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Hiring Employees in the Netherlands: A Comprehensive Guide

R
Written by Rachael
Updated over a month ago

Table of Contents

  1. Introduction

  2. Key Considerations for Employing in the Netherlands

  3. Benefits

  4. Employment Contracts

  5. Onboarding

  6. Leaves

  7. Payroll & Taxes

  8. Termination Process

  9. Invoice Schedule

  10. Get Started with Omnipresent


1. Introduction

Hiring employees in the Netherlands requires compliance with strict labor laws, payroll regulations, and mandatory benefits. Omnipresent’s Employer of Record (EOR) service ensures that businesses meet all local employment obligations in the Netherlands.


2. Key Considerations for Employing in the Netherlands

  • Currency: Euro (€)

  • Language: Dutch

  • Employer Costs: High (~35% of salary)

  • Termination Complexity: Extremely difficult

  • Onboarding Timeline: Once we receive the relevant documents from the employee, the contract is approved by all parties, and the deposit (if applicable) is paid, Omnipresent can onboard the employee within just 48 business hours.

  • Payroll Frequency: Monthly.


3. Benefits

Types of Benefits Offered

  • Mandatory Benefits: Public healthcare, pension contributions, disability insurance, workers’ compensation.

  • Supplementary Benefits: Private healthcare, additional pension schemes, life & illness insurance.

Healthcare

  • Public healthcare (ZVW & WLZ) is mandatory.

  • Employees must take out private health insurance by law.

  • Many employers contribute 50% or a fixed amount to private insurance costs.

Retirement

  • State Pension (AOW): Funded by employee social security contributions.

  • Employer Pension Contributions: Required under an Adequate Pension Plan (15% in 2025, set annually by the government).


4. Employment Contracts

Contract Types

  • Indefinite-term contracts

  • Fixed-term contracts (max 36 months, up to 3 renewals)

  • Part-time contracts

Requirements

  • Written employment contracts are required.

  • Language: English

  • Signature Requirements: Digital (Qualified Electronic Signatures - QES).

  • Backdating: Not permitted under Omnipresent’s policy.

Probation Period

  • Indefinite-term or contracts ≥2 years: Max 2 months.

  • Fixed-term contracts (6 months - 2 years): Max 1 month.

  • Fixed-term contracts <6 months: No probation allowed.

  • Probationary periods provide lower termination costs and reduced dispute risks.

Contract Customisation

  • Optional clauses for customization, such as extra-legal sick days or unlimited time off.

  • Certain elements cannot be customized (e.g., restrictive covenants, overtime policies).


5. Onboarding

Timeline

The onboarding process in the Netherlands is typically very fast. Once we receive the relevant documents from the employee, the contract is approved by all parties, and the deposit (if applicable) is paid, Omnipresent can onboard the employee within just 48 hours.

  1. Platform Setup

  2. Right-to-Work Check

  3. Employment Contract Processing

  4. Benefits & Payroll Enrollment

Registration & Approvals

  • Employees must complete a Wage Tax Form before payroll registration.

Immigration & Visas

  • Omnipresent can sponsor EU Blue Cards for qualifying employees.

Right-to-Work Verification

  • Employers must conduct right-to-work (RTW) checks.

  • New highly skilled expats may qualify for a 30% tax ruling (reduction in taxable income).

Employee Transfers from Another EOR

  • Previous service can be recognized in the new contract.


6. Leaves

Leave Entitlements

  • Annual Leave: Minimum 20 working days (excluding public holidays).

  • Market standard: 24-25 days.

  • Statutory leave will carryover for 6 months into the next calendar year, until July 1st, while additional contractual leave can carry over for 5 years.

  • Employers must proactively inform employees of expiring leave.

Maternity & Paternity Leave

  • Maternity Leave: 16 weeks (fully paid, capped at statutory wage).

  • Paternity Leave:

    • 1 week fully paid.

    • 5 additional weeks (paid at 70% of salary by UWV).

Sick Leave

  • Employers must pay sick leave for up to 2 years (104 weeks).

  • First year: Minimum 70% of salary (must meet minimum wage).

  • Second year: 70% of salary (employer discretion to pay more).

  • It is common practice to pay 100% for the first year.

Public Holidays

  • 11 public holidays, including:

    • New Year's Day, Good Friday, Easter Sunday & Monday, King's Day, Liberation Day, Ascension Day, Pentecost, Whit Monday, Christmas, Boxing Day.

  • No substitute holiday if a public holiday falls on a weekend.


7. Payroll & Taxes

Payroll Cycle

  • Frequency: Monthly

  • Cut-off Date: 15th of each month*

  • Payment Date: Last working day of the month.

  • Mandatory Vacation Allowance:

    • 8% of annual salary paid across 12 months.

    • Not required for wages exceeding 3x minimum salary.

*Omnipresent supports both 6th and 15th cut-off dates in this country depending on our local partner. While we prioritise local partners with a later cut-off date, local partners with an earlier cut-off date might be chosen because of visa sponsorship ability and other factors. If you would like to switch to a local partner with a later cut-off date, feel free to reach out to your Customer Success Manager or our Support team at help@omnipresent.com.

Compensation

  • Minimum wage (2025): €14.06 per hour

  • Hourly wages are not supported by Omnipresent.

Standard Work Schedule

  • 36-40 hours per week (Monday-Friday).

Employer Costs

  • Estimated up to 35% of salary. Use the OmniCalculator for a detailed breakdown.


8. Termination Process

Notice Period

  • Varies by service length:

    • <5 years: 1 month.

    • 5-10 years: 2 months.

    • 10-15 years: 3 months.

    • 15+ years: 4 months.

  • Contractual notice periods can exceed statutory requirements.

  • Please be aware that if you select a notice period longer than the statutory, the employer will be required to give twice as much notice to the employee in the event of a termination. For example, if you choose 2 months' notice, the notice required in a termination by the employer would be 4 months' notice.

Termination Grounds

  • Extremely Strict labor protections apply.

  • Our standard approach is to propose a Mutual Termination Agreement before considering any alternative termination methods for any reason.

  • The only exception to this rule is when an employee commits what would be classified as 'gross misconduct', which must be reported to Omnipresent immediately.

Severance Pay

  • Mandatory severance (transitievergoeding):

    • 1/3 monthly salary per year worked.

    • Max €98,000 or 1 year’s salary (whichever is higher).

    • Severance applies even for probationary and fixed-term dismissals.


9. Invoice Schedule

Initial Fees

  • Setup Fees: Due upon signing Terms.

  • Deposit: Payable when the local employment contract is ready for signature.

  • First Salary Prepayment: Invoiced on the first day of employment.

Ongoing Monthly Payments

  • Labour costs invoiced monthly in arrears after payroll calculations.

  • Each invoice includes:

    • Monthly service fee

    • Deposit insurance (if applicable)

    • FX fee (if applicable)


10. Get Started with Omnipresent

We simplify international hiring, legal compliance, payroll, benefits, and more. Contact us to start your journey towards hassle-free global employment.

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