Employing in the Netherlands
Payroll Services Netherlands
Allow your business the flexibility to focus on company growth by trusting our team at PeoplePay Global to handle your Payroll Services in the Netherlands for you.
Our team provides businesses with compliant, accurate and efficient payroll solutions that will manage employee salaries, tax withholdings and even social security contributions. We ensure that each of our experts is kept up-to-date with Dutch Payroll Legislation, focusing on each aspect of the payroll process with care, including wage tax and social insurance requirements.
Ensuring timely and accurate payments, Outsourcing Payroll can reduce workloads to allow your company to grow with confidence.
Dutch Payroll Services
Transform your business’s operations by Outsourcing Payroll in the Netherlands through our experts at PeoplePay Global. Our team will offer a reliable and accurate solution to managing employee pay and statutory obligations with ease.
Each step of the payroll process is handled with precision and in-depth knowledge of Dutch Payroll Legislation, to ensure that your company is staying compliant with ever-changing laws. We focus on ensuring accuracy with each aspect, including wage tax, social security contributions and pension requirements. Furthermore, salary calculations, filings and statutory deductions will be managed to ensure that your team is free to focus on long-term company growth.
Ensuring compliance with complex labour and tax regulation laws is our top priority, ensuring that your business can grow organically without stress. Whether you are a local business or a multinational organisation, our team can provide expert payroll solutions that are tailored to each of your business’s needs, whilst ensuring secure data protection measures.
Partner with us today to gain the peace of mind that your Dutch Payroll is being handled with precision and care.
In the Netherlands, pay and taxation are structured around gross salary, income tax, social security contributions, and employer contributions.
The Netherlands have a statutory minimum wage, set at €2,250 gross per month for anyone over 21 years old, working full-time on a 36-40-hour basis. Part-time employees will receive a pro-rata minimum wage based on their hours worked.
The maximum working week under strict working laws is 48 hours, averaged over 4 weeks.
Employees’ gross salary is reduced by income tax, national social security contributions, and social insurance contributions.
In terms of income tax, for any earnings up to €73,000, you will be taxed at a 36.93% rate, including your social security. For earnings above €73,000, you will be taxed at a rate of 49.50%. National insurance contributions are included for pensions, disabilities, and survivor benefits.
Employees must pay national insurance and employee insurance contributions. These contributions are typically around 27% combined, with employers paying an additional 18-20% of gross pay.
In the Netherlands, pension contributions include a state pension, an occupational pension, and optional private pension contributions.
State pensions are mandatory for all residents and are funded through pay-as-you-go taxation. This covers basic living expenses in retirement and is paid monthly starting at age 67. The amount you will receive depends on your years of residence/work in the Netherlands; you will receive full AOW if you have lived/worked in the Netherlands for over 50 years.
With occupational pensions, most employees participate in sectoral or company pension funds, which are mandatory in many sectors. Occupational pensions are funded by both employees and employers, with contributions typically based on salary and a percentage of gross pay. For example, employees may pay a typical rate of 5-7% of gross salary, with employers paying 10-15%.
For private/personal pensions, tax-advantage schemes can allow deductions on contributions up to certain limits.
Employees will also pay a mandatory social security contribution of ~27%, which will partially fund AOW, disability and survivors’ benefits.
In the Netherlands, working hours are regulated by the Working Hours Act and collective agreements between employers and employees. The rules aim to help balance work and rest whilst respecting EU law.
A typical full-time working week in the Netherlands is 36-40 hours, with a maximum of 12 working days. The weekly maximum working hours are 60, but the average is 48 over 16 weeks.
No statutory premium rate applies to overtime unless specified in a contract or sectoral agreement. Extra pay is typically 1.25-1.5x normal pay, or given in time off in lieu.
Part-time workers will receive a pro rata right to leave and rest periods, with flexitime and home-office arrangements common in office sectors.
In the Netherlands, statutory leave and time off are strictly regulated under the Working Hours Act and related labour laws.
The minimum statutory leave employees are entitled to is 4 times their weekly working hours, i.e., 20 days per year for a 40-hour working week. However, many employers will offer 25-30 days as standard practice. Part-time employees will receive pro-rata leave. Any unused annual leave will be carried over to the next year.
The Netherlands have 8-12 national/public holidays per year, which are typically paid holidays if they fall on a normal working day. If employees must work on a public holiday, they will be compensated with extra pay or a replacement day off.
Employees are entitled to up to 2 years of sick pay, and employers must pay at least 70% of the gross salary. Employees must report their illness promptly and provide medical certificates if required.
For maternity leave, employees are entitled to 6 paid weeks before birth and 10 paid weeks after birth. They will be paid through UWV maternity benefits and typically receive their full salary. Paternity leave is allowed for 2 weeks at full pay and must be taken within 4 weeks of birth. They will also be paid via UWV at their full salary. Paternal leave can be requested for up to 26 weeks, unpaid per parent and per child. It can be taken at any time until the child turns 8.
In the Netherlands, termination of employment is strictly regulated. The main rules are set out in the Dutch Civil Code and the Employment Protection Act.
If an employee is terminated by their employer, it must be for a valid reason, such as misconduct. Immediate termination without notice is permitted only for serious misconduct, such as theft or fraud. If any employee terminates their employment, they must work their notice period as follows.
However, this varies by circumstance. If the employee terminates their employment, they are only required to work for 1 month of their notice period. If it is the employer who terminates their employment for any reason other than serious misconduct with immediate dismissal, they will have to work as follows:
- 1 month for < 5 years of service
- 2 months for 5 – 10 years of service
- 3 months for 10 – 15 years of service
- 4 months for 15 – 20 years of service
- 5 months for 20+ years of service
If an employee is dismissed, they will typically need one of two routes:
- UWV (Employee Insurance Agency) approval, which is required for long-term incapacity or redundancy
- Subdistrict Court procedure, which is used for performance or misconduct cases, where the court will decide if the dismissal is warranted.
Failure to follow the proper procedures may result in reinstatement or additional compensation.
Employees terminated after ≥24 months of service are entitled to a mandatory severance payment calculated at ⅓ of their monthly salary for each year of service, and this applies only to dismissals initiated by the employer.
Our payroll solutions support all aspects of employee management, from global HR to benefits and compensation.
