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How to hire remote employees in
So you want to hire in The Netherlands. That’s great. But you should know that hiring in The Netherlands is different from hiring in your home country. There’s a whole laundry list of labor laws to catch up on, lawyers to contract, compliance issues to navigate… And it can get complex. So we’ll break it down in simple terms.
If you want to successfully hire in
The Netherlands
, you have two options:
Laws about hiring contractors are significantly more simple in
The Netherlands
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Thera for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
The Netherlands
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
The Netherlands
.
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
The Netherlands
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
The Netherlands
, you can pay them with Thera in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in The Netherlands than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in The Netherlands.
PTO is calculated by the length of employment:
Full-time employees (40 hours per week) in the Netherlands are legally entitled to a minimum of 20 days (four weeks) of paid holiday leave per year. This is 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 being fairly common.
Employers are obligated to provide a holiday bonus of at least 8% of the employee’s gross salary. The bonus is usually paid in May or June.
The Netherlands have 8 official public holidays.
Sick leave pay varies based on the length of service:
The minimum sick leave entitlement in the Netherlands 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.
Expecting mothers are entitled to 4-6 weeks leave before birth, and 10 weeks of leave after birth.
If an employee takes less than 6 weeks of 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 employees to the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).
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 of unpaid leave in the first 6 months after 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.
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.
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, the 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, the employer continues to pay 70% of the employee’s salary. If this is less than the minimum wage, they pay the minimum wage.
None.
None.
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 the consent of the employee;
Urgent dismissal.
The length of the notice period for an employer depends on the duration of the employment contract, with a maximum of 4 months.
Less than 5 years: 1 month
Between 5 and 10 years: 2 months
Between 10 and 15 years: 3 months
15 years or more: 4 months
The statutory notice period for an employee is 1 month.
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.
The duration of a trial period depends on the duration of the employment contract. However, it may never exceed a 2 month period. 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 years.
Temporary employment contracts without an end date. Maximum of 2 months.
Permanent employment contracts.
The majority of full time (voltijd) jobs in the Netherlands are between 36-40 hours a week, or seven to eight hours a day, five days a week.
Dutch law does not provide a national standard for overtime; it is usually agreed upon by individual employment contracts and collective agreements.
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