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Public Holidays Calendar
|Saturday||Jan-1||New Year's Day|
|Monday||Dec-26||Second Day of Christmas|
Last updated: Feb 22, 2022
Payroll and Benefits Guide
Papaya Offers Complete Payroll, PEO and Contractor Management Services For Netherlands
Employer Payroll Contributions
Employee Payroll Contributions
Employee Income Tax
In The Netherlands, the minimum wage (wettelijk brutominimumloon) for employees 21 years and over is 1,725.00 EUR per month.
In the Netherlands, the payroll frequency is monthly. Work between the first and last day of the month is typically paid on the last day of the month.
A 13th-month salary is not mandatory, it’s up to the employer to give any additional salary/ bonus.
The standard working week in the Netherlands can be no longer than 45 hours, with an average being 40 hours per week/9 hours per day.
If work time limits are passed, overtime compensation is compulsory. The maximum number of overtime hours is per the employee’s collective agreement/employment contract.
Paid Time Off
A full-time employee is entitled to 20 days of paid annual leave per year. However, in the Netherlands, it is common practice to offer 24 and even 32 days of paid annual leave.
Also, in the Netherlands, any leave accrued from the previous year must be used by July, and the employer must inform the employee if this is about to expire (although this requirement is only for the statutory minimum number of days).
The Netherlands has 11 official public holidays.
If an employee is unfit to work due to sickness, they are entitled to 70.00% of their last earned salary for one year. For sickness that surpasses the year, the WULBZ (legal duty to continued payment of salary at sickness) becomes effective. This law enables the ongoing payment of salary for up to 104 weeks of sickness at (a minimum of) 70% of the salary. Some employers supplement this to provide 100% of the salary. However, this is only permitted in the first sickness year, and should the sickness continue into a second year the maximum paid is up to 70% of the salary.
A pregnant employee is entitled to 16 weeks of paid Maternity leave; Maternity leave consists of two periods: prenatal leave and postnatal leave.
- Prenatal leave: An employee must take 4-6 weeks leave before the expected due date (zwangerschapsverlof)
- Postnatal leave: A employee must take the remaining 10-12 weeks (bevallingsverlof)) which starts from the date of the birth of the child.
The Maternity pay can be paid by the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV). However, it is common practice for the employer to continue paying the salary and the UWV, in turn, pays the employer. Suppose pregnancy or childbirth results in incapacity for work. In that case, the employee is eligible for benefits equivalent to 100.00% of her salary for the maximum of a year after the date of birth.
The father/partner is entitled to 1 week of paid Paternity leave after the child’s birth.
Employees are also entitled to 5 weeks of unpaid leave in the first six months after birth; even though this is unpaid by the employer, they can claim up to 70.00% of their salary from the Employment Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).
In effect from August 2022, new parental leave will entitle new parents to 50 % of their wages for the first nine weeks of leave, guaranteeing all parents at least nine weeks of paid parental leave, paid for by the government, as long as the leave is taken during the first year of the child’s life.
Depending on the collective agreement/employment contract terms, an employee may be allowed additional leave types, on approved between the employer and employee, for the following:
- Short-term care: employees are entitled to up to two days of paid leave per year, although the payment will be 70.00% of the regular salary.
- Adoption leave: employers can apply for an adoption leave allowance of up to six weeks on behalf of their employee to the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).
The termination process varies according to how the Employment Agreement and Collective Agreement are in place and is based on the type of contract and reason for termination. However, no termination due to economic reasons or long-term disability can occur without the Employee Insurance Agency (UWV).
The statutory minimum notice period for termination in The Netherlands is one month however it is dependent on the employee’s length of service as below:
less than 5 years – 1 month notice
Between 5 & 10 years – 2 months’ notice
Between 10 & 15 years – 3 month’ notice
More than 15 years – 4 months’ notice
Severance pay in The Netherlands is referred to as transition payment and stipulated in the employment contract/collective agreement. In general, employees are entitled to a payment from their first day of employment when an employer terminates their employment agreement. The amount due for payment is calculated per the contract but at least at a rate of one-third of the regular salary income per year of service up to a maximum of 84,000 EUR.
Probation or Trial periods are generally set within the collective agreements and contracts of the employee; however, standard practice in the Netherlands is two months.
There is no formal requirement for EU/EEA/Swiss nationals to obtain a residence or work permit. Still, they do need to obtain a residence permit to be eligible for social security benefits.
Nationals of the USA, Canada, Japan, Australia, New Zealand, and all non-EU/EEA/Swiss foreign nationals who wish to stay longer than three months in the Netherlands must obtain an “authorization temporary stay” (MVV) from the Dutch embassy or consulate in their home country before entering the Netherlands.
The employer must submit a work permit application to the Social Security Office (UWV), providing evidence that they have made every effort to recruit a Dutch/EU/EEA/Swiss national in the first instance. No applicant is allowed to work in the Netherlands until their work permit has been approved.
The standard rate of VAT in The Netherlands is 21.00%.