Employer Of Record Netherlands
Infotree Global Solutions provides employer of record solutions to companies who want to set up payroll and hire employees in the Netherlands without setting up a subsidiary or branch office. For companies who wish to expand business overseas, we help them manage legal formalities without hassles. By hiring our Employer of Record in the Netherlands, you can be assured of staying compliant with the local regulations. Our in-country experts are designated with all the associated tasks to compliantly hire and onboard your employees. Using our professional support and network, you sail through the associated challenges including retaining employees, overseeing payroll, laws compliance, and risk mitigation.
Expanding business or recruiting in the Netherlands- Here are the requirements in detail to help you learn about the different concerns related to hiring in the Netherlands.
Table of Contents
• Hiring In Netherlands
• Employment Compliance
• Employee Entitlements
• Challenges When Expanding Into Netherlands
• Payroll In Netherlands
• Payroll & Tax In Netherlands
• Benefits of Netherland Hiring Outsourcing
• Why Infotree Global Solutions?
Hiring In Netherlands
Employment law in the country is not enclosed under a single law. Rather, it is governed by statutory norms codified in the Dutch Civil Code. It is further governed by a Collective Labor Agreement which includes internal rules and the employment contract. Dutch is the primary language here. Due to its robust digital infrastructure, the country has become a prime location for businesses looking for international expansion. Dutch workers are known for leading other nations when it comes to business skills and tech knowledge. It is a land of opportunity for investors and businessmen, it has legal complexities to be taken care of and the best way to deal with it is to hire the Netherlands employer of record.
Dutch employment law is a little complex especially when it comes to dismissal laws. In 2015, an act called the Work and Security Act was passed that modified the Dutch dismissal and unemployment laws. The legislative changes in the act recommended a change to pre-decided procedures for termination based on the grounds for dismissal which nullified the earlier system where the employer was free to select between various types of procedure like enhanced income protection for workers on flexible contracts, the decreased of disparity between fixed-term and permanent employees, the explanation of dismissal laws and growing incentives for unemployed people to find re-employment.
Thus, the act has become more complex and demanding and as a result, employers have started concentrating more on flexible professional relationships whose termination is authorized by law to prevent hard dismissal procedures with unexpected results. That is not what the authorities had planned and as a result, few modifications have been introduced to the recommended Balanced Labor Market Act. To promote compliance, employers are obligated to specify all factors on payslips that make up the wage-encompassing expense allowances. It is better to rely on the expertise of an employer of record Netherlands to learn about the more specific details.
The national minimum wage in the Netherlands is updated twice a year. As of January 2023, the minimum wage in the Netherlands is €1,934.40 gross monthly (€23,212.80 per year) for people aged 21 or over. There are lower minimum wage levels for those aged 15-21. The national minimum wage changes take place twice annually first in January and again in July to reflect mutually consented upon wage averages. Agreements extending beyond six months may also encompass probation periods of up to two months, but no longer than that. People working in the Netherlands are eligible for both contractual and discretionary bonuses.
By hiring an Employer of record in Netherland, you can be assured of following all the labor laws and payroll concerns. Employers must provide all contractual employees with termination notice if required. Dutch law recommends a statuary notice period of 1 month for workers, though individual agreements may reflect shorter or longer notice periods. In the case of employer dismissal without notice, it may lead him to extra compensation equivalent to the amount of potential employee income during the perceived notice period.
Challenges When Expanding into the Netherlands
Expanding to the Netherlands brings along a few concerns that you need to take care of. Choose your industry carefully and the kind of business you wish to start. It is vital to observe trade agreements that could strengthen with your move to the country. It can affect which of the 12 provinces you will select as your office headquarters. Despite having unified rules, a little variation can be witnessed based on a particular area. Dutch is considered the official natural language here. However, English is one of the languages used for official purposes. You may come across other regional languages like Frisian depending on your location. If you need to operate a business in such a province, you will require the assistance of a translator.
Be familiar with Netherlands subsidiary laws or use the guidance of the Netherlands employer of record. It is easy for EU nationals to transit between the country and other member states. When it comes to non-EU or EEA nationals, they will require an MVV or TWV. The country has some standardized occupations that demand a recognized qualification. Professionals in these roles will require this qualification before they join any company.
Payroll In Netherlands
Setting up payroll in the Netherlands requires you to be familiar with employment laws, including payroll. Besides ensuring that all employees get paid without delay, you must set up payroll as per the country’s laws. The Netherlands has a strong social security system with programs that encompass residents’ and workers’ insurance plans only for staff. It is the employers’ responsibility to mainly fund employees’ insurance programs, but employees can also contribute. These programs vary from sick benefits to particular acts like the Health Insurance Act. Employers should fund between 20% and 25% for such types of social security contributions.
It is a little hard to figure out tax for your workers because the country has 3 various types of income ‘categories’ that have independent tax rates. Depending on the employee’s earnings, income tax rates are progressive in the Netherlands, and using an employer of record Netherlands can actually help.
Payroll & Tax in the Netherlands
If you want to employ staff in the Netherlands then you are obliged to deduct payroll tax from your workers’ wages. Your employer of record in Netherlands takes care of the payroll tax which includes:
• Wage tax
• Social Security contributions
• Premiums for employer insurance
• Employer’s health care insurance contribution
Before you hire staff, you need to be registered as an employer with the Dutch Tax and Customs Administration. You may also be required to register if your organization has its registered branch in another country. After registration, you will get a payroll tax number and the forms you need.
The Netherlands follows a 30% ruling tax advantage for skilled migrants. Here employers are allowed to offer 30% of employees’ salary as tax-free, meaning that employee pays tax over 70% of their gross earnings. The tax rate lies between 37.35% to 49.50% based on employee earnings. Social Security contribution is levied together with income tax. The standard rate of VAT is 21%.
Benefits of Netherlands Employer of Record
To simplify your expansion process let Infotree Global assist you in dealing with all the complexities. Be it hiring employees distributing payroll or taking care of expenses, we are there to assist you at every step. Partner with us and start your global business without worries.
• Market Access
Relying on the professional expertise of an Employer of Record is the best way to enter an unknown market quickly. By using EOR services, an international organization can avail the expertise of the Netherlands employees to work for its company. Besides quick access to the Netherlands market, the EOR also enables the client to ease off worries related to payroll and HR.
• In Country Laws
It is hard to ignore the importance of regulations and compliance in a foreign country. If you are operating a business in the Netherlands, you need to be well aware of the payroll and taxation rules. With Netherlands Employer of Record services, a company can hire a foreign individual or local employees and deal with the complexities of the country’s rules. Be it income tax, social security contribution, expense management, withholding charges, or business tax, an EOR company takes care of it all with total compliance.
• Diverse Solutions
No matter whether you already have a company in an international location or you are going to establish one, an employer of record can help you significantly. The EOR Company can hire staff on your behalf without having the need to set up a branch in the Netherlands. If your firm is already operating, using EOR for managing payroll tasks can be a great idea as it can present an effective solution to tax and accounting responsibilities in the country.
Why Infotree Global Solutions?
Taking your business to an international market is indeed an exciting experience. But it brings along several concerns. That is why partnering with Infotree Global Solutions allows your company to expand in the Netherlands without worries. Our team of experts backs up all your needs and helps you onboard your international workers quickly. By using our services, you can easily manage risk mitigation, payroll, and tax formalities because that is all done by us. As your Employer of record in the Netherlands, we help you keep your business moving forward no matter when you have a short-term or long-term project in mind for the Netherlands. We assist you in directing the complexities of expansion by ensuring an expansion experience where you hire one or many employees using our brand name without setting up an office.
Using Infotree Global is the fastest way to deploy local and foreign employees in the Netherlands. Know more about outsourced employment through Infotree Global Solutions.
If you are all set to mark your presence in the Netherlands, get in touch with us today and learn more about our employer of record services.