Employer of Record (EOR) in Netherlands

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A Dutch Employer of Record (EOR), also known as a Global Professional Employer Organization (Global PEO), offers a simplified solution for businesses expanding into the Netherlands without the need for entity setup. Mercans provides the legal presence required for your business and ensures full Intellectual Property (IP) protection, while managing all aspects of local compliance, including payroll, taxes, statutory benefits, and employment contracts.

The Employer of Record (EOR) in the Netherlands is responsible for:

Ensuring compliance with Dutch employment laws and regulations.
Managing local payroll and statutory benefits.
Handling taxes and other mandatory filings.
Drafting and maintaining employment contracts.
Distributing payslips and salary payments.

By leveraging Mercans’ EOR services in Europe, businesses can efficiently navigate the complexities of Dutch employment law, ensuring compliance while focusing on core operations. Whether your goal is strategic expansion or hiring top talent in the Netherlands, Mercans’ global solutions advisors are here to guide you in making the best decisions for your organization’s growth.

EOR Solutions in the Netherlands

EOR for Prospective Employees: 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.
EOR + Recruitment: 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.
Visa Sponsorship and Global Mobility: 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.
AOR for Contractor Payments: Businesses grappling with contractor payments can leverage our Assistance on Record (AOR) services. We handle the complexities of contractor payments, guaranteeing accuracy and compliance.
Converting Freelancers to Employees: Mercans supports the transition from independent contractors to permanent employees in the Netherlands. Our expertise ensures smooth conversions while adhering to legal requirements.
HCM Integration: 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.

Employment in the Netherlands

Employment in the Netherlands is governed by comprehensive regulations. Understanding Dutch labor laws, including working hours, minimum wages, and employee benefits like health insurance and unemployment insurance, is essential for businesses. Leave policies, taxation, and expat mobility matters demand attention. Mercans simplifies employment in the Netherlands, offering EOR solutions, recruitment, visa sponsorship, payroll services, and expertise in compliance with local laws, ensuring smooth, efficient operations for both businesses and employees.

Employees vs. Independent Contractors

Understanding the distinction between employees and independent contractors is pivotal for compliance. Mercans offers access to resources that shed light on the nuances of worker classification in the Netherlands. These insights, along with our EOR services, empower you to make informed decisions while ensuring compliance with Dutch regulations. Partner with Mercans to embark on a successful employment journey in the Netherlands, where expertise meets compliance, ensuring your business thrives in the Dutch market.

Understanding Worker Classification: Employees vs. Contractors in the Netherlands

Contractors	Employees
Contractors enjoy a high level of control over their work.	Employees typically receive more guidance and direction from their employer.
They have the autonomy to decide how and when to complete tasks.	Employers provide necessary equipment and tools.
Contractors own their own equipment and tools.	Employees are deeply integrated into their employer's organization and often work on-site.
They tend to work independently and remotely, using their own resources.	They are entitled to various statutory employment benefits, including minimum wage, overtime pay, and paid leave.
While entitled to some benefits like the minimum wage and fair working conditions, contractors are responsible for their own taxes and have limited benefits.	Employees may also enjoy additional benefits such as health insurance and retirement plans.
Contractors can receive up to 70% of their income from one employer.	Employees receive their entire annual salary from one employer.
Engagements with contractors are often time-bound, specific to a project or duration.	Their engagement can be for a fixed term or an indefinite period.
Contractors may bear more risk and liability for their work.	Employees are contractually bound to provide services exclusively to one company.
They have the flexibility to provide services to multiple organizations, as they are not tied exclusively to one company.

Hiring and Recruiting in Netherlands

Top #5 Cities With Remote Talent

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.

Top #5 Jobs on Demand

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.

Employee Onboarding

Employee onboarding in the Netherlands is streamlined with Mercans’ EOR platform. Our integrated solution offers an employee self-serve portal, simplifying the onboarding process. New hires can access essential information, submit documentation, and complete the employee take-in form with ease. This user-friendly portal ensures a smooth transition for employees, reducing administrative burdens on HR teams. It empowers individuals to manage their onboarding efficiently, from tax declarations to selecting benefits. Mercans’ commitment to innovative technology enhances the onboarding experience, setting the stage for a successful employment journey in the Netherlands.

Background Verification

In the Netherlands, hiring demands rigorous background checks. Mercans simplifies this through our EOR services. We offer a comprehensive suite of checks:

Identity Verification scrutinizes official IDs
Employment History confirms roles and dates
Education Verification validates qualifications
Criminal Background Checks adhere to laws
Credit Checks assess financial responsibility
and Reference Checks collect insights on abilities and character.

Mercans ensures secure, compliant, and informed hiring decisions in the Netherlands.

Payroll in Netherlands

Payroll Essentials for the Netherlands

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Government Requirements

Registration Requirements

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.

Ongoing Compliance Requirements

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.

Pension Requirements

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 Obligations

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.

Payroll Requirements

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.

Banking Requirements Related to Payroll

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.

Statutory Filings and Payments in the Netherlands

Statutory Filings

The table below outlines the various payroll-related statutory filings. Please note that statutory filings and payments are not part of the standard service scope.

Statutory Body	Filing Description	Frequency	Filing Deadline	Purpose
Belastingdienst	Combined declaration for income tax and social security	Every 4 weeks or monthly	One month after the end of the month (monthly) or 4 weeks after the end of the 4-week period	Reporting monthly tax and social security contributions
Pension Funds (Sectors)	Monthly Uniform Pension Declaration (UPA)	Monthly	10 days after the month-end	Reporting of pension premiums owed
Pension Funds (Company)	Pension Plan Specific Format	Monthly	10 days after the month-end	Reporting of pension premiums owed
Stichting PAWW	Online Filing	Every 4 weeks or monthly	One month after the month-end (monthly) or 4 weeks after the end of the 4-week period	Scheme extending unemployment benefits to 36 months (maximized by law to 24 months)
CBS	Monthly Statistics Report	Monthly	One month after the month-end	Collection of statistical data required by the government
Belastingdienst	Year-end Income Tax Declaration (Form 5)	Annually	December or February of the following year	Reporting on specific taxes, such as final levies on excessive severance packages
UWV Employee Insurance Agency	Maternity & Sickness Leave Report	Event-based	4-2 weeks prior to the start of the leave	Reimbursement for maternity and sick leave pay

Registration of New Hires and Leavers with Tax and Social Security Authorities

New Hire Registration Process:

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

Social Security Authority:

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

Required Documents for New Hires:

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.

Tax Authority:

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

Payments to Statutory Bodies

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.

Declarations and Payments Required by the Tax Authority:

Service Description	Filing Frequency	Due Date
Monthly Payment Only payment of monthly withheld income taxes is required	N/A	Within 30 days from the end of the reporting period
Final Levy on Certain Employment Costs Client provides additional wage types to be reported in periodic tax returns as non-cash or informative wage types to Mercans. Mercans does not cover reporting non-employment or payroll-related taxable payments.	Annually (December or February)	Within 30 days from the end of the reporting period
Final Levy on Excessive Severance Packages Mercans completes the necessary form; the Client submits the form “Aangifte loonheffingen pseudo-eindheffing excessieve vertrekvergoeding” online.	Monthly	Within 30 days from the end of the reporting period

Payroll Taxes in Netherlands

What Are Payroll Taxes?

Payroll taxes are mandatory contributions that employers withhold from their employees’ wages to fund various social programs and government services. In the Netherlands, payroll taxes primarily consist of the following components:

Wage Tax
National Insurance Contributions
Employed Persons’ Insurance Contributions
Income-Dependent Contribution Pursuant to the Health Care Insurance Act (Zvw)

Wage Tax

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

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.

Employed Persons’ Insurance Contributions

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.

Income-Dependent Contribution Pursuant to the Health Care Insurance Act (Zvw)

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).

Cost to Hire an Employee in Netherlands

Employment in the Netherlands entails an array of obligations, from social security contributions to healthcare, disability, and unemployment insurance. These factors collectively form the Employment Cost in the Netherlands, necessitating businesses to proficiently comprehend and manage these expenses.

How Mercans Can Help:

Social Security Contributions: The rates of social security contributions in the Netherlands can slightly vary from year to year, just like the personal income tax. Here are the main contributions to consider:

the wage tax is levied at rates ranging from 9% to 51% depending on the salary;
employees are subject to social security contributions of 27.65% of their gross salaries;
employers must pay unemployment premiums of 2.94% or 7.94% based on the duration of the contract;
employers must also contribute 8.55% for disability insurance and 5% for childcare.

The realm of social security contributions (SSC) in the Netherlands is extensive and multifaceted, encompassing a range of vital contributions crucial for both employees and employers. Among these are:

Healthcare Insurance Act (ZVW): Provides essential healthcare coverage for individuals in the Netherlands, ensuring access to medical services.
Disability Fund (Aof): Offers financial support to individuals facing disabilities, helping them maintain their livelihoods despite challenges.
Incapacity for Work Insurance Act (WAO): Demonstrates the nation’s commitment to supporting individuals with reduced work capacity by providing income security.
Income to Labor Capacity Act (WIA): Ensures continued income for those with diminished work capacity, emphasizing the importance of financial stability during challenging times.
Child Care Act (WKO): Supplements the AOF contribution by providing additional support for childcare expenses, alleviating the financial burden on parents.
General Unemployment Fund (Awf): Plays a crucial role in assisting incapacitated employees in their efforts to reintegrate into the labor market, promoting employment.
Work Resumption Fund (WHK): Aids in facilitating benefits and support for individuals seeking to return to work after incapacitation.
Illness Act for flexible contract workers (ZW-Flex): Addresses the specific needs of individuals with flexible employment arrangements, ensuring they receive support during periods of illness.
Partially Incapacitation Act (WGA): Provides assistance to those who are partially incapacitated, emphasizing the importance of tailored support.
Governmental Execution Fund (UFO): Ensures that public servants within public services have access to unemployment benefits, promoting financial security in the public sector.
Comprehensive Understanding: Our experts provide an in-depth understanding of SSCs, enabling you to grasp the intricacies and implications of each contribution.
Conversion Assistance: For SSCs transitioning into newer contributions like Aof, we facilitate a seamless shift, ensuring your organization remains informed and compliant.
Customized Solutions: Mercans tailors solutions to your unique requirements. Whether it involves Aof surcharges related to the Child Care Act (WKO) or managing contributions for diverse employee categories, we’ve got you covered.

Additional Key Terms:

Unemployment Benefit Scheme (WW): Mercans assists in managing the Dutch Unemployment Benefit Scheme (WW – Werkloosheidswet), a crucial element of social security.
State Pension (AOW): We guide you through the State Pension (AOW – Algemene Ouderdomswet), ensuring your employees’ future retirement is secure.
Dutch Occupational Pension: Mercans’ expertise extends to managing Dutch Occupational Pension schemes, aligning with Dutch pension regulations.
Dutch Holiday Allowance (Vakantiegeld): We help administer the Dutch Holiday Allowance (Vakantiegeld), a significant component of employee compensation.
Employing staff in the Netherlands can be intricate, but with Mercans as your trusted partner, you can focus on core business activities while we efficiently manage the complexities, saving you valuable time and resources.

Employee Cost Calculation in Netherlands

Employer Cost

Employer costs encompass the expenses borne by an employer, over and above the employee’s base salary. These are the additional payments made in support of your workforce. Wage-related expenses can fluctuate, influenced by individual agreements with employees and obligations stipulated in collective agreements or industry regulations. Notably, the Dutch system imposes a range of responsibilities on employers in support of their staff.

In the Netherlands, employers’ costs can be categorized into two main types: fixed (mandatory) and supplementary (optional), which together constitute the total outlay for employers. Here’s a breakdown:

Gross monthly salary
Holiday allowance (8%)
Pension contribution (voluntary)
Employee insurance and healthcare contributions (approximately 20%)
Expense allowances

Now, let us assume an employee has a gross salary of € 2.400,00. Here is the cost per month for that employee based on that salary:

Gross salary	€ 2.400,00
Holiday allowance	€ 192.00
Pension contribution	€ 159.20
Employee insurance and healthcare contributions	€ 486.56
Expense allowances	€ 175
Total employer costs	€ 3,412.76

Employment Contracts in Netherlands

An employment contract (arbeidscontract) is a formal agreement between an employee and an employer that outlines the conditions of employment (arbeidsvoorwaarden). These contracts can be categorized primarily into two types: fixed-term and permanent contracts.

Types of Employment Contracts

Fixed-term Contracts: These are temporary agreements that specify a duration of employment. Fixed-term contracts can be written or verbal.
Permanent Contracts: This type of contract has no predetermined end date, providing employees with greater job security.

Transitioning from Temporary to Permanent Contracts

Employers cannot extend temporary contracts indefinitely. According to Dutch law, an employee is entitled to a permanent contract after:

Three consecutive temporary contracts, or
A total of three years of temporary contracts.

This regulation may be subject to variation based on stipulations within a collective labor agreement (Collectieve Arbeidsovereenkomst, CAO).

Written Statement of Employment Details

Employers are required to provide employees with clear information regarding their employment conditions. The written employment contract must include the following details:

Employer and Employee Information: Names and places of residence.
Work Location: Specify if there are multiple workplaces and if the employee can choose their work location.
Job Description: A clear outline of the employee’s role or nature of work.
Working Hours: Usual hours per day or week, including arrangements for overtime and shift swapping.
Salary Details: Starting salary, components of salary, and payment frequency.
Variable Hours and Overtime: Terms for irregular working hours and salary for overtime.
Work Schedule: Days and hours when the employee may be required to work.
Start Date: The date the employee joined the company.
Contract Term: The duration of the contract if it is fixed-term.
Type of Contract: Whether it’s temporary, payroll, or permanent.
Trial Period: Duration and conditions if applicable.
Training Entitlement: Any educational training offered by the employer.
Holidays: Holiday entitlement and allowance, including paid leave and calculation methods.
Termination Procedures: Notice periods and procedural requirements for ending the employment agreement.
Pension Information: Details if applicable.
Non-Compete/Non-Solicitation Clauses: Conditions if applicable.
Restrictions on Ancillary Activities: Objective justifications for any restrictions.
Collective Labor Agreement (CAO): If applicable, reference to any relevant CAO.

Collective Labor Agreements (CAOs) in the Netherlands

If you operate a business in the Netherlands and hire employees, you may be required to engage with a Collective Labor Agreement (Collectieve Arbeidsovereenkomst, CAO). It’s crucial to determine whether a CAO applies to your business and understand the conditions under which your employment terms may differ from the CAO.

What is a CAO?

A CAO is a collective agreement between employers (or employers’ organizations) and employees (trade unions) that outlines key employment conditions, including:

Wages
Working hours
Notice periods
Pensions

There are two primary types of collective agreements:

Sectoral Collective Agreements These are agreements that apply within a specific sector, covering all companies and employees within that industry.
Company Collective Agreements These agreements are tailored to a specific company, outlining employment conditions unique to that organization.

When Does a CAO Apply?

A CAO can be applicable to either a single company or an entire business sector. You must comply with a CAO if:

You have directly concluded it with trade unions.
You are a member of an employer’s organization that has established a CAO for your business sector.
You are not a member of an employer’s organization, but the Ministry of Social Affairs and Employment has declared a CAO binding for your sector (known as Algemeen Verbindend Verklaring or AVV). You can verify the existence of a CAO for your sector through the Uitvoeringstaken Arbeidsvoorwaardenwetgeving (UAW).
You are not a member of an employer’s organization, and no binding CAO exists for your sector, but you implement your own CAO.

Employee Benefits in Netherlands

Overview of Mandatory Employee Benefits in the Netherlands

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Overview of Mandatory Employee Benefits in the Netherlands

The Dutch social security system is one of the most comprehensive in Europe, comprising two main parts: the National Insurance Scheme (volksverzekeringen) and the Employee Insurance Scheme (werknemersverzekeringen). Here’s a breakdown of the mandatory benefits provided under these schemes:

National Insurance Benefits

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

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.

Additional Employee Benefits Offered by Employers

Beyond the mandatory benefits provided by the state, many employers in the Netherlands offer supplementary employee benefits to attract and retain talent. These may include:

Retirement Pension Plans: Employers may be obligated to offer a pension plan based on collective labor agreements (CAOs) or compulsory industry pension funds. Since the introduction of the new pension law on July 1, 2023, employers must provide defined contribution plans with flat-rate premiums, and existing plans will be transitioned accordingly.
Supplemental Disability Insurance: Beyond the WIA benefits, employers may provide additional disability insurance to supplement legal benefits.
Accident Insurance Policies: This policy pays out benefits in cases of death or disability resulting from accidents.
Group Health Insurance: Employers may choose to cover premiums for basic health insurance for employees and their children.

Common Employee Perks and Incentives

In addition to mandatory and supplementary benefits, employers often provide various perks to enhance employee satisfaction and engagement. Common perks include:

Transport Allowance: Reimbursement for business-related travel (up to €0.23 per kilometer).
Working from Home Allowance: Financial support for remote work-related expenses.
Education Reimbursement: Funding for job-related training and courses.
Company Devices: Provision of mobile phones, laptops, and company cars based on business needs.
Flexible Working Arrangements: Options to tailor work schedules.
Flexible Leave Policies: Opportunities to purchase extra holidays or take care-related leave.
Employer-Sponsored Training: Programs focused on work-life balance and stress reduction.
Gym Membership Discounts: Promoting health and wellness.
Bike Plans: Initiatives encouraging cycling to work.
Financial Support Initiatives: Assistance in various forms, including financial planning resources.

Best Employer of Record Netherlands

Mercans is the best employer of record in the Netherlands for the following reasons:

Compliant with Dutch Labor Laws: Mercans strictly adheres to all regulations set forth by the Dutch labor authorities, ensuring complete compliance and legal security.
Compliant with Belastingdienst: Mercans ensures full compliance with the Dutch tax authority, Belastingdienst, handling all payroll tax obligations accurately and efficiently.
Independent Entity: Operating as a standalone entity, Mercans provides tailored and reliable employment services, ensuring flexibility and responsiveness to client needs.
Supports Diverse Employment Types: Mercans effectively manages a variety of employment arrangements, including employees, freelancers, contractors, and expats, offering customized solutions to meet different requirements.
Enterprise-Ready Solutions: Designed for large enterprises, Mercans offers scalable and sophisticated services that cater to complex organizational structures and diverse workforce needs.
Multi-Currency Payroll Management: Mercans facilitates payroll processing in multiple currencies, supporting seamless financial operations for global and multi-national businesses.
Extensive Global Reach and Multi-Country Payroll Expertise: With a strong international presence, Mercans excels in managing multi-country payroll, ensuring smooth operations across borders.
Data Protection and Compliance Standards: Mercans adheres to stringent data protection measures, ensuring compliance with GDPR, and maintains high-security standards with SOC 1 & SOC 2 certifications.
ISO Certifications: Holding ISO 20000 and ISO 27001 certifications, Mercans demonstrates a commitment to exceptional IT service management and information security.
Robust Security Practices: Mercans meets the OWASP ASVS 3.0 standards, ensuring that application development and management follow best security practices.
HRBlizz: Mercans HR Blizz is a proprietary global payroll and talent management SaaS suite that streamlines payroll processes while ensuring compliance with local regulations, backed by over 1,000 in-country specialists with expertise in labor laws and business practices.
G2N Nova: G2N Nova offers advanced global gross-to-net payroll processing in over 100 countries, recognized as the world’s most sophisticated native payroll engine. It is available as a SaaS or service delivery platform, functioning as a standalone solution or integrating seamlessly with major HCM and Workforce Management systems.

Conclusion

In conclusion, Mercans stands as a steadfast partner in navigating the intricacies of employment in the Netherlands. Our Employer of Record (EOR) services offer businesses a comprehensive solution to manage the entire employment lifecycle. From employment contracts and labor law compliance to payroll management, employee benefits, and even global mobility services, Mercans provides tailored solutions to meet diverse needs. By leveraging our expertise, businesses can confidently expand their operations in the Netherlands, ensuring compliance with local regulations and offering employees a seamless and rewarding employment experience. Mercans is your trusted ally in the Netherlands’ dynamic employment landscape, simplifying complexities and enhancing operational efficiency.

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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