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Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
Payroll in Netherlands
EOR in Netherlands
PEO in Netherlands

Netherlands map

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Mercans offers complete payroll, PEO and HR services in the Netherlands

One of Europe’s most open economies, the Netherlands offers excellent infrastructure, a strong treaty network and a highly educated workforce. It remains an attractive destination for international employers seeking compliant hiring, payroll and HR support.

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Doing Business in the Netherlands

The Netherlands is a well-connected gateway to Europe with a competitive international business climate. Foreign businesses benefit from a stable legal environment, advanced digital and transport infrastructure, and support from Dutch government and business institutions. The government also supports innovation and entrepreneurship through a range of tax incentives, grants and financing programmes.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in the Netherlands is relatively straightforward. Employers commonly operate through structures such as a private limited company (BV), public limited company (NV), branch office, partnership or representative setup, depending on their business needs.

Banking

Banks generally operate from Monday to Friday during normal business hours, although digital banking is widely used for day-to-day business transactions.

Working Week

The standard working week is commonly between 36 and 40 hours, usually worked from Monday to Friday.

Labor Law

The main sources of employment law are the Dutch Civil Code, labour regulations, collective labour law and collective labour agreements. European Union legislation also plays an important supplementary role.

Main Industries

Chemicals, trade, logistics, machinery, high-tech manufacturing, financial and business services

GDP Growth

1.4%

Dates & Numbers

dd-mm-yyyy

Official State Name

Kingdom of the Netherlands

Population

18.13 million

Capital

Amsterdam

Major Languages

Dutch

Currency

Euro

Internet Domain

.nl

International Dialing Code

+31

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Netherlands
Amsterdam, NL
10:12 am, May 13, 2026
12°C
scattered clouds
67 %
Wind Gust: 0 mph
Clouds: 40%
Sunrise: 5:48 am
Sunset: 9:25 pm

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Payroll in Netherlands

Our specialized Netherlands payroll services allow you to manage local payroll obligations and cross-border payroll operations efficiently, while also supporting your international workforce with competitive benefits. With 20+ years of experience, payroll expertise and smart payroll technology, we provide payroll support in the Netherlands and across the globe.

As a leader in payroll outsourcing, Mercans helps employers navigate Dutch payroll tax withholding, payslip requirements, holiday allowance, statutory leave and payroll reporting. Our payroll experts provide real-time support and local guidance to help you stay compliant as your payroll provider in the Netherlands.

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Payroll Services

Regulated by the Dutch Tax and Customs Administration, employers must process payroll correctly, withhold payroll tax where applicable, pay employees at least the statutory minimum hourly wage, and provide compliant payslips. Many employees are also covered by collective labour agreements at sector or company level. Companies managing payroll in the Netherlands should account for direct labour costs such as gross salary, holiday allowance, bonuses and commissions, as well as indirect labour costs such as pension, insurance, travel, equipment and other employment benefits.

Online payslips are permitted if the employee agrees and can store them

Payslip

Payroll and business records must generally be kept for at least seven years

Reports

At least 4 times the weekly working hours per year, typically 20 days for a full-time 5-day week

Annual Leave

Up to 2 years, with at least 70% of wages continued during illness

Sick Leave

At least 16 weeks of paid maternity leave and 1 week of partner leave, plus up to 5 weeks of additional partner leave

Maternity & Paternity Leave

At least 1 month statutory notice, depending on length of service and contract terms

Employee Termination

A 13th month is not mandatory by law, but is common where agreed in a contract or CAO and is often paid in December

13th Salary

€14.71 per hour for employees aged 21 and over from 1 January 2026

Minimum Wage

Maximum 12 hours per shift and 60 hours per week, subject to statutory averaging rules

Overtime

Transition payment generally applies from day one of employment and is based on salary and length of service

Severance Pay

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Professional Employer Organization (PEO) in Netherlands

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Mercans’ Netherlands PEO services offer a legally compliant employment solution for companies seeking to hire staff without establishing a local legal entity. We manage onboarding support, payroll, HR administration and employment compliance on your behalf, helping you expand your workforce with confidence using localized contracts and strong operational controls.

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As a PEO outsourcing provider in the Netherlands, our services help your company recruit and onboard employees without the burden of local business setup. Through our Global Employer of Record solutions, you can hire through local entities while we support payroll, tax administration, benefits coordination and ongoing compliance.

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Our integrated platform features automated workflows, digital signatures, payroll management, contractor payouts and compliance support for smoother operations. Mercans is a reliable provider of PEO services in the Netherlands and globally. Explore the hiring, employment, payroll and benefits requirements for workers in the Netherlands and see how our local HR specialists can support your international expansion.

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PEO Netherlands

Mercans is a prominent company offering Professional Employer Organization (PEO) services in the Netherlands, providing businesses with a comprehensive range of solutions to meet their employment needs. Our services allow companies to focus on their core business operations while we handle the HR, payroll and compliance aspects of employment.

With our PEO in Netherlands, we help your business operate smoothly by managing the complexities of Dutch employment laws, payroll administration, tax obligations and workforce compliance. Let Mercans PEO Services be your partner in navigating the Dutch labour market.

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Tax and Social Security

Businesses in the Netherlands deal with several tax and payroll withholding obligations. Employers generally withhold wage tax and national insurance contributions from employee pay where applicable, and also account for employee insurance contributions and the income-related healthcare insurance system. The Netherlands also maintains an extensive tax treaty network to help reduce double taxation risks for international businesses.

Tax

Employers must withhold wage tax from salaries and process payroll tax correctly. Depending on the employer and employee profile, payroll may also include national insurance components and employee insurance contributions. Corporate income tax and VAT also apply to many business activities in the Netherlands.

25.8%

Corporate Income Tax

49.5%

Personal Income Tax

21%

Sales Tax

21%

VAT

Social Security

Employers in the Netherlands generally deal with employee insurance contributions such as unemployment and disability-related schemes, as well as the income-related healthcare insurance system. Contribution levels vary by scheme and employer profile, and Dutch payroll rules also interact with the state pension system and occupational pension arrangements where applicable.

Variable

Social Security Rate

≤ 7.74%

AWf Employer Rate

≤ 7.63%

Aof Employer Rate

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Employment Law

Anyone who works in the Netherlands is entitled to at least the Dutch statutory minimum hourly wage and holiday allowance. This applies broadly to local employees, temporary workers and many foreign workers employed in the country.

Employment Agreement

The employment contract or written statement must set out key employment terms, including salary, working hours, whether a collective labour agreement applies, and other essential conditions of employment. Dutch law recognises both fixed-term and permanent employment contracts.

Working condition

Employees aged 21 and over are entitled to the statutory minimum hourly wage. Employers must also comply with holiday entitlement, holiday allowance and working time rules. The number of statutory holiday hours is at least four times the employee’s weekly working hours each year.

Leaves

Dutch law provides for a range of leave entitlements, including pregnancy and maternity leave, partner leave, parental leave, adoption and foster leave, short-term and long-term care leave, and emergency leave. Additional or special leave may also be set by a CAO or employment contract.

Employment termination

An employee can only be dismissed if there is a valid legal ground and the correct dismissal procedure is followed. Depending on the case, employer approval from UWV, court involvement or a settlement agreement may be required. Notice periods and transition payment obligations must also be considered.

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1 month

Minimum statutory notice period for terminating an employee

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10

Total number of official public holidays in 2026

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36-40

Working hours per week

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Up to 5 days

Bereavement leave for employees in eligible statutory situations

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Immigration

In general, non-EU, non-EEA and non-Swiss nationals who want to work in the Netherlands for more than 90 days will require the appropriate Dutch residence and work authorization. In many cases this is the single permit for residence and work, known as the GVVA, although different work routes may apply depending on the assignment and worker category.

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Residency Permit

EU, EEA and Swiss nationals can generally live and work in the Netherlands without a Dutch residence permit. A valid passport or ID card is usually sufficient.

Entrepreneurs and other non-EU nationals planning a longer stay commonly need to apply for a residence route that matches their purpose of stay. For paid employment, many foreign nationals will need a residence permit with work authorization or a GVVA single permit, depending on the circumstances and applicable immigration category.

Work Permit validity

Often up to 1 year initially, depending on permit type and employment circumstances

Required Documents

Valid passport

Completed application and supporting residence documents

Employment or assignment documentation from the sponsoring employer

Proof the Dutch immigration route requirements are met

Evidence of legal stay where applicable

Additional corporate, financial or registration documents depending on the permit category

Compliant, reliable, error-free and touchless payroll in Netherlands

Build the best team and hire top talent compliantly in Netherlands. Get in touch with Netherlands payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in the Netherlands and how does it work for foreign companies?

    An Employer of Record in the Netherlands acts as the legal employer for your local workforce. With services provided by Mercans your company can hire staff in the Netherlands while Mercans handles employment contracts, payroll, taxes, social security, and all labour-law compliance. This enables foreign businesses to engage employees in the Netherlands without setting up their own Dutch entity.

    Why should businesses use an EOR instead of establishing a legal entity in the Netherlands?

    Using an EOR provided by Mercans removes the need for local company registration in the Netherlands. It saves on the time and cost involved in entity formation, ensures compliance with Dutch employment and tax regulations from day one, and allows your business to focus on growth rather than administrative setup.

    How does payroll outsourcing in the Netherlands ensure compliance with tax and labor laws?

    Payroll outsourcing with Mercans in the Netherlands means that salary payments, wage tax withholding, social insurance contributions and statutory filings are processed in full accordance with Dutch law. Mercans aligns its payroll operations with collective labour agreements, minimum wage rules and working time regulations so companies avoid compliance risk.

    Can an Employer of Record in the Netherlands hire employees and manage work permits for international companies?

    Yes. Mercans as your EOR in the Netherlands can hire employees on behalf of your organisation and coordinate visa, residence and work permit requirements for non-EU/EEA nationals. This enables global companies to operate in the Netherlands with both local and expatriate staff without establishing a local legal entity.

    What are the main benefits of using EOR and payroll services in the Netherlands for global expansion?

    By partnering with Mercans you gain rapid access to the Dutch talent market without entity setup, full compliance with Dutch employment, tax and social security regulations, reduced legal and operational risk, dedicated local HR and payroll expertise, and scalable workforce solutions that support your global expansion strategy.

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