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Employer of Record (EOR) in the Netherlands

VERDICT: The No. 1 Netherlands Employer of Record in 2024 is Horizons. With dedicated experts in the Netherlands, and a strong reputation as Europe’s leading EOR provider, Horizons can set up your Netherlands team within days. 

Key Takeaways

  • Netherlands Employers of Record (EORs) facilitate fast and cost-effective hiring in the Netherlands, without the requirement for a local entity. 
  • A Netherlands EOR manages complex legal and HR-related tasks, allowing businesses to focus on growth.
  • The top 5 Netherlands EOR companies in 2024 are Horizons, ThisWorks, Agility, Remote and Deel

An Employer of Record (EOR) in the Netherlands functions as a legal entity that hires and pays employees on behalf of an international company. Foreign businesses looking to operate in the Dutch market often employ this model to streamline the complexities associated with legal compliance, taxation, and human resources. 

Here, we explain how the Netherlands EOR model works and list the top 5 Netherlands EOR providers in 2024. 

What is an Employer of Record in the Netherlands? 

An Employer of Record is an organization that legally employs individuals on behalf of another company. In the Netherlands, an EOR becomes the official employer for tax purposes and is responsible for employing staff, administering payroll, withholding taxes, and ensuring compliance with Dutch employment legislation. This allows companies to operate in the Netherlands with a workforce while the EOR handles the complexities of local employment obligations and labor laws.

  • Employment Outsourcing: Companies outsource employment responsibilities to the EOR.
  • Compliance Management: The EOR manages adherence to local laws and regulations.
  • Payroll Processing: The Employer of Record handles employee remuneration and tax deductions.

Legal Framework in the Netherlands

The legal framework governing Employer of Record services in the Netherlands ensures that employment practices adhere to Dutch standards. If applicable, the EOR must comply with regulations such as the Dutch Civil Code, labor laws, social security legislation, and collective bargaining agreements.

  • Dutch Civil Code: Governs the employment contracts managed by the EOR.
  • Labor Laws: The EOR follows working hours, annual leave, and other employment conditions.
  • Social Security: Compliance with Dutch social security obligations is mandatory.
  • Collective Bargaining Agreements: Must be adhered to when applicable, affecting wages, working conditions, and more.

Employers of Record must navigate a complex interplay of laws and regulations to ensure legal employment within the Netherlands. This service is integral for businesses looking to expand their presence in the Dutch market without the legal and financial burdens of establishing a local corporate entity.

A Netherlands EOR is very similar to the concept of a Netherlands Professional Employer Organization (read more about that here). 

Top 5 Netherlands EOR Companies

The leading Netherlands Employers of Record in 2024 are:

  1. Horizons: Horizons can hire your Netherlands-based workforce in as little as 24 hours through their intuitive SaaS platform. With experts on hand in the Netherlands to support your hiring, as well as additional payroll, contractor, and recruitment services, Horizons is your complete Netherlands hiring solution
  2. ThisWorks: ThisWorks is an international EOR company with an especially strong presence in the Netherlands and Germany. As well as EOR and payroll services in the Netherlands, ThisWorks can also support your company with its entity establishment services in the Netherlands.
  3. AgilityEOR: AgilityEOR (Agility) is a global Employer of Record with a range of hiring solutions in the Netherlands, including payroll and staffing solutions alongside EOR. Agility is a people-centred EOR, placing an emphasis on stellar customer service. 
  4. Remote: Remote is a leading international EOR with a global network of wholly-owned infrastructure. Remote is especially useful for any company expanding into the Netherlands focused on 100 percent compliance.
  5. Deel: Deel is a global HR platform, providing EOR global mobility services both in the Netherlands and throughout the world. Deel is useful Netherlands partner for any company seeking to take advantage of its multiple HR and payroll app integrations. 

Advantages of Using an Employer of Record in the Netherlands

An Employer of Record (EOR) in the Netherlands offers distinct advantages for companies looking to expand their operations. Key benefits include streamlined market entry, mitigated legal risks, and enhanced cost management.

1. Ease of Market Entry

The EOR model simplifies the process of entering the Dutch market. Companies can establish a presence quickly without setting up a local entity. EORs handle employee onboarding, payroll, and compliance with Dutch labor laws, accelerating the time-to-market.

2. Reduction of Legal Risks

EORs are well-versed in local legislation, which significantly lowers the risk of non-compliance for businesses. They ensure adherence to employment laws, tax regulations, and workers’ rights, shielding international companies from potential legal issues.

3. Cost Management

By leveraging an EOR, businesses can manage costs more effectively. Costs of setting up a local entity, such as legal fees, office space, and HR administration, are minimized. EORs offer a transparent fee structure for their services, making financial planning more predictable.

How Does a Netherlands Employer of Record Work?

An Employer of Record (EOR) in the Netherlands facilitates seamless employment processes, ensuring compliance with local labor laws and regulations for companies expanding into the Dutch market. They streamline the employee lifecycle management from hiring to payroll.

1. Employee Hiring Process

The Employer of Record manages the hiring process, from drafting compliant contracts to onboarding. They ensure that each employment contract adheres to the Dutch Employment Law, which includes stipulations for holiday allowance, notice periods, and termination requirements.

  • Contract Creation: Tailored to individual employee roles and ensuring legal compliance.
  • Onboarding: Efficiently integrating new employees into the organization.

2. Payroll Processing

Employers of Record handle the payroll administration for their clients, meticulously managing the intricacies of the Dutch payroll system, characterized by precise calculations and timely payments.

  • Salary Calculations: Accurate computation that includes gross pay, overtime, bonuses, and deductions.
  • Monthly Payroll Cycle: Ensuring punctual and correct salary disbursements.

3. Tax Withholding and Reporting

Accurate tax withholding and reporting are critical, and the EOR is responsible for navigating the complexities of Dutch tax law.

  • Tax Withholding: Deducting the right amount of tax from employees’ salaries. The EOR will be familiar with crucial matters such as the Dutch 30 percent tax ruling for expats. 
  • Annual Reporting: Filing necessary employee tax documents with the Belastingdienst (Dutch Tax and Customs Administration).

4. Employee Considerations

When engaging with an Employer of Record in the Netherlands, employees should be meticulous about contracts and employment terms, aware of the benefits administration process, and understand their rights and protections under Dutch law.

5. Contracts and Employment Terms

Every employee in the Netherlands is entitled to a clear agreement covering the terms of employment. This document is essential as it outlines crucial job aspects such as job duties, salary, working hours, and notice periods. Employees should ensure that:

  • The contract specifies whether it’s for a fixed term or an indefinite period.
  • Any probationary period is in line with Dutch labor laws, which dictate a maximum of one or two months depending on the contract duration.

6. Benefits Administration

Benefits management is an integral part of the employment package in the Netherlands. Employees must understand their entitlements, which typically include:

  • Annual leave; a statutory minimum of 20 paid vacation days for full-time employees.
  • Holiday allowance; a legally required payment of 8% of the annual wage.
  • Pension contributions, medical insurance, and, often, travel expenses.

7. Employee Rights and Protections

Employees are shielded by a robust framework of rights and protections. Key provisions include:

  • Protection against unfair dismissal: Clear rules apply to the termination process, and employees often have the right to a severance payment.
  • Work-life balance: Regulations are in place to support parental leave, short-term and long-term care leave, and working part-time.
  • Anti-discrimination statutes: All employees have the right to work free from discrimination based on race, gender, religion, sexual orientation, or disability.

Establishing an Employer of Record in the Netherlands

Establishing an Employer of Record (EOR) in the Netherlands involves a systematic approach to ensure compliance with Dutch employment laws and regulations. The process demands diligent preparation of the necessary documentation and adherence to the country’s registration procedures.

1. Registration Process

To register as an Employer of Record in the Netherlands, one must initially register the business with the Dutch Chamber of Commerce (Kamer van Koophandel, KvK). This process involves:

  • Acquiring a Dutch business address.
  • Completing the KvK’s registration form can be done online or in person at a KvK office.

The company must register with the Dutch Tax Administration for an identification number.

2. Required Documents

The Dutch authorities require several key documents to establish an EOR, including:

  • Proof of identity of the company’s directors (valid passport or national ID).
  • Articles of Association that outline the nature and structure of the business.
  • Proof of address for the company’s office in the Netherlands.

It is necessary to provide these documents in either Dutch or English, and they must be certified if they originate from abroad.

3. Compliance and Regulations

Compliance with both labor and tax laws is critical when establishing an Employer of Record in the Netherlands:

  • Labor laws: The EOR must adhere to the Dutch Working Conditions Act and ensure fair employment practices per the Dutch Civil Code.
  • Tax regulations: The EOR should register for payroll taxes, and the company must comply with value-added tax (VAT) obligations.

Each sector may have specific collective labor agreements (CLA) that must be followed. Regular updates from the Dutch labor law must be monitored to maintain compliance.

Industries and Sectors Utilizing Employer of Record

Tech Startups and IT Services: The IT sector frequently engages Employer of Record (EOR) services due to the need for specialized talent across borders. Startups, in particular, use EORs to legally and quickly onboard remote developers and IT professionals, navigating the complexities of Dutch employment law.

Consulting Firms: Firms in the consulting industry use EOR services to manage short-term assignments in the Netherlands. This allows them to maintain a flexible workforce and manage the employment of consultants without setting up a legal entity in the country.

Creative Agencies: Creative sectors such as advertising, media, and design studios often collaborate with freelancers and contractors internationally. EOR services assist these agencies by employing creative professionals on their behalf and taking care of payroll and legal compliance.

Sales and Marketing Organizations: Companies aiming to expand their reach within the Dutch market utilize EORs to employ local sales and marketing experts. This strategy helps them to establish a presence and scale their operations without the overheads associated with creating a subsidiary.

Non-Governmental Organizations (NGOs): Many NGOs operate internationally and opt for EOR services to manage their local teams effectively. This ensures compliance with Dutch employment legislation and reduces the administrative burden associated with global operations.

Finance and Banking: Finance companies operating in the Netherlands without a local office often employ EORs. This allows them to have a team managing operations and complying with the strict regulatory environment without establishing a formal branch or subsidiary.

Engineering and Manufacturing: To handle project-based work within the Netherlands, companies in this sector leverage EOR arrangements. Such practices enable them to meet contract-specific labor requirements without permanent establishment risks.

EOR Challenges in the Netherlands

When engaging an Employer of Record in the Netherlands, companies must navigate a complex landscape of cultural nuances, strict local employment regulations, and rigorous data protection laws.

1. Cultural Differences

The Netherlands boasts a unique work culture that values work-life balance, direct communication, and consensus decision-making. Employers must be aware of these cultural expectations, as they can significantly affect employee engagement and productivity. For instance, Dutch employees typically appreciate direct feedback and a high level of autonomy.

2. Local Employment Laws

The Netherlands has stringent employment laws designed to protect workers. Some key considerations include:

  • Work Hours: A standard workweek in the Netherlands is legally restricted to 40 hours. Overtime regulations are strictly enforced, often requiring premium pay.
  • Minimum Wage: Employers must comply with the national minimum wage, updated semi-annually.
  • Termination Rules: Terminating an employment contract is subject to strict procedures and can be costly for employers without valid reasoning and documentation.

3. Data Protection and Privacy

Dutch data protection is governed by the General Data Protection Regulation (GDPR), which imposes:

  • Data Handling: Strict rules on collecting, processing, and storing personal data.
  • Data Subject Rights: Clear rights for individuals, including access to their personal data and the right to be forgotten.
  • Breach Notification: Mandatory reporting of data breaches within 72 hours of discovery.

Failure to adhere to GDPR can result in substantial fines, making compliance a critical consideration when choosing Employers of Record.

Future of Employer of Record Services in the Netherlands

The landscape for Employer of Record (EOR) services in the Netherlands is expected to evolve with the country’s advanced labor market and robust regulatory framework. Factors influencing this change include technology integration, regulatory compliance, and the growing demand for flexible work structures.

Regulatory Adaptation: As Dutch regulations adapt to the global work environment, EOR services must keep pace to ensure compliance. This includes staying abreast of labor laws, tax codes, and changes to workers’ rights.

Technological Advancements: EOR providers in the Netherlands will likely harness more sophisticated software solutions to streamline their services, including payroll processing, benefits administration, and employee onboarding. Automation and AI will be key tools in enhancing efficiency and accuracy.

Market Expansion: With a shift towards a gig economy and remote work trends, EOR services in the Netherlands may see a broader market, supporting companies employing international talent.

Enhanced Service Offerings: The demand for tailored EOR solutions to meet specific industry needs is expected to rise. EOR providers will expand services to address these demands, offering specialized expertise in various sectors.

The trajectory for EOR services in the Netherlands points towards greater integration with global employment standards, focusing on adaptability and strategic partnerships with businesses eyeing international expansion. The commitment to legal compliance and embracing technological tools will be paramount in shaping the future of EOR services in this region.

Netherlands EOR — Our Take

Choosing a Netherlands EOR company is an excellent way to save money and time, and ensure full legal compliance, when hiring employees in the Netherlands. Our picks for the best Netherlands EOR companies in 2024 are Horizons, ThisWorks, AgilityEOR, Remote and Deel

Netherlands Business Guides

Frequently Asked Questions

A Dutch EOR becomes the legal employer of your workforce in the Netherlands. They handle payroll and HR compliance, leaving you to focus on core business. 

A Netherlands EOR can save your business money by handling payroll and HR tasks more efficiently than you could with an in-house team. They also save you on the cost of establishing a Netherlands entity. 

A Netherlands Employer of Record (EOR) becomes the legal employer of your Dutch team, while a Netherlands PEO acts as the co-employer of your Dutch workforce. In practice, the terms are often used interchangeably.  

Travis is a global business development advisor. He has spent the last 14 years supporting business establishment and development in North America, Southeast Asia, and throughout the world. With multiple degrees from the University of Oregon, Travis currently splits his time between the US, and Bali, Indonesia. At RemotePad, Travis writes about remote work, hiring internationally and PEO/EOR business models.

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