Payroll in The Netherlands

Thinking about hiring in The Netherlands? To stay compliant and keep things running smoothly, you’ll need to understand the local rules around HR, payroll, social security, and taxes. Discover the key information laid out for you below.

HR and labor laws in The Netherlands

When you’re hiring in The Netherlands, it’s crucial to understand local labor laws. From contracts and working hours to leave entitlements and dismissal procedures, here’s what you should know about specific laws in The Netherlands.

Employment contracts

Employers are required to provide a written employment agreement outlining key terms, such as job duties, salary, hours, and working conditions. Rules also cover probation periods, notice requirements, and procedures for lawful termination.

Working hours act

The standard full-time workweek in The Netherlands is around 36 to 40 hours. The law sets limits on maximum working hours and ensures employees receive adequate breaks and rest periods to promote work-life balance.

Minimum wage

The Dutch government sets a legal minimum wage, which is reviewed and adjusted twice a year: in January and July. Rates may vary based on age and work experience.

Social security in The Netherlands

The social security system in The Netherlands acts as a safety net for your employees, offering protection in key moments throughout their careers and lives. It’s designed to provide financial support during live events like illness, maternity, unemployment or retirement. Discover how the social security system works in The Netherlands:

AOW (General Old Age Pensions Act)

Provides a basic state pension for residents of the Netherlands upon reaching retirement age.

WW (Unemployment Insurance Act)

Provides financial support for employees who become unemployed.

WIA (Work and Income According to Labor Capacity Act)

Offers benefits for employees who are unable to work long-term due to illness or disability.

Workplace protections

Creating a fair and safe workplace matters. These laws help protect your employees in The Netherlands:

Equal treatment act

This legislation protects employees from discrimination based on gender, race, age, religion, disability, and other protected characteristics: in hiring, promotions, and day-to-day operations.

Work and care act

Employees are entitled to various types of leave, including parental leave, emergency leave, short-term caregiving leave, and more. Allowing them to balance work with personal obligations.

Tax regulations in The Netherlands

Taxes canbe tricky. Understanding how the system works in The Netherlands, helps you avoid surprises and stay compliant. Here are some tax basics to keep in mind:

Income tax

Employees pay income tax on their earnings and on certain assets like home ownership. The system is progressive, with higher rates applied to higher income brackets

Corporate tax

Businesses are taxed on their profits. The exact rate depends on the size of the company and the amount of taxable income.

Value-added tax (VAT)

The standard VAT rate is 21%, with reduced rates for specific goods and services. Businesses are required to register for VAT, charge it on sales, and file regular VAT returns.

Paybix helps you managing your payroll in The Netherlands

Running global payroll takes local knowhow. With Paybix, you’ll get expert support, tailored to each country your business in situated in. Thanks to our unified and digital platform, you gather clear insight in labor costs and cross-country payroll. You benefit from a 30% more efficient payroll process, including global reporting and core HR data management. Hassle-free, user-friendly and easy integrated with local payroll providers.

To ensurefull compliance with the latest regulations, Paybix consults with local legal partners and payroll providers. Get in touch with our experts. We provide you with accurate and up-to-date information.

Ready to optimize your payroll processes? Contact us. Book your free and personalised demo. Discover our data-driven solutions for your business success.

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