Quick facts

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The Netherlands has a highly developed economy with strengths in trade, technology, and finance. As a member of the European Union, the country offers a favorable business environment, making it attractive for international companies and skilled professionals. Dutch labor laws provide comprehensive protections, including regulated working hours, social security, and strong employment rights.

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Employment Contracts

In the Netherlands, both fixed-term and indefinite contracts are allowed. An employee can be offered up to three fixed-term contracts or a total duration of 36 months before the contract automatically converts to an indefinite term.

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Probation Period

For fixed-term contracts, the probation period is 1 month. For indefinite contracts, the probation can extend up to 2 months.

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Working Hours

The Working Hours Act allows a maximum of 12 hours per shift and 60 hours per week, though standard hours are 40 hours weekly. Work hours may increase to 48 hours per week as long as it is set as the regular schedule.

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Vacation Days

Employees are entitled to at least 20 vacation days per year, though many employers offer 25 days. Vacation days accrue from January 1 to December 31, and unused statutory days expire 6 months after the accrual year ends. A vacation allowance of 8% of gross annual salary is typically paid in May.

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Sick Leave

Employers must pay 70% of an employee's salary during the first two years of illness, provided the payment is no less than the minimum wage. Both the employer and employee must work towards reintegration, with mandatory support from a medical officer for long-term sickness.

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Wages and Salary Payment

Employees are paid in 12 monthly installments, with a vacation allowance of 8% of gross annual salary added in May. In 2024, the minimum wage was €2134 per month for employees aged 21 and over.

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Public Holidays

There are 10 national public holidays in the Netherlands, including:

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• January 1: New Year’s Day
• April 27: King’s Day
• May 5: Liberation Day (every five years)
• December 25-26: Christmas

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Employer Taxes

Employers contribute to social security at the following rates:

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• Unemployment insurance: 2.94% for indefinite contracts, 7.94% for temporary contracts
• Disability insurance: 8.55%
• Childcare allowance: 5%Medical insurance contributions are 6.7% on income up to an annual cap of €57,232.

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Employee Taxes

Employee tax rates are progressive:

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• 37.07% on income up to €69,397
• 49.5% on income above €69,397‍
• Medical insurance contributions cost approximately €1,509 annually for the employee.

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Notice Period

The notice period for employers varies by service length:

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• Less than 5 years: 1 month
• 5-10 years: 2 months
• 10-15 years: 3 months
• 15 years or more: 4 months

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Employees are required to provide 1 month’s notice.

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Termination and Severance Pay

Termination is possible via:

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1. Mutual agreement and a settlement.
2. Dismissal permit from the Social Security office (UWV).
3. Court dissolution of the contract.

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Employees dismissed after the probation period are entitled to a transition allowance of 1/3 of a month’s salary for each year of service, capped at €84,000 or one year’s salary if higher.