Employer of Record in the Netherlands (EOR in the Netherlands)
Last updated
- Capital City
- Amsterdam
- Languages
- Dutch
- Currency
- Euro (EUR)
- Population Size
- 17,900,000
- Employer Taxes
- 1,382.50
- Employee Costs
- 6,382.50
- Payroll Frequency
- Monthly
Hire Globally, Pay Locally, Expand Effortlessly
The Netherlands, renowned for its open economy and strategic location in Europe, presents vast opportunities for international businesses. However, effectively navigating the Dutch regulatory environment, including labor laws and tax regulations, can be challenging. This is where an Employer of Record (EOR) in the Netherlands can be invaluable, acting as your local partner to ensure a seamless market entry and ongoing compliance with all necessary regulations.
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Why Choose A EOR Over Company Incorporation?
The administrative requirements for incorporating a new or separate legal entity in the Netherlands are numerous and complex. Well-developed regulatory systems mean companies wishing to begin in the market need to be aware of how to remain compliant with labor standards at all times.
The processes involved in setting up a company can mean thousands of euros in fees or overheads and months of work.
However, working with a local EOR (Employer of Record) services provider can prevent these complications. A EOR allows you and your employees to get to work in a fraction of the time and cost.
A EOR:
- Greater compliance assurance
- Minimized fees and setup time
- Access to expert support and guidance
- Streamlined company structuring
PEO/EOR Vs Company Incorporation
The Advantage in Figures
| PEO/EOR | Company Incorporation | |
|---|---|---|
| Price | 80% Less Expensive | |
| Market Entry | 2-5 Days | 6 Months |
| Employee Turnover | Decrease by 14% | |
| Recommendation | 98% of the Current PEO Clients | |
| Administrative Fees | Saves an Average of $450 | |
| Costly Payroll and Compliance Fines | Help Avoid | |
| Company Growth Rate | 7 – 9% | |
| ROI | 27% | |
| Closed During Pandemic | -58% | |
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The Advantages of a Dutch EOR
World-Class Setup
An EOR simplifies the complexities of the Dutch tax system and labor laws, ensuring your business is compliant from the outset.
Compliance Assurance Expertise
Dutch regulations can be complex, but EORs possess the expertise and experience to keep your business compliant with local tax laws, labor regulations, and social security contributions.
Liability Minimization
Acting as your legal employer in the Netherlands, an EOR mitigates the risks associated with employment regulations and ensures adherence to all compliance requirements.
Business-Focused Support
Delegating HR tasks such as recruitment, payroll processing, and tax management to your EOR allows you to concentrate on core business activities.
Cost Structures
EOR services are often more economical than setting up a local subsidiary, especially for smaller teams or temporary projects. They help you avoid initial incorporation costs and ongoing administrative burdens like hiring in-house HR staff.
How does a EOR in the Netherlands Work for You?
INS Global offers a solution following these 4 simple steps:
- 1
We will meet with you to go over the project’s scope and confirm your requirements. We then devise a strategy together based on how we can help and take care of the needs of your business.
- 2
We provide an entity in the Netherlands through which your employees can be hired and managed.
- 3
Your employees are brought onboard through our Netherlands EOR, and we ensure their complete compliance with every relevant regulatory procedure.
- 4
You and your employees can continue operations as usual while we take care of the rest.
The Differences Between PEOs and Employer Of Record
When considering a partnership with a PEO in the Netherlands, you will likely also hear the term EOR (Employer of Record). Typically, the two terms are largely interchangeable based on the kind of services they offer. The main difference between the two is the level of liability taken on by the PEO/EOR and the parties involved in the agreement.
- A PEO provides all HR services to employees on behalf of other companies
- A PEO agreement is made between the PEO and the original company to share the responsibilities for the employee
- An EOR in the Netherlands legally hires the employee on behalf of the original company and provides all HR services
- An EOR agreement is made between the EOR and the employee on behalf of the original company
In the Netherlands both services are indistinct according to national regulations, but INS Global can offer any elements of both according to your requirements
INS GUIDES
Check Our The Netherlands Labor Law Guide
Learn how the Dutch Labor Law Guide is applied in all aspects and situations, from an employer and employee perspective.
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Labor Law in the Netherlands
Employment Contracts In the Netherlands
If either the duration of the contracts or the number of fixed contracts concluded exceeds the statutory limit of 2 years, the contract of employment automatically becomes an indefinite contract
If a contract is for a period of under 2 years, the probation period cannot be longer than 1 month.
The standard average working hours for a full-time employee in the Netherlands is 38 hours a week. However, many companies have their employees working between 36 – 40 hours a week as standard.
The maximum working hours allowed per day are 12 hours per shift or 60 hours per week. However, this limit is only available for brief periods, and employees may not work more than 55 hours a week for over 4 weeks.
The maximum probation period in the Netherlands is set at 2 months, and if an employee is contracted for a period of fewer than 6 months, an employer cannot require any probation period.
Types Of Leave
Employees in the Netherlands are eligible for annual leave equivalent to 4 times their standard weekly working amount. For an employee working 5 full days per week, this means they would be entitled to 20 days of annual paid leave.
While the Netherlands observes 11 days of public holidays per year, employers are not obliged to give employees time off on these days. Mandatory leave on these days should be agreed upon in your contract with your employee or may be specified in the collective labor agreement for your sector.
Employees in the Netherlands may be eligible for up to 2 years of paid sick leave with proof of inability to work. The pay received during this time is a minimum of 70% standard salary. This is paid by the employer, and after the 2 year period, payments cease, with the employee being transferred to long-term social insurance benefits.
Maternity leave in the Netherlands is mandatory for 4 weeks before the expected due date and 12 weeks after the birth of a child.
This leave is paid at 100% standard salary up to a maximum threshold paid by the government. However, it is common practice for employers to make up the extra in the event that this maximum amount does not provide 100% of an employee’s salary.
As of 2022, parents in the Netherlands can also apply for 9 weeks of partially paid parental leave during the first year of a child’s life, and unpaid leave during the first 8 years of their life.
Tax Law and Social Security Payments in the Netherlands
Earned income in the Netherlands is taxed in 3 separate ways, called “Boxes”
Box 1:
- Employment Income
- Primary home ownership
- Periodic payments
- Income provision benefits
Box 2:
- Taxable income from substantial interest
- Flat rate: 26.9%
Box 3:
- Taxable income from Savings or Investments
- Flat rate: 31%
Employers are expected to arrange social security contributions for employees towards health insurance, unemployment insurance, and national insurance. These amounts to an employer’s contributions of around 18% of their employee’s standard salary (some of these costs having been lowered in 2021).
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Frequently Asked Questions
Global Employer of Record is an effective solution for companies looking to expand their workforce abroad effortlessly.
This approach allows you to outsource the international hiring process quickly and efficiently, providing access to a global talent pool while still managing payroll compliance in each country.
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