NETHERLANDS PEO & EOR
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DID YOU KNOW
- The Dutch are the most active population in Europe, so it’s no surprise that they also score highly in terms of overall health and happiness
- On average, Dutch men are the tallest in the world
- The Netherlands has always been a highly progressive country, and it was the first to legalise same-sex marriage (in April 2001)
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NETHERLANDS EOR Services
A very stable economy, backed by a lot of foreign investment
Working in NETHERLANDS
Financial Year Dates
The financial year in the Netherlands runs from January 1st to December 31st.
Minimum Wage
As of January 1, 2025, the gross statutory minimum wage for full-time employees aged 21 and over is €2,100 per month. Minimum wage rates are adjusted biannually and vary based on age and working hours.
Standard working hours
The standard full-time workweek in the Netherlands is 36 to 40 hours, typically spread over 5 days. Flexible working arrangements, including part-time schedules, are common and supported by Dutch labour laws.
Overtime
Overtime regulations are generally determined by collective labour agreements (CAOs) or individual employment contracts. There is no statutory obligation for overtime pay unless specified in the applicable CAO or contract.
Holiday Allowance
Employees in the Netherlands are entitled to a minimum of four times the number of days they work per week as paid annual leave. For a full-time employee working five days a week, this equates to 20 days of statutory leave per year.
In addition to annual leave, employees receive a holiday allowance (vakantiegeld), which is at least 8% of their gross annual salary. This allowance is typically paid out in May or June and is intended to help cover the costs of holidays.
Sick Leave
Under Dutch law, employers are required to pay at least 70% of an employee’s salary during the first two years of sickness absence. In the first year, this amount must be at least the minimum wage. After two years, if the employee is still unable to work, they may be eligible for disability benefits through the Employee Insurance Agency (UWV).
Maternity & Paternity Leave
- Maternity Leave: Pregnant employees are entitled to a minimum of 16 weeks of paid maternity leave, which includes 4 to 6 weeks before the due date and at least 10 weeks after childbirth.
- Paternity Leave: Partners are entitled to one week (five working days) of paid paternity leave at full salary, to be taken within four weeks after the birth. Additionally, partners can take up to five weeks of supplementary paternity leave at 70% of their salary, to be taken within six months of the child’s birth.
Public Holiday
The Netherlands observes several public holidays throughout the year. In 2025, the official public holidays are:
- New Year’s Day
- Good Friday
- Easter Sunday
- Easter Monday
- King’s Day
- Liberation Day
- Ascension Day
- Whit Sunday
- Whit Monday
- Christmas Day
- Boxing Day
Note: While Good Friday and Liberation Day are recognized as public holidays, they are not mandatory paid days off unless stipulated in the employee’s contract or collective labour agreement.
Social Contributions
In the Netherlands, social security contributions are a collaborative responsibility between employers and employees. These contributions fund various social insurance schemes, including pensions, health insurance, unemployment benefits, and disability coverage. For 2025, the maximum annual salary basis for calculating these contributions is set at €75,864
Employees contribute to national insurance schemes, which are integrated into the income tax system. The rates for 2025 are:
- Old Age Pension (AOW): 90%
- Survivor Benefits (ANW): 10%
- Long-Term Care (WLZ): 65%
These contributions are levied on income up to €38,441.
Employers are responsible for several contributions based on the employee’s gross salary, up to the maximum income threshold of €75,864:
- Unemployment Insurance (AWf):
- Low Rate: 74% for employees on permanent contracts.
- High Rate: 74% for employees on temporary contracts.
- Occupational Disability Insurance (Aof):
- Low Rate: 28% for small employers.
- High Rate: 64% for large employers.
- Return to Work Fund (Whk): Varies by employer risk category, averaging around 33%.
- Healthcare Insurance (ZVW): Employers contribute 51% of the employee’s gross salary.
Income Tax
The Dutch income tax system is structured into three categories, known as “boxes,” each encompassing different types of income and subject to distinct tax rates and rules.
Box 1: Income from Work and Home Ownership
This box covers income from employment, business activities, and home ownership. In 2025, the Netherlands introduced a three-bracket progressive tax system for Box 1 income:
Taxable Income (€) | Tax Rate |
Up to €38,441 | 35.82% |
€38,441 – €76,817 | 37.48% |
Over €76,817 | 49.50% |
Note: The first bracket includes national insurance contributions totaling 27.65%.
These rates apply to individuals below the state pension age. For those above this age, reduced rates apply due to lower national insurance contributions.
Box 2: Income from Substantial Interest
Box 2 pertains to income from a substantial interest in a company, defined as holding at least 5% of shares in a corporation. The tax rates for 2025 are:
Taxable Income (€) | Tax Rate |
Up to €67,804 | 24.5% |
Over €67,804 | 31% |
Box 3: Income from Savings and Investments
Box 3 covers income from savings and investments. Instead of taxing actual returns, the Netherlands uses a deemed return system, applying a fixed rate to the value of assets. In 2025:
- A flat tax rate of 36% is applied to the deemed return on net assets.
Note: The deemed return is calculated based on the composition of assets, with different assumed returns for savings, investments, and debts.
Tax Credits and Allowances
The Dutch tax system offers various credits and allowances to reduce tax liability:
- General Tax Credit (algemene heffingskorting): Available to all taxpayers, decreasing as income increases.
- Labour Tax Credit (arbeidskorting): For employed individuals, also income-dependent.
These credits are automatically applied by employers through payroll systems.
Taxation for Pensioners
Individuals who have reached the state pension age benefit from reduced tax rates in Box 1, reflecting lower national insurance contributions. In 2025:
Taxable Income (€) | Tax Rate |
Up to €38,441 | 17.92% |
€38,441 – €76,817 | 37.48% |
Over €76,817 | 49.50% |
Residency and Worldwide Income
Dutch residents are taxed on their worldwide income, while non-residents are taxed only on income sourced within the Netherlands. Tax treaties may affect taxation for international income.
Health Care
The Netherlands has a dual-level healthcare system. Basic health insurance (basisverzekering) is mandatory for all residents and covers standard medical care such as visits to general practitioners, hospital care, and prescription medications. Employers contribute to the Health Insurance Act (Zvw) on behalf of their employees, while employees pay monthly premiums to their chosen health insurance providers.
Employers are not required to provide additional private health insurance, but many offer supplementary coverage as part of their employment packages.
Visas
The Netherlands offers various visa and work permit options tailored to different employment scenarios. Understanding the appropriate permit is crucial for compliance and successful employment.
Short-Term Work (Up to 90 Days)
Employment Permit (TWV)
- Purpose: For non-EU/EEA/Swiss nationals undertaking employment in the Netherlands for up to 90 days.
- Application: Employers must apply to the Employee Insurance Agency (UWV) on behalf of the employee.
- Conditions: The employer must demonstrate that no suitable candidates are available within the EU/EEA.
- Processing Time: Up to 5 weeks.
Note: A TWV is typically required for short-term assignments unless the worker qualifies for an exemption.
Long-Term Work (Over 90 Days)
Combined Residence and Work Permit (GVVA)
- Purpose: For non-EU/EEA/Swiss nationals intending to work in the Netherlands for more than 90 days.
- Application: A single application submitted to the Immigration and Naturalisation Service (IND) covers both residence and work authorization.
- Processing Time: Up to 90 days.
- Exemptions: Certain categories, such as highly skilled migrants and intra-corporate transferees, may have different procedures.
Highly Skilled Migrant (Kennismigrant) Scheme
- Purpose: Designed to attract highly qualified professionals to the Netherlands.
- Requirements:
- Employment contract with a Dutch employer
- Minimum gross monthly salary:
- €5,688 for individuals aged 30 or older.
- €4,171 for individuals under 30.
- €2,989 for recent graduates or those following a search year.
- Validity: Aligned with the duration of the employment contract, up to a maximum of 5 years.
This scheme allows for expedited processing and does not require labor market testing.
EU Blue Card
- Purpose: For highly skilled non-EU nationals with a recognized higher education degree.
- Requirements:
- Employment contract of at least one year.
- Minimum gross annual salary: €74,940.
- Benefits:
- Facilitates mobility within participating EU countries.
- Pathway to permanent residency.
The EU Blue Card offers an alternative for highly skilled professionals seeking to work across EU member states.
Intra-Corporate Transferee (ICT) Permit
- Purpose: For employees of multinational companies being transferred to a Dutch branch.
- Eligibility:
- Managers, specialists, or trainees employed for at least 3 months within the company.
- Transfer duration between 90 days and 3 years.
The ICT permit streamlines the process for internal company transfers.
Orientation Year (Zoekjaar) Permit
- Purpose: Allows recent graduates from Dutch or top international universities to seek employment in the Netherlands.
- Duration: 1 year.
- Benefits:
- No requirement for a work permit during this period.
- Opportunity to transition to a highly skilled migrant permit upon securing employment.
This permit encourages international graduates to contribute to the Dutch labor market.
Entrepreneur and Startup Visas
- Self-Employed Entrepreneur Visa:
- Purpose: For individuals intending to start their own business in the Netherlands.
- Requirements: Business plan demonstrating added value to the Dutch economy.
- Startup Visa:
- Purpose: For entrepreneurs launching innovative startups.
- Duration: 1 year, with the possibility to transition to a self-employed visa.
These visas support entrepreneurial initiatives contributing to innovation and economic growth.
13th salary
In the Netherlands, there is no statutory requirement for a 13th-month salary. However, it is common practice for employers to provide a year-end bonus or a 13th-month payment, especially in sectors governed by collective labour agreements. These bonuses are typically paid in December and are subject to income tax.
For more information, refer to our comprehensive guide on 13th and 14th salaries.
Cultural Information
- Language & Communication: The official language is Dutch, though English is widely spoken in business and urban areas. Dutch communication style is known for being direct, clear, and pragmatic – employees are encouraged to speak openly and contribute ideas regardless of hierarchy.
- Workplace Culture: Dutch business culture values punctuality, consensus-building, and work-life balance. Flat organisational structures are common, with a strong emphasis on equality and mutual respect between colleagues at all levels.
- Traditions & Lifestyle: Major cultural events include King’s Day (Koningsdag) in April, Sinterklaas in December, and Pride Amsterdam in August. Dutch cuisine is simple and hearty, and cycling is deeply embedded in daily life – including commuting to work.