Netherlands

Payroll & Benefits Guide

Capital

Amsterdam

Currency

Euro (EUR)

Date Format

dd/mm/yyyy

Dutch labour law

Dutch labour law is intricate and, in certain respects, differs greatly from other legal systems. In particular, the position of the employee, especially with respect to dismissal, is better protected than in many other countries.

Remote Workers Netherlands

While the benefits of this are clear to both businesses and employees (reduced office expenditure, higher productivity, increased work satisfaction and flexible working hours), it is also clear that some countries are much better set up than others to suit the demands of freelancers, entrepreneurs and business owners. And the Netherlands, apparently, is Europe’s forerunner.

Highly skilled migrant

The Highly Skilled Migrant Scheme is a fast and relatively simple procedure for hiring knowledge workers from outside the EU. It is by far the most popular option for companies that want to recruit international staff. For instance, no prior work permit is required.

Types of employment contracts in the Netherlands

There is a variety of employment agreements for employees in the Netherlands, with temporary and permanent contracts being the most common.

Temporary labour contract

Permanent labour contract)

Contract with a recruitment agency

Zero-hour contract

Freelancer contract

Salary requirements for highly skilled migrants in 2020

A minimum salary requirement exists for highly skilled migrants. The application must be accompanied by an employment contract confirming the salary. The minimum gross monthly salary of a highly skilled migrant in 2020 was as follows.

€3,381,00 (excluding 8% holiday allowance) for highly skilled migrants under 30.
€4,612,00 (excluding 8% holiday allowance) for highly skilled migrants aged 30 or older.
€2,423,00 (excluding 8% holiday allowance) for highly skilled migrants after an orientation year for graduates or highly educated persons.

CONTRIBUTIONS

Minimum Wage

0-34,712 EUR	9.70%
34,712- 68,507 EUR	37.35%
68,507 EUR and higher	49.50%

Payroll Tax

Type of Insurance	Employer %	Employee %
Unemployment	2.94% – 7.94%	0.00%
Health Insurance	6.77%	0.00%
Child Care Pemium	0.50%	0.00%
Old Age Pension (AOW)	0.00%	17.90%
Orphans and widow/ (ANW)	0.00%	0.10%
Long Term Care (WLZ)	0.00%	9.65%
Total %	15.21%	27.65%

LEAVE

Public Holidays

There are 8 public holidays in the Netherlands.

Paid Time Off

Full-time employees in the Netherlands are legally entitled to a minimum of 20 days (four weeks) of paid holiday leave per year. This is Paid Time Off based on a calculation of four times the number of hours worked per week. Many companies offer more than the minimum number of days, with 24 and even 32 days of annual leave.

Sick Leave

The minimum sick leave entitlement is a payment of 70% of their most recent wage level, up to a maximum period of two years. This is a generous benefit and does reflect the Netherlands social policy. Some employers will even pay 100% of the wages.

Maternity Leave

Maternity leave is 4-6 weeks pregnancy leave (before the due date) and at least 10 weeks maternity leave (after childbirth).

If an employee takes less than 6 weeks pregnancy leave before the birth, she is entitled to add the remaining amount (up to 2 weeks) to her maternity leave after the birth.

If the baby is born later than the due date, the employee’s maternity leave begins after the actual birth and the total may therefore be longer than 16 weeks.

Employers can apply for a maternity allowance on behalf of their employee to the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).

Paternity Leave

If the partner of an employee gives birth, the employee has a right to 1 week of paternity leave following the birth. Paternity leave is the

number of working hours in one week. This paid leave can be taken any time in the first 4 weeks after the birth of the child. During this period of leave the employer must continue to pay 100% of the employee’s salary.

As of 1 July 2020, employees will also be entitled to 5 weeks unpaid leave in the first 6 months after the birth. Employees who take unpaid leave will be able to claim benefits from the Employment Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) for up to 70% of their salary.

Parental Leave

Parents of children up to the age of eight are entitled to parental leave in order to be able to spend more time with their children. Parental leave is generally unpaid, however, some employers may partially cover some of the salary. Each parent may take off 26 times their weekly working hours.

Other Leave

Adoption leave: 6 weeks: Employers can apply for an adoption leave allowance on behalf of their employee to the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).

Emergency leave and other short absence leave: intended for unforeseen personal circumstances for which an employee has to take time off immediately, for instance, when making arrangements for the care of a sick family member or in the event of a death in the family. You must always grant a reasonable request for emergency leave.

During this period of leave, employee is required to continue paying the employee’s salary.

Short-term care leave: Maximum of 2 x the working hours of an employee in 12 months: During the period of leave, employer continues to pay 70% of the employee’s salary. If this is less than the minimum wage, they you pay the minimum wage.

Long-term care leave: Maximum of 6 x the working hours of an employee in 12 months: During this period of leave, employer does not have to continue paying the employee’s salary.

TERMINATION

Probation Period

The duration of a trial period depends on the duration of the employment contract. However, it may not exceed 2 months. The same period applies to both employer and employee.

Maximum of 1 month:

Temporary employment contracts of more than 6 months, but less than 2
Temporary employment contracts without end
Maximum of 2 months:
Permanent employment

Temporary employment contracts of more than 2 years.

Termination Procedure

In the Netherlands, the employer has generally five ways to terminate the employment agreement:

Termination by mutual consent- by means of a settlement agreement
Termination proceedings before the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).
Termination proceedings before the cantonal court
Termination with consent of the employee

Urgent dismissal

Notice Period

The statutory notice period for an employee is 1 month.

Severance Payment

From the first day of employment, an employee is entitled to a severance payment (called a transition payment) in the event of dismissal at the initiative of the employer. The amount of the transition allowance for a Dutch employee is 1/3 monthly salary per entire year of service from the first working day.