The Netherlands continues to shine as a powerhouse in talent competitiveness, as evidenced by its unwavering 6th position in the Global Talent Competitiveness Index 2022 (GTCI 2022), showcasing its dedication to fostering skills and knowledge exchange among the workforce, industry, and academia. 

The Netherlands is recognised as the Doorway to Europe" and has a flourishing talent pool, presenting it as an ideal market for businesses or enterprises seeking expansion. If you want to tap into the local workforce, you have two choices: register a legal entity or engage an Employer of Record in the Netherlands.

The Netherlands Labour Market: Overview

The Netherlands is a top choice for businesses trying to increase their presence in Europe as the business landscape on the continent changes. With a GDP of around $1 trillion, the nation has a thriving economy and a workforce that values innovation.

HR Growth Potential in the Netherlands     

The Netherlands is a desirable location for businesses looking to expand internationally due to its highly educated workforce and advantageous location inside the EU.

As of May 2023, the country boasted a low unemployment rate of 3.5% and a large population of highly skilled workers, especially in the tech industry.

In the Netherlands remote work is not just a trend but a widespread reality, with 65% of the workforce enjoying the flexibility of working from home.

Due to the increasing popularity of remote work, international businesses may now more easily access talent from anywhere in the world, including IT, design, and engineering.

In the Netherlands, the Gig Economy thrives, encompassing around 1.1 million workers engaged in freelance or contract work, especially in the tech and creative industries or sectors.

Employment Laws in the Netherlands

Employment Contract: Employee Contracts may be in Dutch or in any other language that the employer and employee may be able to understand. The contract should mention all the necessary conditions with leaves, working hours, benefits, and allowances to be provided to the employee. 

Minimum Wages: The minimum gross monthly wage in the Netherlands is € 1995 per month.

Employer Taxes: Employer Taxes are approximately 23.69% - 29.87% of Gross salary. 

Working Hours: The average working week in the Netherlands has 5 days with between 36 and 40 working hours.

Annual Leave: Employees are entitled to a statutory minimum number of annual leave days equivalent to four times the weekly working hours. 

This typically means 20 holidays in the case of a full-time employee working a five-day week (4×5  working days = 20 Netherlands vacation days). 

Probation Period: Dutch law allows for a probationary period of a maximum of two months for permanent contracts. For fixed-term contracts much stricter rules are in place and a maximum of one month’s probation is permissible. A probation period can only be concluded for contracts of over six months in duration.

Notice Period: The statutory notice period for an employee is 1 month.

Termination: Dismissal by mutual consent is only valid if it is recorded in a written termination agreement (settlement agreement).

The employee has 14 days to reconsider the dismissal by mutual consent. If he fails to do so, the reconsideration period will be automatically extended to 21 days.

Severance Pay: Employees are eligible for the severance payment when they have worked for the employer for at least 24 months and have been terminated by the employer, the employment relationship has been terminated on mutual consent at the employer’s initiative, a fixed-term employment contract has not been renewed by the employer or when the employee has terminated the employment relationship due to misconduct of the employer. 

National Holidays: 11 National Holidays 

1. New Year's Day 
2. Good Friday 
3. Easter Sunday 
4. Easter Monday 
5. Koningsdag 
6. Ascension Day 
7. Pentecost 
8. Whit Monday 
9. Christmas Day 
10. Boxing Day 
11. New Year's Eve

Benefits of using an EOR in the Netherlands

An EOR in the Netherlands provides a range of crucial services, including but not limited to:

Legal Compliance: Ensuring adherence to Dutch employment laws and regulations.

Payroll Management: Handling payroll processing, tax withholdings, and benefits administration.

HR Support: Managing employee contracts, onboarding, and offboarding processes.

Risk Mitigation: Employer of Record Netherlands mitigates the risks of international expansion, including handling employee termination and providing legal guidance.

Administrative Tasks: Managing paperwork, employee records, and statutory filings.

Unlock success in the Netherlands with a reliable EOR service provider

Partnering with an EOR can be a formidable strategy for achieving business prosperity in the Netherlands. By managing the complexities of employment, an EOR enables businesses to prioritize their primary activities.

With ADT Solution, your business can easily hire employees in the Netherlands. No more worrying about local laws, immigration visa and work permit services, tax compliance, or managing international payroll. 

Need assistance hiring in the Netherlands? Contact us about our Employer of Record in the Netherlands