How To Hire Employees In The Netherlands?

The Netherlands invites global employers to benefit from its open trade policies. The country is home to some of the fastest-growing industries like IT and Technology, Creative Media, Chemicals, Energy, Food, Logistics, Water & Maritime. 

This guide elaborates on how to hire employees in the Netherlands and shall benefit employers with a vision to capture global economic opportunity. Any employer considering hiring in the Netherlands can navigate through this guide to understand the recruitment process in the Netherlands.

Things to Know Before Hiring in the Netherlands

Before hiring employees in the Netherlands, employers must gather a general awareness of the local workforce and the employment regulations. 

These factors can enhance the employer outlook on recruitment and selection in the Netherlands.

  • ~Free movement of workers in the EU
  • ~~Hiring staff in the Netherlands is easy since the European Union (EU) allows free movement of human capital across EU countries without work permits and Dutch employment contracts.
  • ~~Conducting business during an economic recession is convenient in the Netherlands. It is evident from the latest pandemic measures to extend financial support to enterprises and employers. 
  • ~The labor market in the Netherlands
  • ~~Hiring Netherlands workers involves high percentages of flexible and permanent contracts as the Dutch labor market often lacks dynamism.
  • ~~Labor market dynamics is an indicator of stability and refers to changes in the job market. 
  • ~~The presence of unions at the company level is weak
  • ~~Strike levels remain low by international standards
  • ~~However, collective bargaining remains high, especially concerning working hours.  
  • ~Wide pool of diverse talent
  • ~~The Netherlands is a gateway to Europe as many choose to relocate and work for international companies. 
  • ~~International students who come to the Netherlands for an academic degree can enter the country’s talent pool. 
  • ~Language of the workforce in the Netherlands
  • ~~The Dutch workforce is highly educated and multilingual
  • ~~Almost 90% of Dutch nationals are fluent in English for business communications. German and French are also widely spoken in the Netherlands.
  • ~Quality of life in the Dutch society
  • ~~The European Quality of Life Survey (EQLS) finds that life satisfaction and happiness levels in the Netherlands are stable.
  • ~~The frequency of work-life balance problems is low in the Netherlands
  • ~~More workers involve themselves in unpaid volunteering work at least once a month.

The Cost of Hiring an Employee in the Netherlands

The average hourly cost of hiring people in the Netherlands is similar to other competitive European markets. For instance, employees working 35 hours or more in the Netherlands received the highest hourly wage of nearly 25.9 euros per hour in 2020. In 2021, the average hourly wage stood at 24.42 euros, with employees earning a maximum hourly wage (38 euros/hour) in the mining sector.

In addition to this, there is an indirect cost involved in hiring an employee in the Netherlands. Here is a brief outline of it: 

  • ~Business Registration
  • ~~Employers must register with the Netherlands Chamber of Commerce (Kamer van Koophandel, or KVK) to hire people in the Netherlands. 
  • ~~Registration and compliance fees may vary depending on the type of legal structure of the business - a sole proprietorship, a private limited company, a commercial partnership, a public partnership, or even a cooperative. 
  • ~Minimum wage & holiday allowance
  • ~~Employers must match the statutory minimum wage and the statutory holiday allowance when hiring employees in the Netherlands. It also applies to temporary workers, flex workers, and foreign personnel.
  • ~~The minimum wage in the Netherlands is revised every six months on 1 January and 1 July. On January 01, 2022, the gross amount for minimum wage for full-time employees 21 years of age and older in the Netherlands was adjusted to €1725.00 per month.
  • ~Drawing risk inventory & evaluation
  • ~~Employers must conduct a risk assessment and evaluation (RI&E) to ensure workplace safety. It states the risk faced by employees and the measures employers plan to take (Plan Van Aanpak) to address these risks. 
  • ~~For companies with more than 25 employees, RI&E must be under the supervision of a designated health and safety officer. 
  • ~Payroll tax liability
  • ~~Employers must deduct social insurance premiums for employees who work permanently in the Netherlands. 
  • ~~Other payroll tax liabilities include wage tax (wage withholding tax) and an income-dependent health care insurance contribution. 
  • ~Work council
  • ~~The works council promotes and protects the interests of employees. The employer bears all related costs. 
  • ~~Employers are obligated by the Works Councils Act to establish a Works Council in the company depending upon the number of employers hired. 
  • ~~Companies with employees up to 10 may set up a Works Council voluntarily. If the employer has 11 to 49 employees, they can create a work council at the request of the majority of employees. Companies with more than 50 employees must set up a work council or hold regular staff meetings.  
  • ~Working conditions for employees
  • ~~The Netherlands Labor Authority regularly supervises the working conditions for a safe and healthy workplace.
  • ~~Employers in the Netherlands must prevent any physical and psychological strain (stress) in the workplace. 
  • ~~Under the Working Conditions Act, employers must regularly offer occupational health medical examinations (periodiek arbeidsgezondheidskundig onderzoek, PAGO). 

What Does a Company Need to Hire Employees in the Netherlands?

Employers in the Netherlands are free to employ permanent or temporary staff. 

To hire new employees in the Netherlands, global employers must establish their company presence and meet certain obligations as a Dutch employer. Once a Dutch subsidiary is formed, it can start advertising for job positions in the local labor market. 

A Dutch subsidiary can even hire temporary staff through an agency or secondment supplier. Engaging with an SNA-certified company will reduce the risk of claims from the Dutch Tax and Customs Administration if any case of default.

Various options for Hiring Employees in the Netherlands

To hire suitable employees for the company, employers must engage and expand their HR team. 

Global employers can also hire staff without establishing an entity in the Netherlands. There are valuable solutions like an Employer of Record (EOR) that can act as a primary employer on paper, eliminating the need to establish a subsidiary in the Netherlands for hiring purposes. 

In simple terms, an EOR acts as the official employer in the Netherlands on the company’s behalf. All legal compliance like the employment relationship, managing HR tasks like onboarding, payroll, or even termination becomes the responsibility of an EOR. 

The Steps to Hiring in the Netherlands

  • ~Register as an employer
  • ~~Employers must register a suitable business structure with the Dutch Tax and Customs Administration (Belastingdienst). 
  • ~~Employers must obtain all necessary forms to meet payroll tax obligations.
  • ~Scout for talent
  • ~~Employers must inform the Netherlands Chamber of Commerce that they are hiring staff.
  • ~~Advertising online is a popular strategy to attract remote employees, among other hiring processes in the Netherlands. Employers can directly post relevant job ads or engage a hiring agency depending on the industry and location for hiring employees in the Netherlands. 
  • ~~They can post relevant job posts on top job search sites like Linkedin, Indeed, Monsterboard, and De Nationale Vacaturebank.
  • ~~Even a sole proprietor or single-person business (eenmanszaak) can hire employees in the Netherlands. 
  • ~Screen prospective candidates
  • ~~Most employers trust the data-driven employee screening of candidates selected to hold integrity-sensitive job positions. 
  • ~~They must conduct background checks when hiring staff in the Netherlands, including interim personnel, self-employed professionals, temporary staff, interns, and volunteers.
  • ~Register the identity of employees
  • ~~Employers must keep a record of the identity documents of all newly recruited employees - any Dutch or foreign employees and interns.
  • ~~Hiring staff in the Netherlands in sectors like healthcare and hospitality may require additional verification in the medical records or visitor register.
  • ~~Verifying and recording the identity of the contracted employee is a must for at least five years after the working relations are terminated.  
  • ~~A driving license is not valid ID proof since it offers no indication of nationality and residence status. 
  • ~Enter into a contract of employment
  • ~~Employers have flexible options to enter into a contract of employment when recruiting and selecting in the Netherlands. 
  • ~~Employers can hire on-call workers with zero hours with min-max contracts. 
  • ~~To hire permanent employees in the Netherlands, employers must specify the employee’s salary and deductions, indicate the Collective Labour Agreement, outline working hours, and an employee pension scheme. 

With the employee recruitment and selection in the Netherlands, employers must also verify if an employee has opted for health insurance. Employers can apply for their work permit if they hire an expat only for three months. However, a single permit (combination of work and residence permit) is required if an ex-pat is recruited for more than three months.  

Let Multiplier be Your EOR Platform in the Netherlands

Eliminate all the hassles of complying with Dutch employment and tax laws to recruit employees in the Netherlands with Multiplier

Multiplier offers a convenient SaaS-based EOR solution to employ suitable talent in the Netherlands without the need to form a Dutch subsidiary. Our integrated services ensure seamless employee onboarding, automated payroll, and contingent workforce management in the Netherlands. 

Global employers can benefit from Multiplier’s EOR & PEO solutions in testing new markets and setting up teams at a fraction of the cost in over 150 countries. 

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Frequently Asked Questions

What are the regulations for trade union recognition?

The Dutch Constitution guarantees the right to freedom of association and assembly. The right to form a trade union and the right to conclude collective bargaining agreements is laid down in the International Labour Organization (ILO), which also applies to the Netherlands. 

However, the overall presence of unions at the company level is weak, and strikes remain low by international standards. Global employers need not worry about employee unions hampering their business opportunities in the Netherlands.

Does an employer have any additional obligations if they dismiss several employees simultaneously?

The Collective Redundancy Notification Act comes into play in the event of mass terminations (at least 20 employees within one month). When the employer does not act per the prescribed rules, the termination agreement may stand void. 

How does a PEO help global employers in the Netherlands?

Global employers willing to tap into the diverse talent pool of the Netherlands labor market can engage the services of a Professional Employment Organization (PEO).

A PEO will be legally responsible for managing payroll, HR management, and even terminations on behalf of the global employer. Thus, employers can manage international teams and their payroll without setting up a physical business entity in the Netherlands.

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