Payroll & Employment Guide: Netherlands

Hiring in the Netherlands

If you want to hire remote workers in the Netherlands, you must follow Dutch rules on minimum wages, work contracts, and social security. Understanding salaries, benefits, payroll taxes, employment costs, and legal requirements is essential for compliant hiring in the Netherlands.

Our experts help you structure compliant contracts, run payroll correctly, and stay aligned with Dutch labour regulations while building a strong local or remote team.

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Employee Benefits

Employers in the Netherlands must provide statutory benefits under Dutch labour and social security laws. Many companies also provide additional perks to attract and retain top talent in a competitive market.

Understanding both mandatory benefits and common market practices helps employers design attractive and compliant compensation packages.

Mandatory Benefits:

• Statutory paid leave (minimum 20 days per year)
• Sick leave and income continuation (often 70–100% of salary, depending on company policy and collective agreements)
• Maternity and paternity leave
• Social security contributions (employer and employee)
• Pension contributions (depending on sector or collective agreements)

Leave Policies:

• Annual leave: at least 20 vacation days per year (for full-time) plus public holidays
• Sick leave: employees are generally entitled to continued pay during sickness, subject to legal and policy rules
• Parental leave: 16 weeks maternity leave; at least 2 weeks paternity leave
• Shared parental leave: additional options are available within statutory limits

Healthcare:

• Healthcare is covered via mandatory Dutch health insurance
• Many employers offer supplemental health insurance as an extra benefit

Retirement & Social Security:

• Participation in pension schemes is common and sometimes mandatory by sector
• Employers and employees contribute to state and occupational pension systems

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Taxes in the Netherlands

Taxes in the Netherlands are structured to support social services, healthcare, and public infrastructure. Residents are generally required to pay income tax on their worldwide earnings, with progressive rates.

Employers are responsible for deducting wage tax and social security contributions from employee salaries. Payroll taxes include income tax and mandatory social security contributions.

Personal Income Tax Rates:

• Progressive system: 36.93% up to €73,031
• 49.50% on taxable income above €73,031

Tax Allowances & Reliefs:

• General tax credit
• Labour tax credit
• Other deductions or allowances may apply depending on individual circumstances

Employers must ensure that wage tax and social security withholdings are calculated correctly and reported on time, in line with Dutch tax authority requirements.

Payroll in the Netherlands

Employers in the Netherlands are required to pay salaries as stated in employment contracts or collective labour agreements, ensuring compliance with the statutory minimum wage.

Base Salary:
The base salary is the minimum amount an employee earns before bonuses, benefits, or allowances. It depends on job role, industry, experience, and must at least comply with the statutory minimum wage, which varies by age.

Minimum Wage (reference levels):

• Employees 21+ (full-time): approx. €14.40/hour (~€2,437.07 gross per month)
• 20 years: €11.52/hour
• 19 years: €8.64/hour
• 18 years: €7.20/hour
• 17 years: €5.69/hour
• 16 years: €4.97/hour
• 15 years: €4.32/hour

Salaries are typically paid in euros (EUR). If a contract uses a foreign currency, it must clearly state the conversion method and remain compliant with Dutch tax rules.

Payment Schedule:

• Most employees are paid monthly, often on the last working day of the month
• Additional payments, such as a 13th or 14th month, are optional and may be provided at the employer’s discretion (commonly in December)

Taxes & Social Security:
Employers must withhold income tax and social security contributions, including contributions for pensions, unemployment, and healthcare. Contribution levels may change slightly at or above certain income thresholds.

Payroll Reporting:

• Monthly: Payroll tax returns including wages, taxes, and contributions
• Quarterly: Certain social security contributions may be reported quarterly
• Annual: Yearly summary of earnings and withheld taxes provided to employees (by 31 January) and final reconciliation with the tax authorities

Key Deadlines:

• Salary payment: typically the last working day of the month
• Taxes & contributions: monthly payroll filings
• Payroll declarations: monthly, quarterly, and annually as required

Payroll Currency: EUR

This structured payroll framework supports transparency, compliance, and timely payments, helping employers and employees navigate Dutch payroll regulations smoothly.

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Legal Regulations

Dutch labour laws are primarily codified in the Dutch Civil Code and other employment legislation. They define employment status, minimum wage, working hours, statutory benefits, and workplace protections.

Total Employment Cost:

• Employer social security contributions: approximately 20–25% of gross salary

Minimum Wage:
Reference minimum wage: €12.38 per hour (subject to periodic adjustment).

Probation Period:
Typically between 1 and 6 months, depending on contract length and legal limits.

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Work Permits & Visas for the Netherlands

Non-EU nationals generally require a valid work permit or residence permit to work in the Netherlands. The type of permit depends on nationality, job role, salary level, and contract type.

Types of Permits:

• Highly Skilled Migrant permit
• EU Blue Card
• Intra-Corporate Transfer (ICT) permit

Additional conditions apply around minimum salary thresholds, recognized sponsor status, and length of stay.

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Employer of Record (EOR) Services in the Netherlands

With EOR services, you can hire employees in the Netherlands without establishing a local legal entity. Your EOR becomes the legal employer while you manage day-to-day work.

Your EOR typically handles:

• Legally compliant employment contracts
• Payroll processing & monthly salaries
• Wage tax, social security, and other statutory contributions
• Benefits administration
• Employee onboarding & offboarding
• HR documentation & compliance monitoring

PEO Services in the Netherlands

A Professional Employer Organization (PEO) supports your HR and administrative operations while you remain the legal employer. This model is useful if you already have a local entity but want to outsource HR, payroll, and compliance tasks.

Typical PEO support includes:

• HR support and workforce administration
• Payroll and benefits management
• Compliance with Dutch labour regulations
• Drafting and managing employment contracts

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Payroll Calculator

Estimate salaries, employer contributions, and statutory deductions in the Netherlands using Dhi ADT’s payroll calculator. Get a quick view of gross-to-net calculations and total employment costs.

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