Hiring staff and payroll accounting Netherlands

Updated on 19 February 2024

Hiring staff involves more red tape than you might think. Here are the things you need to know if you are planning to take on some new employees.

You can only employ official staff if the person who works for your company meets several requirements. Someone is considered an employee when he or she:

- Has worked for your company for three consecutive months
- Worked for payment every week or at least twenty hours a month

Furthermore, there must be a certain authority relationship, wages must be paid, and an obligation to perform work. If your answer to all the above is 'yes', you can get started with the following things.

Payrolling needs to be performed in the country where the work takes place. If you have workers in The Netherlands, the payroll needs to be filled in The Netherlands.

Drafting an employment contract
First of all, you must agree on an employment contract with your potential staff member. In theory, this is allowed orally, but preferably in writing: that way, the agreements are clear to all parties. The following matters can or must be covered in the employment contract:

Name (initials, prefix, surname), date of birth, address and place of residence of the employee and name, address, place of residence of the employer
Place (s) where work is carried out
Employee's job title and primary duties
Time of entry into service
Duration of the employment contract (if it has been concluded for a definite period)
Holiday entitlements
Wages and payment period
Usual working hours (per week or per day)
Participation in a pension scheme (if applicable)
Whether the CLA applies (and which one it concerns)
Any probationary period
Notice period (or its calculation)
Incapacity for work and illness
Possible right of recourse
Identification obligation
Competition/relationship clause (only applicable for higher or specific positions)
Cost of personnel

In addition to the monthly gross salary of your staff, you may have to deal with additional costs for:

Holiday pay
Thirteenth month
Medical expenses
Education
Pension fund
Travel expenses

The existing collective labour agreement in your field plays a vital role in this. Almost all collective labour agreements contain agreements about the terms of employment for specific industries.

Determine wage costs
The wage costs for you are approximately 30% higher than the gross salary that your employee receives. After all, you also pay part of the insurance and other additional costs.

In addition to the pension, these are often the holiday pay (usually 8% of the gross salary) and the thirteenth month. This is subject to wage tax and premiums, which you must pay as an employer.

Paying pension contributions
Social insurances apply to every employee about pension rights (AOW and ANW). As an employer, you can offer additional pension provisions. You usually share the premium for this with the employee.

In most cases, this is already regulated in the collective labour agreement or the pension fund industry. You are obliged to report this to the new employee.

Payroll taxes and registration with the tax authorities
As an employer, you also have to deal with payroll taxes from the tax authorities. Payroll taxes are a collective term for:

Payroll tax / national insurance contributions
Income-related healthcare insurance contribution (Zvw)
Employee insurance premiums (WW and WAO / WIA)
You can find more information about this in the payroll tax manual. You will receive this from the tax authorities when you register as an employer. You can also view this manual online by downloading it from the Tax and Customs Administration website.

Maintain payroll
Apart from the contract mentioned above and tax obligations, there is also a lot of extra administration involved, particularly payroll.

Payroll administration consists of various forms and calculations. You have to think of forms such as the wage statement, the payslip and the annual statement. These are all forms that are important for calculating wages and amounts due.

But don't let all this put you off. There is plenty of advice available should you need it. Contact Intercompany Solutions for more information.