bezwaar, VGB). This is a certificate issued by the Dutch intelligence agency, the AIVD. 

Limitations on background checks in the Netherlands

As in many countries, there are some limitations on employee background checks in the Netherlands. For example, employers can’t ask potential employees for information about their health. Background checks in the Netherlands must also comply with the European General Data Protection Regulations (GDPR). That means that employers can only store and process data that’s directly relevant to the role in question.

Hiring options in the Netherlands

Employers who want to hire workers in the Netherlands need to know what hiring options are available to them. Specifically, they should understand the differences between employees and independent contractors according to Dutch employment law. Employers who don’t fully understand this distinction are at risk of fines and legal penalties for misclassifying employees. 

Hiring options in the Netherlands

In the Netherlands, there are three main types of employment arrangements that you should be aware of: 

  • Employment agreement: This is the standard form of engagement in the Netherlands. There are three core elements that must be present for a relationship to be considered employment under Dutch law. First, it must be a relationship of authority, where the employer can order the worker to carry out the work in a certain way. The worker must also be required to carry out the work themselves (rather than sending a substitute), and they must receive remuneration (wages) for their work.
  • Contract of work: A contract of work is an agreement where one person (an independent contractor) agrees to produce a tangible piece of work for a client, in exchange for a monetary sum. With a contract of work, the ‘employer’ has no authority over the contractor. The contractor also generally has a right to substitution, meaning they can engage someone else to perform the work.
  • Contract for services: A contract for services is similar to a contract of work, except that the work carried out doesn’t involve creating something material, retaining property, publishing works or transporting people or property. A worker engaged on a contract for services in the Netherlands is considered to be an independent contractor. 

Freelancers in the Netherlands

In the Netherlands, freelancers are referred to as zelfstandige zonder personeel, or zzp’ers. This isn’t a legal structure, but refers to self-employed professionals who register their own business and are responsible for finding their own clients. Many zzp’ers operate as sole proprietors (eenmanszaak), while others choose to use a different legal structure like a private limited company (bv). 

Employee vs. independent contractor

In Dutch employment law, whether or not someone is considered to be employed or self-employed depends on the actual relationship that exists between them and their employer. That means that someone could be judged to be an employee even if you have taken them on as a zzp’er. 

When you’re weighing up hiring options in the Netherlands, you should consider whether the working relationship you have with a worker will be considered employment rather than just the type of contract you want to give them. 

To determine whether someone is an employee in the eyes of the law, employers in the Netherlands should consider the following questions: 

  • How much freedom does the worker have to perform the work as they see fit?
  • Does the worker work for more than one client?
  • How is the worker paid?
  • Can the worker substitute someone else to do the work?
  • Is the work consistent or occasional?
  • Does the worker get paid sick leave or holiday leave?
  • Does the worker bear an ‘entrepreneurial risk’?
  • Does the worker supply their own tools and materials?
  • Is the worker responsible for their own taxes and social security contributions?
  • Does the worker perform tasks in addition to their agreed work? 

Generally speaking, workers who are able to organise their own work, can provide a substitute when necessary and are responsible for running their own business are considered to be an independent contractor (self-employed). Dutch law also says that independent contractors may not earn more than 70% of their income from a single client. This rule is designed to prevent ‘disguised employment’ situations, where people who are really employees (and thus entitled to certain benefits and protections) are passed off as independent contractors.

Agency workers

Another hiring option in the Netherlands is to hire temporary staff through intermediaries like temporary employment or secondment agencies. These workers are employees of the agency they are hired through, not the company they work for. Employers that hire agency workers in the Netherlands are required to check whether the supplier they use is listed in the Dutch Business Register (Handelsregister).

Netherlands language requirements

There is no specific language requirement in the Netherlands for employment documents. However, employers must make sure that employees understand the terms and conditions of their employment. 

Language requirements to work in the Netherlands

Employees generally don’t need to speak Dutch to work in the Netherlands, although it can be useful. The exception is when the work involves hazardous tasks, such as the operation of a crane or the removal of asbestos. In these cases, workers need to have an adequate command of the Dutch language to prevent accidents and ensure that work is carried out safely.

Dutch visa language requirements

People working in the Netherlands who want to apply for a permanent residence permit need to obtain a civic integration diploma, which requires a certain level of competency in the Dutch language. The required language level is different depending on the person’s situation, but it’s always between A2 and B1 on the Common European Framework of Reference for Languages (CEFR). 

Language requirements for citizenship in the Netherlands

Immigrants to the Netherlands who want to become naturalised Dutch citizens also need to pass the civic integration requirement as described above. With the civic integration diploma, it’s possible to apply for naturalisation.

Corporate payroll requirements and payroll setup

To hire in the Netherlands, it’s usually necessary to establish a corporate presence by setting up a local business entity. The most common types of entities are the private limited liability company (Besloten Vennootschap) and the public limited liability company (Naamloze Vennootschap). These are known as bv or nv, respectively. 

Setting up payroll in the Netherlands

A business that wants to hire and pay employees in the Netherlands first has to register as an employer. This is an online process done on the Dutch government website. Once you have registered, you will receive: 

  • A payroll tax number
  • A payroll tax return letter 

Most employers in the Netherlands also have to pay insurance contributions for their employees. If this is the case, you will also receive:

  • A letter confirming your sector
  • A notice stating the percentage for the Return-to-work Fund 

Running payroll

In the Netherlands, employees are required to withhold payroll taxes from the wages they pay their employees. Payroll taxes include:

  • Wage taxes
  • Social security contributions
  • Health care insurance contributions (for some employees) 

Each payday, employers have to calculate how much to withhold, file a tax return and then pay these taxes to the Dutch tax authorities. They must also keep up-to-date records on their payroll, and provide employees with payslips and annual income statements. 

Understanding corporate income tax

All businesses incorporated in the Netherlands have to pay corporate income tax (vennootschapsbelasting) on their taxable profit each financial year (which is the same as a calendar year in the Netherlands). As of 2024, the corporate income tax rates are: ● 19% on profits up to €200,000 ● 28.8% on excess profits

Easily hire employees in the Netherlands with our EoR solution

Hiring employees in the Netherlands usually means setting up a legal entity, which can be costly and time-consuming. Employers can avoid this hassle by working with an Employer of Record (EoR), like CXC. 

Through our EoR solution, you can confidently hire employees in the Netherlands, without worrying about compliance issues. We’ll handle everything from payroll to benefits to employment contracts on your behalf — so all you have to think about is finding the right person for the job.

Compliantly hire workers anywhere with CXC

With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.

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