- Overview: Netherlands
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Employer of Record (EOR) in the Netherlands
What Is a Global Employer of Record?
A Global Employer of Record is a solution for companies that want to expand their business globally by hiring employees in other countries. With this model, companies partner with a Global EOR provider who acts as the legal employer of their international workforce, managing all HR, payroll, tax, and compliance matters in the countries where the employees are located.
The Global EOR model allows companies to tap into a larger, more diverse talent pool without requiring extensive legal and administrative infrastructure in every country they operate. By partnering with a Global EOR provider, companies can minimize risk and liability, reduce operational costs, and focus on their core business activities.
This innovative talent engagement model is gaining popularity due to the increasing complexity of global employment regulations and the need for streamlined, efficient HR models. The Global EOR model offers a single point of contact for all employment-related matters, eliminating the need for multiple local vendors.
From Payroll to Immigration: How a Global Employer of Record Can Replace Multiple Local Vendors
In today’s globalized business world, expanding your company’s operations into new markets means facing many new challenges. One of the international employers’ biggest challenges is ensuring compliance with local employment and tax regulations. This often means working with multiple local vendors such as payroll companies, employee benefits brokers, HR consultants, background checks vendors, IP attorneys, tax advisors, translation services, legal advisors, immigration advisors, and HR compliance advisors. Managing multiple vendors can be time-consuming and costly, and it can take a lot of effort to ensure each vendor provides the necessary services to support your business’s growth. That’s where a Global Employer of Record (EOR) can come in handy.
A Global Employer of Record can replace multiple local vendors while reducing your selection vetting and due diligence effort. Here’s how:
|Services Provided||Traditional Approach (Using Multiple Vendors)||Global EOR Approach|
|Payroll||Working with a local payroll company||Managed by the Global EOR|
|Employee Benefits||Working with an employee benefits broker||Managed by the Global EOR|
|HR Consulting||Working with an HR consultant||Managed by the Global EOR|
|Background Checks||Working with a background checks vendor||Managed by the Global EOR|
|IP Attorney||Working with an IP attorney||Managed by the Global EOR|
|Tax Advisor||Working with a tax advisor||Managed by the Global EOR|
|Translation Services||Working with a translation service||Managed by the Global EOR|
|Legal Advisor||Working with a legal advisor||Managed by the Global EOR|
|Immigration Advisor||Working with an immigration advisor||Managed by the Global EOR|
|HR Compliance Advisor||Working with an HR compliance advisor||Managed by the Global EOR|
As shown in the table, a Global EOR can provide all the necessary services to support your business’s growth, from payroll and employee benefits to legal and immigration advice. By working with a single provider, you can reduce the time and effort required for vetting and due diligence, allowing you to focus on expanding your business in new markets.
Global Employer of Record in the Netherlands: One-Stop-Shop for Your Hiring Needs
Compliance and legal guidance at every step of the Global Employment Journey. 24/7 local support.
2. Global Mobility
5. Payroll Administration
6. Working Time & PTO Processing
7. Benefits Administration
8. Tax Administration & Reporting
|Talent skilled in highly-specialized areas||Employee Work Visa and Work Permit sponsorship||Health checks||Employment Agreement drafting||In-country registration with statutory bodies||Working hours||Mandatory Benefits||Tax Reporting frequency and requirements;||Employment agreement termination:|
|Executive search||Dependent Visa||Criminal record checks||Compliant worker onboarding on your behalf||Day-to-day payroll management||Overtime||Health insurance||Employer taxes & contributions||Dismissal – by the employer|
|Contingency workforce||Visa extension||Background checks||Account setup in the payroll and HR system||Monthly pay slips or other pay frequency||Public holidays||Workers’ compensation||Employee taxes & contributions||Resignation – by the employee|
|Application for a sponsor license for a foreign national||Education checks||Employee data entry and records maintenance||Accruals||Annual leave||Unemployment insurance||Withholding tax||Termination by mutual agreement|
|Relocation assistance||Managing probation periods||Allowances||Parental leave||Voluntary Benefits||Local tax payments and reporting to local authorities||Notice period handling|
|13th and 14th salary||Sick leave||Share plans for executives||End of financial year reporting||Final settlement & severance payments|
|Additional leave||Bonuses & Equipment provision||De-registration with statutory bodies|
|Expenses reimbursement & business trip processing|
|Health insurance, dental treatment|
From Risk to Reward: How Global Employer of Record Mitigates HR Risks in the Netherlands
The Netherlands is a popular destination for foreign businesses looking to expand their operations. However, as with any foreign market, there are inherent risks that need to be carefully managed. When it comes to engaging talent in the Netherlands, there are several risks that companies need to consider, such as:
- Permanent Establishment risk;
- Employee Misclassification Risk;
- Under-taxation Risk;
- HR compliance Risk;
- Immigration Compliance Risk;
- intellectual property rights risk, vendor management, and vetting risk.
One way to manage these risks is to engage a Global Employer of Record (EOR) as the employer of record for the company’s employees in the Netherlands. An EOR assumes the legal responsibility for employing and managing workers on behalf of a company, which means that the EOR takes on the risks associated with employment, including those mentioned above.
For example, the risk of permanent establishment arises when a foreign company establishes a fixed place of business in the Netherlands, which can trigger Dutch corporate income tax obligations. By engaging an EOR, the foreign company can avoid creating a permanent establishment in the Netherlands. The Global EOR acts as the employer of record and assumes legal responsibility for complying with Dutch tax obligations.
Similarly, the risk of employee misclassification can be managed by engaging an EOR. Misclassification can occur when an employee is incorrectly classified as an independent contractor, leading to legal and financial liabilities for the company. A Global EOR can ensure that all employees are properly classified and that the company complies with Dutch labor laws and regulations.
Regarding HR compliance and immigration compliance risk, an Employer of Record can provide expert guidance and support to ensure the company complies with all Dutch employment laws, regulations, and immigration requirements for foreign workers.
Spotlight on the Netherlands
The Netherlands (also known as Holland) is a country located in northwestern Europe, bordering Germany to the east and Belgium to the south. It is a founding member of the European Union and the Eurozone, and its capital is Amsterdam.
Population: As of January 2023, the population of the Netherlands is estimated to be approximately 17.5 million people.
Labor Force: In 2021, the labor force in the Netherlands was approximately 9.5 million people. Industries: The top industries in the Netherlands include agribusiness, chemicals, creative industries, energy, horticulture, life sciences & health, logistics, and water management.
Trading partners: The Netherlands’ top import/export partners are Germany, Belgium, the United Kingdom, China, and the United States, respectively. Local currency: Euro.
Minimum wage: As of January 2023, the gross minimum wage for an employee aged 21 and older in the Netherlands is €1,750.40 per month. 13th/14th salaries: In the Netherlands, employees often receive a 13th and sometimes a 14th salary. The 13th salary is typically paid out in December, while the 14th is paid out in May or June.
Sample Employment Tax Calculation