Employer of Record Guide in 

Netherlands

Annual Leave (Vakantiedagen)

• Minimum Entitlement: 20 days per year (4 weeks) for full-time employees
• Accrual: 1.67 days per month worked
• Vacation Pay: Additional 8% of annual gross salary paid in May
• Carryover: Maximum 6 months into following year
• Payout: Must be paid out upon termination

Sick Leave (Ziekteverlof)

• Duration: Up to 2 years (104 weeks)
• Pay: Minimum 70% of salary (many employers pay 100%)
• First Year: 70% minimum, often topped up to 100%
• Second Year: 70% minimum
• Medical Certification: Required after 2 days of absence

Maternity Leave (Zwangerschapsverlof)

• Duration: 16 weeks total
  • 4-6 weeks before due date
  • 10-12 weeks after birth
• Pay: 100% of salary up to maximum daily benefit
• Job Protection: Position guaranteed upon return
• Partner Leave: Additional 1 week for partner

Parental Leave (Ouderschapsverlof)

• Duration: 26 weeks per parent (unpaid)
• Timing: Must be taken before child turns 8
• Flexibility: Can be taken part-time or in blocks
• Job Protection: Position guaranteed upon return
• Birth/Adoption Leave: 6 weeks paid leave for partners

Other Statutory Leave

• Caregiver Leave: Up to 6 weeks per year (unpaid)
• Emergency Leave: Reasonable time for family emergencies (paid)
• Bereavement Leave: No statutory requirement (employer discretion)
• Study Leave: Right to request time off for education

Summary

Termination Types

Dismissal for Cause (Ontslag op Staande Voet):

• Immediate termination without notice
• Requires serious misconduct
• No severance or notice pay required

Regular Dismissal:

• Requires permission from UWV (employment office) or court
• Must follow strict procedural requirements
• Notice period and potential severance required

Notice Period Requirements

Notice periods depend on length of service:

Severance Pay (Transitievergoeding)

Calculation:

• 1/3 month's salary per year of service (first 10 years)
• 1/2 month's salary per year of service (after 10 years)
• Minimum: €0 (no minimum threshold)
• Maximum: €89,000 or 1 year's salary (whichever is higher)

Dismissal Procedures

UWV Route (Most Common):

1. Request dismissal permission from UWV
2. Provide valid business or personal reasons
3. UWV decision within 8 weeks
4. If approved, give required notice

Court Route:

• Used for complex cases or disputes
• Longer process but more flexibility
• Court determines severance amount

Probationary Periods

• Maximum Duration: 2 months for permanent contracts
• Fixed-Term Contracts: 1 month (if contract > 6 months)
• Termination: Either party can terminate with 1 month notice during probation

Final Pay Requirements

• Final salary payment by next regular pay date
• Accrued vacation days must be paid out
• Vacation pay (8%) included in final settlement
• Severance pay (if applicable) within reasonable timeframe

National Public Holidays

Note: Liberation Day is only a public holiday every 5 years (2025, 2030, etc.) but is widely observed.

Holiday Pay Rules

• Entitlement: Employees must work the day before and after the holiday
• Pay Rate: Regular daily wage
• Working on Holidays: Double pay (regular wage + holiday premium)
• Part-Time Employees: Pro-rated based on normal working pattern

Regional Variations

While the Netherlands has national public holidays, some regions may observe additional local holidays or have different customs around holiday observance.

Required Documentation

Employment Contract (Arbeidsovereenkomst):

• Job title and description
• Salary and benefits
• Working hours and location
• Notice periods
• Probationary period (if applicable)

Government Registration:

• BSN (Burgerservicenummer) - Dutch social security number
• Tax registration with Belastingdienst
• Municipal registration (GBA/BRP)

Banking Setup:

• Dutch bank account for salary payments
• IBAN details for payroll processing

Work Authorisation

EU/EEA Citizens:

• Right to work without permits
• Must register with local municipality

Non-EU Citizens:

• Work permit (TWV) required
• Residence permit for stays > 90 days
• Highly skilled migrant scheme available for qualified professionals

Background Checks

• Certificate of Good Conduct (VOG): Required for certain positions
• Reference Checks: Standard practice but must comply with privacy laws
• Medical Examinations: Only permitted if job-related

Data Protection Compliance

• GDPR: Full compliance required for all employee data
• Privacy Impact Assessments: Required for extensive data processing
• Employee Consent: Must be obtained for data collection and processing
• Data Retention: Specific limits on how long employee data can be stored

Onboarding Timeline

What the EOR Handles

Borderless AI manages:

• Employment contract preparation and compliance
• Payroll setup and processing
• Tax registration and reporting
• Social security contributions
• Local labour law compliance
• Employee benefits administration

Worker Classification

The Netherlands has strict rules distinguishing employees from independent contractors:

Employee Indicators:

• Works under employer direction and control
• Uses employer-provided tools and equipment
• Integrated into company operations
• Fixed working hours and location

Contractor Indicators:

• Works independently with minimal supervision
• Uses own tools and equipment
• Serves multiple clients
• Flexible working arrangements

Risks of Misclassification:

• Back payment of social security contributions
• Tax penalties and interest
• Employee rights claims
• Potential criminal liability

Collective Bargaining Agreements (CAO)

Many Dutch industries are covered by collective agreements that may override standard employment terms:

• Coverage: Approximately 85% of Dutch employees
• Scope: Wages, working conditions, benefits, and procedures
• Binding Nature: Legally enforceable for covered employers
• Industry Examples: Healthcare, construction, retail, hospitality

Cultural Norms & Work Environment

Communication Style:

• Direct and honest feedback expected
• Flat organisational structures common
• Consensus-building approach to decisions

Work-Life Balance:

• Part-time work widely accepted (especially for parents)
• Flexible working arrangements common
• Long lunch breaks and early finish times typical

Diversity & Inclusion:

• Strong anti-discrimination laws
• Accommodation requirements for disabilities
• Gender pay gap reporting requirements

Remote Work Considerations

Legal Framework:

• Right to request flexible working arrangements
• Employer must provide written response to requests
• Health and safety obligations extend to home offices

Practical Considerations:

• Home office expense reimbursements common
• Equipment provision requirements
• Tax implications for cross-border remote work

COVID-19 Impact:

• Permanent shift toward hybrid working models
• Enhanced rights to work from home
• Updated health and safety protocols