Employer of Record (EOR) in Netherlands

Mercans offers seamless Employer of Record (EOR) solutions for businesses that have already identified their ideal candidates in the Netherlands. Our services encompass every aspect of the employee lifecycle, ensuring compliance with Dutch labor laws and regulations.

For those seeking assistance in talent acquisition, our EOR and recruitment services provide a holistic solution. We tap into our extensive network and expertise to help you find, onboard, and retain top talent, streamlining your expansion into the Dutch market.

Navigating the intricacies of expatriate employment is simplified through our visa sponsorship and global mobility services. We facilitate the relocation of your international workforce, ensuring compliance with Dutch immigration and employment laws.

Businesses grappling with contractor payments can leverage our Assistance on Record (AOR) services. We handle the complexities of contractor payments, guaranteeing accuracy and compliance.

Mercans supports the transition from independent contractors to permanent employees in the Netherlands. Our expertise ensures smooth conversions while adhering to legal requirements.

Integrate Mercans’ EOR services seamlessly with your HCM system in the Netherlands for real-time data exchange, enhanced compliance, and cost efficiency. Trust our expertise for a unified, compliant, and efficient approach, elevating your workforce management and payroll operations.

In the vibrant job market of the Netherlands, hiring and recruiting have never been more dynamic. Here’s a succinct overview of the top Dutch cities brimming with remote talent:

• Amsterdam: The Dutch capital, Amsterdam, is a hotspot for IT specialists, digital marketers, and finance professionals, with a growing demand for tech-savvy talents in areas like software development and data analysis.
• Rotterdam: Rotterdam seeks logistics and supply chain experts due to its strategic port, alongside professionals in engineering and sustainability roles, reflecting the city’s focus on innovative solutions.
• Utrecht: Utrecht has a burgeoning demand for healthcare and life sciences professionals, as well as a need for educators and researchers in its renowned universities.
• The Hague: The Hague’s international character drives the demand for multilingual professionals, particularly in diplomatic and legal roles. IT experts and consultants are also in high demand to support various organizations.
• EindhovenEindhoven’s thriving tech industry fuels the demand for engineers, especially those specializing in electronics and software development. Design and creative professionals also find ample opportunities in this innovation hub.

Mercans plays a pivotal role in connecting global companies with the right talent for these in-demand job roles across Dutch cities. Our Employer of Record (EOR) services simplify recruitment, management, and compliance, making the Netherlands an attractive destination for both businesses and professionals seeking growth and career opportunities.

Navigating the Dutch job market reveals specific roles that are in high demand. Here are the top jobs sought after in the Netherlands:

• Software Developers: With a flourishing tech industry, skilled software developers are highly sought after, particularly those with expertise in languages like Java, Python, and JavaScript.
• Digital Marketers: As businesses embrace digital transformation, the demand for digital marketing professionals, including SEO and SEM specialists, continues to surge.
• Data Analysts: Data-driven decision-making is crucial, making data analysts, data scientists, and AI specialists indispensable in various sectors.
• Healthcare Professionals: The pandemic has amplified the need for healthcare workers, including nurses, doctors, and healthcare managers.
• Logistics Experts: Due to the Netherlands’ strategic location as a European logistics hub, professionals in supply chain management, logistics, and transportation are in high demand.

Mercans plays a pivotal role in connecting global companies with these in-demand talents, simplifying recruitment, management, and compliance. We empower businesses to thrive in the Netherlands’ dynamic job market.

• Registration with the Chamber of Commerce: Companies intending to supply services, engage in sales, trading, or manufacturing in the Netherlands must register with the Chamber of Commerce. This is a mandatory step for establishing a legal business presence.
• Registration with the Dutch Tax Authorities as an Employer: Employers must register as a Dutch wage tax withholding agent with the Dutch tax authorities. This registration allows employers to calculate and remit wage tax and social security contributions on behalf of their employees.
• Registration with the Dutch Tax Authorities as an Employee: Employees need to obtain a Dutch fiscal number, known as the “Burgerservicenummer” (BSN). Residents can obtain a BSN at their local municipality, while non-residents can acquire one at designated “Register Niet Ingezetenen” (RNI) desks.

• Wage Tax Return and Payment: Employers are required to file electronic wage tax returns and make payments within one month after each pay period. Failure to comply may result in automatic penalties.
• Dutch Personal Income Tax (PIT) Return: The Dutch tax year runs from January 1 to December 31. Tax returns are due by May 1 of the following year, and it is mandatory for taxpayers to file a return upon receiving an invitation from the Dutch tax authorities.

Registration Requirements

• A Dutch employer is generally not mandated to offer a pension scheme unless a collective labor agreement applies or a mandatory industry pension fund is in place. However, many employers choose to offer pension arrangements voluntarily.

Ongoing Compliance Requirements

• Employers must ensure the timely payment of contributions to pension funds, which are typically deducted from employee wages during the payroll process. Contribution rates vary per fund and may be paid monthly, quarterly, or annually.

• Employment Contracts: Employers must draft employment contracts compliant with Dutch employment law and any applicable collective labor agreements.
• Minimum Wages: As of January 2024, the minimum wage for individuals aged 21 and over is €13.27 per hour. Employers must account for mandatory annual holiday allowances of 8% in salary calculations.
• Holiday Leave and Illness: Employees are entitled to a minimum of four times their average weekly working days in paid holiday leave. Employers are also required to continue paying 70% of the gross salary during the first two years of illness, with many collective labor agreements providing for higher percentages.
• Compensation and Benefits Package: Within legal limits, employers can offer a flexible compensation and benefits package. Regular reviews of contracts, pension plans, and compensation levels are recommended.
• Extraterritorial Costs and the 30% Facility: Employers can reimburse employees for extraterritorial costs incurred while working in the Netherlands. Alternatively, they can apply the 30% tax facility for employees with specific expertise recruited from abroad.
• Reimbursement of Actual Costs: Employers may reimburse actual extraterritorial costs tax-free, provided the expenses are substantiated.
• 30% Facility: The 30% facility allows for a tax-free allowance of up to 30% of the employee’s gross salary for qualified foreign employees, subject to specific conditions and time limits.
• Immigration: European Economic Area (EEA) and Swiss nationals do not require immigration permits. Non-EEA employees must verify the need for work and residence permits.
• Social Security: Employees are typically covered by the social security system of the country where they perform work. Specific regulations apply to EEA and non-EEA employees.
• EEA and Switzerland: The social security status of individuals working in different EEA countries is determined based on EU regulations. An A1 statement may be requested for verification of coverage.
• Social Security Treaty: Employees from countries with a social security treaty with the Netherlands may have different obligations. It’s advisable to review the applicable treaty.
• Foreign Company Pension: Contributions to foreign pension schemes may be considered taxable income in the Netherlands unless certain conditions are met for favorable tax treatment.
• Healthcare: All residents must obtain Dutch healthcare insurance, with exceptions for EEA and non-EEA employees who hold an A1 statement or Certificate of Coverage.
• Employee File: Employers are required to maintain an employee file containing mandatory documents such as employment contracts, identification, wage tax statements, and any applicable permits.
• Occupational Health Service: Employers must engage an occupational health service to assist with compliance regarding employee health and safety, illness, and rehabilitation.

• Work-Related Cost Scheme: The WRCS allows employers to provide benefits and allowances to employees with specific tax-free limits. Benefits exceeding these limits are subject to an 80% tax.
• Reporting Obligations: Employers must calculate and report any owed tax from the WRCS annually, specifying it in the wage tax return for the following tax period.

Payroll net payments must be made in local currency and can be processed from either a Dutch or overseas bank account. Payments to Dutch authorities should also be made from either type of account, ensuring that all transaction fees are covered to prevent interest charges on underpayments.

New hires are registered with tax and social security authorities through periodic tax filings.

The registration of new hires and leavers with the Social Security Authority occurs automatically based on periodic tax reports.

• Copy of the employee’s ID
• Completed “Model Opgaaf gegevens voor de loonheffingen” form

Note: These documents do not need to be submitted to authorities but must be retained by the Client for reference and potential tax audits.

Registration of new hires and leavers with the Tax Authority also occurs automatically through periodic tax reports.

Statutory filings and payments, including money movement services and payments to third parties, are classified as add-on services. If the Client opts for these statutory filings and payments services, the following activities will be included:

Social Security Payments:

• Due Date: Contributions are due one month after the payroll period ends.
• Payment Options: Payments should be made via bank transfer. The payment reference is provided in the annual letter the employer receives, detailing reporting and payment due dates, including both wage taxes and employee insurance contributions.

Tax Agency:

• Local Office Name: Belastingdienst (Tax and Customs Administration)

Wage tax and employee social security contributions are reported in a single declaration and are payable within one month after the end of the reporting period.

Wage tax is withheld from employee wages and serves as an advance payment of income tax. Employers are responsible for deducting this tax from employees’ paychecks and remitting it to the tax authorities. This system ensures that employees fulfill their income tax obligations throughout the year, rather than in a lump sum at tax time.

National insurance contributions fund social security schemes that provide financial support to residents and employees in the Netherlands. Participation in these schemes is mandatory and insures individuals against the financial implications of old age, death, exceptional medical expenses, and costs related to children. The national insurance schemes include:

• General Old Age Pensions Act (AOW): Provides pensions to residents upon reaching retirement age.
• Surviving Dependants Act (Anw): Offers financial support to surviving dependants of deceased individuals.
• Long-Term Care Act (Wlz): Covers long-term care costs for individuals who need sustained assistance.
• General Child Benefit Act (AKW): Provides financial support to families with children (note that employers do not contribute to this scheme).

Employers are responsible for withholding national insurance contributions from employees’ wages and remitting them to the Tax Administration.

These contributions are also mandatory and fund insurance schemes that protect employees from financial difficulties due to illness, occupational disability, and unemployment. The employed persons’ insurance schemes include:

• Sickness Benefits Act (ZW): Covers employees during illness.
• Invalidity Insurance Act (WAO) / Work and Income according to Work Capacity Act (WIA): Provides support for employees who are unable to work due to disability.
• Unemployment Insurance Act (WW): Offers financial assistance to unemployed workers.

In contrast to national insurance contributions, the full cost of employed persons’ insurance contributions is borne by the employer.

Under the Health Care Insurance Act (Zvw), employees must pay a nominal contribution for their health care insurance to a health care insurer. Additionally, employers are required to pay an employer’s contribution to the Tax Administration on behalf of their employees. In some cases, employees may also contribute directly to the health care costs. Together, these payments are referred to as the “income-dependent contribution pursuant to the Health Care Insurance Act (Zvw).

National insurance contributions are applicable when an individual is considered a resident of the Netherlands or is subject to payroll tax for employment conducted in the country. These contributions are collected through tax withholding. The key national insurance schemes include:

• General Old Age Pension (AOW): This act ensures that all residents accrue rights to a state pension. The pension amount is based on the number of years lived in the Netherlands before reaching the state retirement age, capped at a maximum of 50 years. As of 2024, the gross annual state pension amounts are:
  • For cohabiting couples (per partner): €13,224
  • For single individuals: €19,412
• Surviving Dependents’ Pension (ANW): This act provides financial support to surviving dependents of deceased individuals. The insured gross amount for 2024 is €19,080. Eligibility criteria include being a caregiver for children under 18 or having a disability rate of at least 45%. An additional income test may affect the benefit amount.
• Long-Term Care Benefits (Wlz): This scheme offers care and support for residents needing significant daily assistance due to mental or physical limitations. Most inhabitants of the Netherlands are automatically insured under the Wlz scheme.
• Child Support Payments (Kinderbijslag): Child benefit is a financial aid designed to help cover the costs associated with raising children. Benefits are available for biological children, children of partners or ex-partners, foster children, and children cared for as if they were one’s own.

Employee insurance benefits are mandatory for those employed in the Netherlands, with employers responsible for paying the related premiums. Key employee insurance schemes include:

• Unemployment Benefits (WW): Employees who lose their jobs may qualify for unemployment benefits. Conditions for eligibility include losing at least 5 hours of work per week, being available for work, and having worked for at least 26 weeks within the past 36 weeks. Employees receive 75% of their last salary, capped at €71,628 (2024), with a maximum entitlement of 24 months based on employment duration.
• Disability Income Benefits (WIA): This act supports employees with a salary loss of at least 35% due to disability after two years of illness. The WIA consists of two provisions: IVA (for permanent disability) and WGA (for partial disability). Benefits may reach 70% of lost income, with a maximum coverage of €71,628.
• Sick Leave Benefits (ZW): Employers are required to continue paying a minimum of 70% of an employee’s salary during the first two years of sickness. After 104 weeks, the employee may transition to the WIA for disability benefits.

Mandatory Health Insurance

In addition to the aforementioned benefits, every resident and worker in the Netherlands must have basic health insurance, which covers standard medical care. The average annual premium for basic health insurance is approximately €1,752, and children under 18 are exempt from this cost. Supplemental health insurance policies are also available for additional coverage, with an average premium of about €370 per year.