The Netherlands is a European powerhouse for global business, known for its innovation, multilingual talent pool, and strategic location. With one of the most open economies in the world, the country hosts regional headquarters for giants such as Philips, Heineken, ING, Shell, and ASML, as well as a thriving startup ecosystem in fintech, AI, and green technology.

The Dutch workforce is highly educated — over 80% of young professionals have completed tertiary education — and English proficiency is among the highest globally, making it one of the easiest European markets for international companies to operate in. The Netherlands is also home to world-class universities such as Delft University of Technology, Erasmus University Rotterdam, and the University of Amsterdam, ensuring a steady pipeline of STEM and business graduates.

However, hiring in the Netherlands comes with strict employment laws, high social security contributions, and strong collective bargaining agreements (CBAs). Employers must navigate complex rules around employment contracts, payroll taxes, and termination protections. Setting up a legal entity can take months, requiring significant administrative investment.

Many international companies choose to simplify hiring by partnering with an Employer of Record (EOR). With Gloroots as your Employer of Record in the Netherlands, you can hire talent quickly and compliantly without establishing a local entity. Gloroots manages payroll, tax, and benefits in line with Dutch law, allowing you to focus on scaling your team.

Looking to hire in the Netherlands? Contact us to simplify your expansion and hire with full compliance.

What are the key facts about the Netherlands’ economy and workforce?

The Netherlands is one of Europe’s most dynamic economies, strategically located as a gateway to the EU with world-class logistics and digital infrastructure. Its strong knowledge economy is driven by finance, technology, agriculture, life sciences, and renewable energy, alongside a vibrant startup ecosystem.

Dutch innovation is supported by significant investment in R&D, with companies like ASML, Philips, Shell, and ING leading in global industries. The country is also a leader in sustainable business practices, consistently ranking high in global innovation and competitiveness indices.

The workforce is highly skilled and internationally minded. English proficiency in the Netherlands is ranked #1 globally (EF English Proficiency Index), making it easy for global businesses to integrate. Over 80% of young professionals have a university or higher education, with strong emphasis on STEM, business, and applied sciences.

Key hubs include:

• Amsterdam — finance, fintech, and tech startups
• Rotterdam — logistics, shipping, and international trade
• Eindhoven — technology, semiconductors, and R&D (home to ASML and the High Tech Campus)
• The Hague — government, international organizations, and law

With its transparent regulations, highly skilled workforce, and international orientation, the Netherlands remains one of the most attractive destinations for global employers. However, employers must account for strict labor protections, high social charges, and complex CBAs.

Gloroots helps companies access Dutch talent seamlessly through EOR solutions in the Netherlands, ensuring compliance with contracts, payroll, and tax requirements.

What is the work culture and talent pool like in the Netherlands?

The Netherlands is well known for its progressive and egalitarian work culture. Dutch workplaces value direct communication, collaboration, and consensus-driven decision-making. Hierarchies are relatively flat, and employees are encouraged to contribute ideas openly. Punctuality, transparency, and efficiency are highly valued, while work-life balance is seen as a non-negotiable part of employment.

Flexible work arrangements, including remote work and flexible hours, are widely accepted, and employers are expected to respect employee autonomy. Employees also place high importance on professional development and career growth opportunities, making training and upskilling key retention strategies.

From a talent perspective, the Netherlands offers one of the most international labor markets in Europe. With over 11% of its population being expatriates, companies can access a workforce that is globally minded and multilingual. The country produces strong talent in finance, ICT, engineering, life sciences, logistics, and renewable energy.

Key Hiring Hubs

• Amsterdam: international finance, fintech, media, and startups.
• Rotterdam: logistics, shipping, and trade (Europe’s largest port).
• Eindhoven: high-tech innovation and R&D, especially semiconductors and advanced manufacturing.
• The Hague: government, NGOs, and legal services.

With Gloroots as your Employer of Record in the Netherlands, you gain access to this deep and diverse talent pool while ensuring compliance with Dutch labor law, CBAs, and payroll regulations.

Netherlands Workforce Snapshot

Q. What is the process of setting up an entity in the Netherlands?

Setting up a business entity in the Netherlands is relatively efficient compared to many EU countries, thanks to the country’s business-friendly environment. However, it still requires careful navigation of registration, tax, and labor compliance requirements. The most common structure for foreign companies is the private limited liability company (Besloten Vennootschap or BV).

Steps to Establish a Legal Entity in the Netherlands

1. Choose Legal Structure
   • Most foreign businesses set up a BV (private limited company).
   • Other options include branch offices or partnerships, though these are less common for international expansion.
2. Draft and Notarize Incorporation Documents
   • Articles of Association must be drafted and executed before a Dutch civil-law notary.
3. Register with the Dutch Trade Register
   • Managed by the Netherlands Chamber of Commerce (KvK).
   • The company receives a KvK number, which is its legal business ID.
4. Obtain a Dutch Business Bank Account
   • Required for share capital deposits, payroll, and tax payments.
5. Register for Taxes
   • Mandatory registrations include:
     • Corporate income tax (25.8% for profits > €200,000; 19% below that threshold).
     • VAT (21% standard, with reduced rates for certain goods/services).
     • Payroll taxes and social security contributions.
6. Employment Registrations
   • Employers must register with the Dutch Tax and Customs Administration (Belastingdienst) for payroll withholding.
   • Employee contracts must align with Dutch labor law and applicable collective bargaining agreements (CBAs).
7. Ongoing Compliance
   • Annual financial statements must be filed with the KvK.
   • Strict compliance with labor regulations, CBAs, and tax reporting is mandatory.

Entity setup typically takes 2–6 weeks, but hiring and payroll compliance can extend timelines if the company lacks local HR and legal expertise.

With Gloroots as your Employer of Record in the Netherlands, you can bypass these steps and hire employees within days, while we handle payroll, taxes, and compliance on your behalf.

Entity Setup: Direct Entity vs. Gloroots EOR in the Netherlands

Q. What are the main benefits of using Gloroots as an Employer of Record in the Netherlands vs setting up your own entity?

Hiring in the Netherlands provides access to one of the world’s most skilled and multilingual talent pools. However, setting up a local entity requires incorporation through a notary, payroll registration with Belastingdienst, compliance with CBAs, and ongoing tax and reporting obligations. This can take weeks and require significant HR and legal expertise.

By partnering with Gloroots as your Employer of Record in the Netherlands, you can skip entity setup while still hiring employees legally. Gloroots becomes the legal employer, managing contracts, payroll, tax, and benefits, while you retain full control over the employees’ work. This accelerates market entry, reduces compliance risks, and provides transparent workforce costs.

Benefits: Direct Entity vs. Gloroots EOR in the Netherlands

Q. What are the key employment laws in the Netherlands that employers should know?

Employment in the Netherlands is governed by the Dutch Civil Code, the Working Hours Act, and numerous collective labor agreements (collectieve arbeidsovereenkomsten, or CAOs/CBAs). These laws provide robust worker protections, requiring employers to comply with strict rules on contracts, working hours, leave, and termination.

Key Employment Laws in the Netherlands

• Employment Contracts
  • Contracts must be in writing and specify role, salary, benefits, working hours, and termination conditions.
  • Since 2020, indefinite contracts are encouraged under the Balanced Labour Market Act (WAB), which imposes stricter rules on fixed-term contracts.
• Working Hours
  • Standard working week: 38–40 hours, typically spread over 5 days.
  • The Working Hours Act limits work to a maximum of 60 hours per week (incidental) and average 48 hours over 16 weeks.
• Overtime
  • No statutory overtime pay, but overtime compensation is usually set by CBAs or employment contracts.
• Minimum Wage
  • A statutory minimum wage applies and is updated twice a year (January and July).
  • As of 2024, the monthly minimum wage for full-time employees (21+) is approx. €2,069.
• Annual Leave
  • Employees are entitled to a statutory minimum of 20 vacation days per year (based on a 5-day work week).
  • CBAs often grant additional vacation days.
• Sick Leave
  • Employers must pay at least 70% of salary during sickness for up to 104 weeks (2 years).
  • Many CBAs require employers to top this up to 100% for a portion of the leave.
• Maternity & Paternity Leave
  • Maternity leave: 16 weeks, paid through the social security system.
  • Paternity/partner leave: 1 week fully paid, plus up to 5 additional weeks at 70% pay (funded by social security).

With Gloroots as your Employer of Record in the Netherlands, we ensure your employment contracts, payroll, and leave policies comply with Dutch labor law and applicable CBAs.

Employment Law: Direct Entity vs. Gloroots EOR in the Netherlands

Q. What types of work visas are available in the Netherlands, and how can Gloroots help?

The Netherlands requires non-EU/EEA and non-Swiss nationals to hold a valid work and residence permit to be legally employed. The process is overseen by the Immigration and Naturalisation Service (IND), often in collaboration with the Employee Insurance Agency (UWV). Employers must typically act as visa sponsors, which requires a registered Dutch entity.

Main Types of Work Visas in the Netherlands

1. Highly Skilled Migrant Permit (Kennismigrant Visa)
   • Designed for highly qualified professionals in shortage sectors (e.g., IT, engineering, healthcare).
   • Requires a recognized sponsor employer registered with the IND.
   • Minimum gross salary thresholds apply (as of 2024):
     • €5,331/month for employees aged 30+
     • €3,909/month for employees under 30
     • €2,801/month for graduates from Dutch universities
2. EU Blue Card
   • For highly skilled workers with a recognized degree and a job contract of at least one year.
   • Salary threshold: €6,245/month (2024).
   • Provides greater mobility across EU member states than the Highly Skilled Migrant Permit.
3. Intra-Corporate Transfer (ICT) Permit
   • For managers, specialists, or trainees transferred within multinational companies.
   • Requires prior employment with the company outside the EU for at least 3 months.
4. Regular Work Permit (GVVA)
   • For non-highly skilled roles.
   • Requires a combined work and residence permit, with labor market tests conducted by UWV.
5. Orientation Year Permit (Zoekjaar Visa)
   • For recent graduates from Dutch or top-ranked international universities.
   • Allows one year to seek employment in the Netherlands.

How Gloroots Helps with Work Visas in the Netherlands

Visa sponsorship is one of the biggest challenges for foreign employers, as only Dutch-registered entities can act as recognized sponsors. Without a local entity, companies cannot directly hire non-EU nationals.

With Gloroots as your Employer of Record in the Netherlands:

• We sponsor highly skilled migrant permits under our registered Dutch entity.
• We manage the end-to-end immigration process — from applications to renewals.
• We ensure employees meet IND salary thresholds and compliance requirements.
• We guide employers on choosing the right visa type (e.g., Highly Skilled Migrant vs. EU Blue Card).
• We support relocation and dependent family visa applications.

This means you can access top Dutch and international talent without setting up a Dutch subsidiary or becoming a recognized IND sponsor yourself.

Q. What are the risks of misclassification in the Netherlands?

In the Netherlands, the distinction between an employee and an independent contractor (zelfstandige zonder personeel – ZZP’er) is strictly regulated. Misclassifying workers as contractors to avoid payroll taxes, social security contributions, or benefits obligations can lead to severe legal and financial consequences.

The Dutch Tax and Customs Administration (Belastingdienst) uses the Assessment of Employment Relationships (DBA) Act to evaluate working relationships. While the DBA Act has been under reform, enforcement is tightening, with increased audits expected from 2025 onward.

Criteria for Determining Misclassification

A worker is generally deemed an employee if:

• They perform work under the direction and control of the employer.
• They are integrated into the company’s operations (e.g., fixed schedules, use of company equipment).
• They are financially dependent on one client/employer.
• They receive regular wages rather than project-based compensation.

Penalties for Misclassification

• Back Taxes & Social Contributions: Employers may be liable for unpaid payroll taxes, pension contributions, and social security premiums.
• Fines & Penalties: Belastingdienst can impose penalties for non-compliance.
• Employment Rights: Misclassified workers may retroactively claim employee benefits (e.g., holiday pay, sick pay, severance).
• Reputational Risk: Misclassification can harm employer branding in the Netherlands’ competitive labor market.

Gloroots helps companies avoid these risks by offering compliant hiring solutions. Through our Employer of Record in the Netherlands, we ensure correct worker classification, issue compliant contracts, and manage payroll and benefits in line with Dutch law.

Misclassification Risk: Direct Entity vs. Gloroots EOR in the Netherlands

Q. How does an EOR help you run payroll in the Netherlands?

Payroll in the Netherlands is highly regulated, with strict requirements on tax withholding, social security contributions, and reporting obligations. Employers must comply with both national labor laws and applicable collective bargaining agreements (CAOs/CBAs), which often define industry-specific wage scales, allowances, and overtime rules.

Payroll Compliance Requirements in the Netherlands

• Salary Payments
  • Wages must be paid monthly in euros, with payslips showing gross pay, deductions, and net salary.
• Tax Withholding
  • Employers must apply progressive income tax rates (up to 49.5% in 2024).
  • Withholding is based on employee-specific tax codes issued by the Dutch Tax and Customs Administration (Belastingdienst).
• Employer Contributions (~27–30% of salary)
  Employers must pay significant contributions in addition to gross wages, including:
  • National Insurance (AOW, ANW, WLZ).
  • Unemployment Insurance (WW).
  • Health Insurance contributions.
  • Occupational disability funds.
• Employee Contributions
  • Deductions include income tax, national insurance, and health insurance premiums.
• Holiday Allowance
  • Employers must pay a mandatory holiday allowance of 8% of annual salary, usually in May or June.
• CBA Obligations
  • Many CBAs mandate additional allowances (e.g., transport, training funds) that must be integrated into payroll.
• Reporting
  • Employers must submit payroll data monthly to the Dutch Tax Office (Belastingdienst).

How Gloroots Simplifies Payroll in the Netherlands

With Gloroots as your Employer of Record in the Netherlands:

• We process salaries accurately and issue compliant payslips in Dutch and English.
• We handle tax withholding and remit payments directly to Belastingdienst.
• We manage all employer contributions (27–30%) and employee deductions.
• We calculate and pay the mandatory 8% holiday allowance.
• We ensure compliance with CBAs, integrating sector-specific payroll rules.
• We file payroll reports on time, minimizing compliance risks.

This ensures employees are paid accurately and on time, while employers remain fully compliant with Dutch payroll laws.

Payroll in the Netherlands: Direct Entity vs. Gloroots EOR

Q. How does tax compliance work in the Netherlands?

The Netherlands has one of the most structured tax systems in Europe, with progressive income tax, high employer contributions, and strict reporting obligations. Employers are responsible for withholding taxes and contributions directly from employee salaries and remitting them to the Dutch Tax and Customs Administration (Belastingdienst).

Personal Income Tax in the Netherlands (2024)

Income tax is levied under Box 1: Income from Work and Home.

• Up to €75,518: 36.97%
• Above €75,518: 49.50%

This includes both state and social security contributions. Employees also contribute to pension schemes, unemployment insurance, and health insurance.

Employer & Employee Contributions

Employer Contributions (~27–30% of gross salary):

• National Insurance (AOW – old-age pension, ANW – survivor’s benefits, WLZ – long-term care).
• Unemployment Insurance (WW).
• Health Insurance (ZVW contribution).
• Disability & accident insurance.
• Sectoral funds (training, pensions) as required by CBAs.

Employee Contributions (deducted from salary):

• Income tax (progressive rates).
• National Insurance premiums.
• Employee health insurance premiums (basic coverage is mandatory in the Netherlands).

Reporting Obligations

• Employers must file monthly payroll tax returns with Belastingdienst.
• All contributions must be remitted promptly to avoid penalties.
• Annual income statements must be issued to employees (jaaropgave).

How Gloroots Simplifies Tax Compliance in the Netherlands

With Gloroots as your Employer of Record in the Netherlands:

• We ensure accurate tax withholding and contributions for each employee.
• We manage employer contributions (27–30%) and integrate CBA-specific obligations.
• We file monthly returns with Belastingdienst and issue annual income statements.
• We ensure compliance with Dutch payroll and tax laws, reducing the risk of audits or penalties.

Tax Compliance: Direct Entity vs. Gloroots EOR in the Netherlands

Q. What benefits and entitlements do employees in the Netherlands receive?

The Netherlands provides employees with strong statutory benefits, supplemented by sector-specific entitlements through collective labor agreements (CAOs/CBAs). Dutch law prioritizes worker protections, ensuring employees receive paid leave, social insurance, pension contributions, and holiday allowances. Many employers also offer additional perks to stay competitive in the highly skilled Dutch labor market.

Core Statutory Benefits in the Netherlands

• Annual Leave
  • Employees are entitled to a statutory minimum of 20 vacation days per year (based on a 5-day work week).
  • CBAs often increase this to 25–30 days.
• Holiday Allowance
  • Employers must pay a mandatory holiday allowance of 8% of annual salary, usually in May or June.
• Public Holidays
  • Employees receive up to 11 national public holidays, though entitlements may vary by CBA.
• Sick Leave
  • Employers must pay at least 70% of salary for up to 104 weeks (2 years) of sickness.
  • Many CBAs require 100% pay for part of this period.
• Maternity & Paternity Leave
  • Maternity leave: 16 weeks, fully paid (covered by social security).
  • Paternity/partner leave: 1 week fully paid, plus 5 weeks at 70% pay (funded by social security).
• Pensions
  • The Netherlands has a strong state pension (AOW) system.
  • Most employees are also covered by industry-wide pension schemes under CBAs.
• Health Insurance
  • Employees must purchase basic health insurance (~€130/month), with employers typically reimbursing or providing allowances.
• Other Benefits
  • CBAs often mandate meal allowances, commuting reimbursements, training funds, and group insurance schemes.

With Gloroots as your Employer of Record in the Netherlands, you can provide employees with statutory benefits and competitive perks while ensuring compliance with Dutch law and CBAs.

Benefits & Entitlements: Direct Entity vs. Gloroots EOR in the Netherlands

Q. What’s involved in hiring and onboarding employees in the Netherlands?

Hiring in the Netherlands requires strict compliance with labor laws, tax registrations, and collective labor agreements (CAOs/CBAs). Employers must issue compliant contracts, register employees with the Dutch tax office, and integrate benefits and payroll requirements from day one.

Key Steps in Hiring & Onboarding Employees in the Netherlands

1. Drafting the Employment Contract
   • Must be in writing, specifying role, salary, benefits, probation, and termination terms.
   • Contracts must comply with Dutch Civil Code and applicable CAOs.
2. Probationary Period
   • Maximum: 2 months for permanent contracts, 1 month for temporary contracts.
   • During probation, either party can terminate with immediate effect.
3. Registration with Belastingdienst
   • Employer must register new employees with the Dutch Tax and Customs Administration.
   • Employees must provide a BSN (citizen service number) and tax form (loonheffingsformulier).
4. Payroll Setup
   • Payroll must account for progressive tax withholding, employer contributions (~27–30%), and the 8% holiday allowance.
   • Any CBA entitlements (e.g., pension, allowances) must be integrated.
5. Health Insurance Compliance
   • Employees must take out basic health insurance within 4 months of starting work.
   • Employers typically provide reimbursements or allowances.
6. Occupational Health & Safety
   • Employers must provide employees with access to an occupational health service (Arbodienst) for workplace well-being.
7. Onboarding & Integration
   • Dutch workplaces value direct communication and independence.
   • Onboarding usually emphasizes clear role expectations, team collaboration, and compliance with company and sector CBAs.

With Gloroots as your Employer of Record in the Netherlands, we manage the entire process — from compliant contracts and payroll registration to benefits setup — so your employees are ready to work from day one.

Hiring & Onboarding: Direct Entity vs. Gloroots EOR in the Netherlands

Q. How do you successfully manage a workforce in the Netherlands?

Managing a workforce in the Netherlands requires balancing compliance with Dutch labor laws and collective labor agreements (CAOs/CBAs) with a management style that fits the country’s egalitarian and collaborative work culture. Dutch professionals value independence, directness, and work-life balance — and employers must reflect these values to retain top talent.

Key Considerations for Workforce Management in the Netherlands

• Work-Life Balance
  • Employees expect flexible hours, the right to part-time work, and respect for vacation time.
  • Remote and hybrid work are widely accepted.
• Flat Hierarchies
  • Dutch organizations typically operate with flat structures.
  • Decision-making is consensus-driven, with employees encouraged to voice their opinions openly.
• Direct Communication
  • Employees appreciate transparency and clear communication. Feedback is expected to be straightforward and constructive.
• Unionization & CBAs
  • A large share of the workforce is covered by CBAs, which set terms on wages, benefits, and working conditions. Employers must stay updated and compliant.
• Retention & Engagement
  • Highly skilled employees are mobile and in demand. Offering competitive packages with holiday bonuses, pensions, and professional development opportunities is key to retention.

With Gloroots as your Employer of Record in the Netherlands, you can manage your workforce effectively while we take care of compliance with CBAs, payroll, and HR regulations — allowing you to focus on employee engagement and business growth.

Workforce Management: Direct Entity vs. Gloroots EOR in the Netherlands

Q. What are the key steps and requirements in terminating employees in the Netherlands?

Termination in the Netherlands is highly regulated, with strong protections for employees under the Dutch Civil Code and collective labor agreements (CAOs/CBAs). Employers must follow formal procedures and demonstrate valid grounds for dismissal. Unlike in some countries, “at-will” termination does not exist in the Netherlands.

Key Termination Requirements in the Netherlands

• Grounds for Termination
  • Valid grounds include economic redundancy, long-term illness, poor performance (with proof of improvement plans), or serious misconduct.
  • Employers must document the justification for dismissal.
• Termination Procedures
  • UWV Procedure: Required for terminations based on economic reasons or long-term illness (after 2 years).
  • Cantonal Court Procedure: Required for dismissals due to personal performance or conduct issues.
  • Mutual Agreement: Employees and employers may agree to terminate via a settlement agreement (vaststellingsovereenkomst).
• Notice Periods
  • Based on years of service:
    • 1 month (0–5 years)
    • 2 months (5–10 years)
    • 3 months (10–15 years)
    • 4 months (15+ years)
  • Employees must give 1 month’s notice unless otherwise agreed.
• Severance Pay (Transition Payment)
  • Employees are entitled to a transition payment equal to 1/3 of monthly salary per year of service.
  • Pro-rated for partial years.
• Probationary Period
  • Termination during probation (1–2 months) is allowed with immediate effect, provided it is not discriminatory.
• Special Protections
  • Employees on maternity leave, sick leave (first 2 years), or works council members have additional protections against dismissal.

Gloroots helps companies navigate these strict rules by ensuring compliance with notice, severance, and procedural requirements, minimizing the risk of disputes.

Termination in the Netherlands: Direct Entity vs. Gloroots EOR

Q. What is the offboarding process in the Netherlands?

Offboarding in the Netherlands is a structured process that must align with the Dutch Civil Code and applicable collective labor agreements (CAOs/CBAs). Employers must ensure proper settlements, documentation, and compliance with statutory obligations. A mishandled offboarding can lead to disputes, fines, or legal claims.

Key Steps in Offboarding Employees in the Netherlands

1. Notice of Termination
   • Written notice must clearly state the termination grounds, notice period, and effective end date.
2. Final Payroll & Settlements
   • Employers must process:
     • Final salary up to the termination date
     • Accrued but unused vacation days (paid in cash)
     • Transition payment (severance pay, unless exempted by mutual agreement)
     • Any outstanding allowances (e.g., holiday allowance, bonuses under CBAs)
3. Documentation
   • Employers must issue:
     • Certificate of Employment (dienstverbandverklaring), confirming role and employment dates
     • Final payslip and settlement statement
     • Statement of pension rights
4. Social Security & Tax Filings
   • Final salary and contributions must be reported to the Belastingdienst via payroll tax returns.
5. Return of Company Assets
   • Laptops, phones, access badges, and other company property must be returned.
6. Exit Interviews & Handover
   • Many Dutch employers conduct exit interviews to capture feedback and ensure smooth knowledge transfer.
7. Immigration Compliance (if applicable)
   • For non-EU employees, employers must notify the IND (Immigration and Naturalisation Service) and ensure proper visa cancellations.

With Gloroots as your Employer of Record in the Netherlands, we handle all aspects of compliant offboarding — from payroll settlements to visa cancellations — ensuring smooth and risk-free exits.

Offboarding in the Netherlands: Direct Entity vs. Gloroots EOR

Q. What costs and financial planning do you need with an Employer of Record in the Netherlands?

Hiring in the Netherlands requires careful budgeting beyond base salaries. Employers must account for high social security contributions, the mandatory holiday allowance, severance payments, and CBA-driven perks. For companies establishing their own entity, additional costs such as incorporation, payroll systems, and HR compliance staff further increase expenses.

Key Employment Cost Considerations in the Netherlands

• Base Salary
  • Salaries are benchmarked against industry-specific CBAs, which often set minimum wage scales higher than the statutory minimum.
• Employer Contributions (~27–30% of gross salary)
  • National Insurance (AOW, ANW, WLZ)
  • Unemployment Insurance (WW)
  • Health Insurance contributions
  • Disability insurance
  • Sectoral funds (training/pensions) under CBAs
• Holiday Allowance
  • Employers must pay 8% of annual salary as a mandatory holiday allowance.
• Vacation & Sick Leave Costs
  • Employers cover statutory vacation days (20+ days) and up to 2 years of sick leave at 70% salary (CBAs may require higher coverage).
• Severance Pay (Transition Payment)
  • Employees are entitled to 1/3 of monthly salary per year of service when terminated.
• Administrative Overheads (Direct Entity only)
  • Incorporation fees, notary costs, payroll software, tax advisors, HR staff, and ongoing compliance management.

With Gloroots as your Employer of Record in the Netherlands, you gain a predictable and transparent cost structure. Our EOR fees include payroll, benefits administration, and compliance management, reducing financial uncertainty and freeing you from hidden overheads.

Cost Planning: Direct Entity vs. Gloroots EOR in the Netherlands

Q. What challenges might you face, and how do you solve them using EOR in the Netherlands?

The Netherlands is one of Europe’s most attractive markets for global employers, offering a highly skilled, multilingual workforce and a strong business ecosystem. However, employers face legal, financial, and administrative challenges that can slow down expansion or increase compliance risks.

Common Challenges in Hiring & Managing Employees in the Netherlands

1. Complex Collective Labor Agreements (CAOs/CBAs)
   • CBAs cover wages, benefits, and working conditions across sectors. Non-compliance can result in penalties or disputes.
2. High Employment Costs
   • Employer contributions (~27–30% of salary), holiday allowance (8%), and sick leave obligations make total employment costs significantly higher than gross salaries.
3. Strict Termination Rules
   • Employers must prove valid grounds and follow formal procedures through the UWV or cantonal courts. Severance (transition payments) is mandatory.
4. Payroll & Tax Compliance
   • Employers must withhold progressive income taxes, apply CBA rules, and submit monthly filings to the Belastingdienst.
5. Administrative Burden
   • Setting up an entity requires incorporation via a notary, ongoing compliance filings, and in-house HR/legal resources.

How Gloroots EOR Solves These Challenges

Gloroots simplifies hiring and workforce management in the Netherlands by acting as your local Employer of Record:

• We ensure CBA compliance in contracts, payroll, and benefits.
• We manage payroll, taxes, and contributions end-to-end.
• We handle terminations and severance in line with Dutch law, reducing legal risk.
• We sponsor work visas for non-EU employees under our Dutch entity.
• We provide transparent EOR fees to simplify cost planning.

This allows employers to expand quickly, compliantly, and without the administrative burden of entity setup.

Challenges in the Netherlands: Direct Entity vs. Gloroots EOR

Conclusion

The Netherlands offers global employers a highly educated, multilingual workforce, a strategic location in Europe, and a business-friendly ecosystem. However, companies must navigate complex CBAs, high employer contributions, strict termination rules, and rigorous payroll/tax compliance.

By partnering with Gloroots as your Employer of Record in the Netherlands, you can access top talent quickly and compliantly without setting up a local entity. From payroll and tax filings to visa sponsorship and benefits administration, Gloroots simplifies workforce management so you can focus on growth.

Gloroots makes hiring in the Netherlands faster, compliant, and cost-efficient.