Expanding your business into the Netherlands, or hiring Dutch talent remotely, can be a smart move. The country offers a highly skilled workforce, strong legal protections for employees, and a business-friendly environment.
But if you’re not planning to open a legal entity in the Netherlands, an Employer of Record (EOR) is your best route.
In this guide, we’ll break down:
- What an EOR is and how it works in the Dutch context
- Why companies use EORs in the Netherlands
- Key employment laws and payroll practices to know
- What to look for when choosing a Dutch EOR partner
- The best EOR providers serving the Netherlands
What Is an Employer of Record (EOR)?
An Employer of Record (EOR) is a third-party company that officially employs workers on your behalf in a country where you don’t have a legal presence. You manage the employee’s day-to-day work, but the EOR handles all the legal and administrative responsibilities.
This includes:
- Complying with Dutch labor laws
- Running payroll and tax withholdings
- Managing benefits, contracts, and insurance
- Handling terminations and severance
Think of it as a shortcut, you get the benefits of hiring locally without having to set up a Dutch legal entity.
Why Use an EOR in the Netherlands?
The Netherlands is a top destination for remote hiring and global expansion, but it has strict employment laws and local payroll requirements. Here’s how an EOR can help:
1. Avoid Setting Up a Dutch Entity
Creating a local business in the Netherlands can take weeks, and you’ll be required to register with multiple government agencies. An EOR lets you bypass all that and start hiring within days.
2. Stay Compliant with Dutch Labor Law
Dutch employment law strongly protects employees. An EOR helps you avoid costly legal mistakes related to:
- Fixed-term vs. indefinite contracts
- Notice periods and probation rules
- Vacation and sick leave policies
- Social security and tax contributions
3. Handle Payroll, Benefits, and Tax
Running payroll in the Netherlands is complex. Employers must contribute to several public funds and withhold taxes accurately. An EOR handles all of this for you, including:
- Withholding income tax (Loonbelasting)
- Paying social security (Sociale Verzekeringen)
- Managing holiday allowance (Vakantiegeld)
- Providing statutory benefits and pensions
Key Employment Facts in the Netherlands
Here are some essential things to know if you’re hiring Dutch talent through an EOR:
Employment Contracts
- Contracts must be written in Dutch or English.
- Dutch law limits the number of fixed-term contracts before a permanent contract is required (usually 3 in 36 months).
Notice Periods
- Employees must give 1 month’s notice, while employers often have to give 1 to 4 months, depending on tenure and contract terms.
Vacation and Holidays
- Minimum of four times the weekly working hours (e.g., 20 days for full-time roles), plus public holidays.
- A vacation allowance of 8% of gross annual salary is required by law.
Sick Leave
Employers must pay at least 70% of salary for up to 2 years of sick leave. This is a major reason why EORs are helpful, they absorb and manage this obligation.
Maternity and Parental Leave
- Mothers receive at least 16 weeks of paid maternity leave, funded by the Employee Insurance Agency (UWV).
- Fathers and partners get 1 week of paid leave, with an option for 5 more weeks unpaid (but compensated by social insurance at 70%).
Tax and Social Contributions
Employers in the Netherlands typically pay around 18–25% in social charges. This covers:
- Unemployment insurance (WW)
- Health insurance contributions
- Pension premiums
- Disability and long-term illness coverage
What to Look for in a Dutch EOR Provider
When evaluating EOR services in the Netherlands, focus on the following:
Dutch Legal Expertise
Choose an EOR that deeply understands Dutch labor law, tax regulations, and collective labor agreements (CAOs), which are common in certain sectors.
Payroll Accuracy & Timeliness
Look for providers with a proven local payroll system and experience handling Dutch reporting, such as LOONAANGIFTE (wage tax returns).
Employee Support in Dutch
Dutch employees expect clear communication in their language. A strong EOR will offer localized onboarding, HR helpdesks, and compliant benefits plans.
Transparent Pricing
Avoid EORs with hidden admin fees or vague benefit markups. Ask for a clear breakdown of costs: base salary, social charges, EOR margin, and any extras.
Data Security & GDPR Compliance
The Netherlands enforces the EU’s strict data protection laws. Make sure your EOR provider is fully compliant with GDPR.
Final Thoughts
Hiring in the Netherlands offers great potential, but also complex legal requirements. An EOR simplifies this process, giving you a fast, compliant way to onboard Dutch talent without setting up a local company.
The right EOR will not only handle admin but also protect your business from legal risk and ensure your Dutch team feels supported and cared for.
Whether you’re hiring one employee or building a distributed team across Europe, make sure you partner with a provider that understands local laws, cultural expectations, and payroll obligations.
