Explore our EOR&PEO services in NETHERLANDS

As your EOR in Netherlands, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.


Your candidate is hired by a PEO in Netherlands provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.

Acvian as Netherlands EOR
Netherlands Business Expansion Acvian

Country Overview

The Netherlands is a small country with a population of approximately 17.3 million people. The capital city is Amsterdam, which is known for its picturesque canals and rich cultural history. The official language is Dutch, but English is widely spoken and is the primary language of business.


Country has a strong and diverse economy, with a GDP of approximately $1.2 trillion. The main industries include agriculture, trade, and technology. The Netherlands is a major exporter of flowers, vegetables, and cheese, and is also home to a number of international companies in the tech sector.

General Information

  • Population: ~17.500.000


  • Capital City: Amsterdam (population: ~1.500.000)


  • GDP: ~$1.2 trillions


  • GDP per capita: ~$68.526
  • Currency: Euro (EUR)


  • Unemployment: ~3.5%


  • Employer Taxes: 13.5 – 25.7%


  • Employee Taxes: 37% – 49%


Employment Contracts in Netherlands

The company offers both fixed-term and indefinite employment contracts. An employee may be given a maximum of three fixed-term contracts before the contract becomes indefinite. After 36 months or the fourth fixed-term contract, the contract will automatically convert to an indefinite employment contract.

Probation Period in Netherlands

A probationary period of up to one month is applied for fixed-term contracts, and up to two months for permanent contracts.


Vacation allowance is calculated at a rate of at least 8% of the employee’s total gross annual salary for the period from June 1 to May 31. Additional payments or benefits, such as profit sharing, bonuses, and year-end bonuses, do not count towards vacation allowance.


Employees who earn at least three times the legal minimum wage may agree in writing to receive no or reduced vacation pay.

Working Hours in Netherlands

Employers in the Netherlands are required to follow the Working Hours Act of 1995, which stipulates that the maximum length of a shift is 12 hours per day and 60 hours per week. The regular workweek in the Netherlands is 40 hours, but it can be increased to 48 hours if these hours become the standard working hours.

Vacation Days in Netherlands

In the Netherlands, the minimum number of vacation days that an employee is entitled to is 20 days, although many employers offer 25 days. If an employee has colleagues working in the Netherlands, they should receive similar treatment in terms of vacation days.


Vacation days are calculated based on an employee’s weekly working hours. The number of “statutory vacation days” is equal to four times the number of contractual weekly working hours. For example, an employee who works a 40-hour workweek would be entitled to 160 hours of vacation leave, or 20 vacation days.


Employees may be entitled to additional “statutory vacation days” based on their employment contract.


Vacation days accrue on an annual basis from January 1st to December 31st. Unused statutory vacation days may be carried over to the following year, but will expire after six months from the end of the accrual year. Statutory vacation days may only be paid out in money at the end of employment if there is no longer an opportunity to take the remaining days.

Sick Leave in Netherlands

If an employee is absent from work due to organ donation, pregnancy, or childbirth, the employer is required to pay 100% of their normal wages.


For other illnesses, the employer is obligated to continue paying at least 70% of the employee’s last gross salary for the first two years of illness. This payment may not be less than the legal minimum wage.


In the case of a fixed-term employment contract, the 70% payment is limited to the end date of the contract. For open-ended contracts, the 70% payment ends after a maximum of two years, after which the employee may receive an incapacity benefit from the government depending on their level of work-related incapacity.


If an employee has a long-term illness, both the employer and employee are legally required to cooperate in the reintegration process and to involve a medical officer.

Wages and Salary Payment in Netherlands

Employers in the Netherlands are required to pay their employees at least the minimum wage, which is a fixed monthly rate that is increased annually (currently set at 1756.25 euro gross per month for those aged 21 and over). Employers must also pay a holiday allowance of 8% of an employee’s gross annual salary. This allowance is paid to the employee in 12 equal installments, along with their annual salary, before the start of each new month.

Public Holidays in Netherlands

In the Netherlands, employees are entitled to 10 public holidays each year. These holidays are:


  • New Year’s Day: January 1st
  • Good Friday: movable holiday
  • Easter Sunday and Easter Monday: movable holidays
  • King’s Day: April 27th
  • Liberation Day: May 5th
  • Ascension Day: May 26th
  • Whit Sunday: June 5th
  • Whit Monday: June 6th
  • Christmas Day: December 25th
  • Boxing Day: December 26th

Employer Taxes in Netherlands

The employer pays social security contributions for insurance, including unemployment insurance (2.94% or 7.94% based on contract length), occupational disability insurance (8.55%), and childcare allowance (5%). These contributions are capped at an annual salary of EUR 55,927. The employer also pays medical insurance contributions, which are 6.7% of income and capped annually at an employee salary of EUR 57,232.

Employee Taxes in Netherlands

Individual’s taxable income is calculated based on income from three sources: employment, home ownership, and periodic receipts and payments. It also includes benefits related to income provisions.


Box 1 of the taxable income calculation includes income from employment and home ownership. For individuals who have reached the statutory retirement age, a reduced tax rate applies to incomes up to €35,473 (9.42% for 2022).


For income ranges from €0 to €69,397, the applicable tax rate is 37.07%. For income over €69,398, the tax rate is 49.50%. These tax rates include social security premiums, which are primarily levied in the first bracket.


In the Netherlands, the employee is required to pay medical insurance contributions of EUR 1509 per year.

Notice Period in Netherlands

The notice period for an employer is based on the length of the employment contract, with a maximum of 4 months. For employees, the notice period is as follows:


  • Less than 5 years of service: 1 month
  • Between 5 and 10 years of service: 2 months
  • Between 10 and 15 years of service: 3 months
  • 15 years or more of service: 4 months 


The statutory notice period for an employee is 1 month.

Termination / Severance in Netherlands

Employees are entitled to a statutory severance payment (also known as a “transition allowance”) upon termination. This applies from the first day of employment (including termination during the probationary period) and if the termination or non-renewal of a contract (including after sickness or the expiration of a fixed-term contract) is initiated by the employer. The transition allowance is equal to 1/3 of a gross monthly salary for each year of service. As of January 1, 2021, the maximum transition allowance is 84,000 euros gross or the employee’s gross annual salary, whichever is higher. The gross monthly salary includes an 8% statutory holiday allowance, a year-end allowance (13th month), structural allowances, and bonuses.


Employment can only be terminated in one of the following ways:


  • By mutual agreement and execution of a settlement agreement
  • By obtaining a dismissal permit from the Social Security office (UVW)
  • Through dissolution of the contract at the court

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