Payroll and Benefits Guide - Netherlands

Netherlands
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Currency

Euro (EUR)
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Capital

Amsterdam
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Employer Taxes

37.81% – 50.09 %

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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

Dutch people celebrate King’s Day (Koningsdag) on April 27th each year. It is a national holiday and a day of festivities, where people dress in orange, the color of the Dutch royal family.

The Netherlands is home to the largest flower garden in the world, Keukenhof.

The Dutch are known for their love of bicycles, and there are more bicycles in the Netherlands than there are people.

The Netherlands has a strong tradition of producing world-class DJs and electronic music.

The Dutch love their herring so much that they have a tradition called “haringhappen” (herring biting).

The Netherlands is famous for its Windmills, which were traditionally used for pumping water, grinding grain, and other industrial purposes.

Netherlands

Contributions

Employee Payroll Tax

Contribution TypeRate
Up to 37,149 EUR9.28%
37,149 EUR- 73,031 EUR36.93%
Over 73,031 EUR49.50%

Employer Payroll Tax

Contribution TypeRate
WAO/WIA5.49% to 7.11%
Unemployment Fund2.64% to 7.64%
HZVW:Healthcare Insurance Act6.68%
Whk: Work Resumption Fund0.21 % to 3.36%
Sickness Benefits Act0.16%
Child Care Premium0.50%
Pension15.8%-16.3%
Holiday allowance accrued8.00%

Payroll

Payroll Cycle

In the Netherlands, the payroll frequency is monthly. Work between the first and last day of the month is typically paid on the last day of the month.

13th Salary

13th-month salary payments are customary in the Netherlands and should be paid in November or December of each year; this is stipulated in the employee’s employment contract or collective agreements.

Work Hours and Week

The standard working week in the Netherlands may be no longer than 45 hours. This is commonly 40 hours per week of 8 hours per day over 5 days. Monday-Friday
Netherlands

Leave

Paid Time Off

A full-time employee is entitled to 20 working days of paid annual leave per year. However, in the Netherlands, it is common practice to offer 25 or even 32 days of paid annual leave.

Public Holidays

Public holidays falling on weekends are lost. Public holidays are not necessarily a paid leave day, as this depends on the employer’s policy or collective labor agreement (CLA).

Sick Days

If an employee is unfit to work due to sickness, they are entitled to 70.00% of their last earned salary for one year.

Maternity Leave

A pregnant employee is entitled to 16 weeks of paid maternity leave; maternity leave consists of two periods: prenatal leave and postnatal leave.

  • Prenatal leave: An employee must take 4-6 weeks of leave before the expected due date (zwangerschapsverlof).
  • Postnatal leave: A employee must take the remaining 10-12 weeks (bevallingsverlof)) which starts from the date of the birth of the child.

Paternity Leave

Partners are entitled to 1 week of leave within the first four weeks after the birth of the child. The employer continues to pay the regular salary during this week.

Parental Leave

Both parents can take a maximum of 26 times their weekly working hours in Parental Leave up until their child is aged 8 years old. Parental Leave is usually unpaid unless stated otherwise in a Collective Labour Agreement or Employment Contract.

Termination

Termination Process

The termination process varies according to the Employment Agreement and Collective Agreement in place and on the type of contract and reason for termination. However, no termination due to economic reasons or long-term disability may take place without the Employee Insurance Agency (UWV).

Notice Period

The statutory minimum notice period for termination in the Netherlands is one month, however, it is dependent

on the employee’s length of service as below:

Less than 5 years – 1 month notice

Between 5-10 years – 2 months’ notice

Between 10-15 years – 3 month’ notice

More than 15 years – 4 months’ notice

Severance Pay

Severance pay regulations are arranged by law, under what’s known as ‘transition payment’.

Probation Period

Probation Period

Probation or trial periods are generally set within the collective agreements and contracts of the employee; however, the standard practice is:

  • Indefinite contracts can have a maximum of 2 months probation
  • Temporary contracts under 6 months may not include a a probation period
  • Temporary contracts of 6 months to 2 years can have a maximum of 1 month probation
  • During the probation period, there is no notice period

VISA

VISA

There is no formal requirement for EU/EEA/Swiss nationals to obtain a residence or work permit. Still, they do need to obtain a residence permit to be eligible for social security benefits.

Nationals of the USA, Canada, Japan, Australia, New Zealand, and all non-EU/EEA/Swiss foreign nationals who wish to stay longer than three months in the Netherlands must obtain an “authorization temporary stay” (MVV) from the Dutch embassy or consulate in their home country before entering the Netherlands.

Remote Working

While it is not a legal right, employees may request to work (partly) from home under the Flexible Working Act, particularly if they have concerns regarding their health. As an employer, you must have valid reasons for rejecting such a request, such as scheduling conflicts or the inability to perform work duties elsewhere.

VAT

The standard rate of VAT in The Netherlands is 21.00%.

For companies looking to hire in the Netherlands without a local entity, see our full payroll service in the Netherlands.