Overview

Capital
Amsterdam
Currency
Euro (EUR)
Date Format
dd/mm/yyyy

COVID-19

Employers who expect to lose 30% of their revenue for three consecutive months during the period of Jan 1, 2021 – June 30, 2021 due to the Covid-19 virus may be eligible for assistance through the Temporary Emergency Scheme for Job Retention (NOW). The scheme provides a contribution towards wage costs. 

Other measures include fixed cost grants to small businesses, loans, and loan guarantees. 

Taxes

Employer

Employer Payroll Tax

2.70% - 7.70%
Unemployment Insurance
7.03%
Health Insurance
0.5%
Child Care Pemium
7%
Health Care Act
22.23% Total Employment Cost
Employee

Employee Payroll Taxes

17.90%
Old Age Pension (AOW)
0.10%
Orphans and widow/widower pension (ANW)
9.65%
Long Term Care (WLZ)
27.65% Total Employee Cost

Employee Income Tax

9.70%
0 - 34.712 EUR
37.10%
34,712 - 68,507 EUR
49.50%
Over 68,507 EUR

Minimum Wage

General

The minimum monthly wage is €1,684.80 per month for any employee over the age of 21.

Payroll

Payroll Cycle

Monthly salaries must legally be paid before the end of the following month.

Where there is a Collective Labour Agreement in place a different payment deadline might be agreed.

13th Salary

Not required by Dutch law.

Working Hours

General

The majority of fulltime (voltijd) jobs in the Netherlands are between 36-40 hours a week, or seven to eight hours a day, five days a week.

Overtime

Dutch law does not provide a national standard for overtime; it is usually agreed upon by individual employment contracts and collective agreements.

Leave

Paid Time Off

Full-time employees (40 hours per week) in the Netherlands are legally entitled to a minimum of 20 days (four weeks) of paid holiday leave per year. This is based on a calculation of four times the number of hours worked per week. Many companies offer more than the minimum number of days, with 24 and even 32 days of annual leave being fairly common.

Employers are obligated to provide a holiday bonus of at least 8% of the employee’s gross salary. The bonus is usually paid in May or June.

Public Holidays

The Netherlands have 8 official public holidays.

Sick Days

The minimum sick leave entitlement in the Netherlands is a payment of 70% of their most recent wage level, up to a maximum period of two years. This is a generous benefit and does reflect the Netherlands’ social policy. Some employers will even pay 100% of the wages.

Maternity Leave

Expecting mothers are entitled to 4-6 weeks leave before birth, and 10 weeks of leave after birth.

If an employee takes less than 6 weeks of pregnancy leave before the birth, she is entitled to add the remaining amount (up to 2 weeks) to her maternity leave after the birth.

If the baby is born later than the due date, the employee’s maternity leave begins after the actual birth and the total may, therefore, be longer than 16 weeks.

Employers can apply for a maternity allowance on behalf of their employees to the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).

Paternity Leave

If the partner of an employee gives birth, the employee has a right to 1 week of paternity leave following the birth. Paternity leave is the number of working hours in one week. This paid leave can be taken any time in the first 4 weeks after the birth of the child. During this period of leave, the employer must continue to pay 100% of the employee’s salary.

As of 1 July 2020, employees will also be entitled to 5 weeks of unpaid leave in the first 6 months after birth. Employees who take unpaid leave will be able to claim benefits from the Employment Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) for up to 70% of their salary.

Parental Leave

Parents of children up to the age of eight are entitled to parental leave in order to be able to spend more time with their children. Parental leave is generally unpaid; however, some employers may partially cover some of the salary. Each parent may take off 26 times their weekly working hours.

Other Leave

Adoption leave: 6 weeks: Employers can apply for an adoption leave allowance on behalf of their employee to the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).

Emergency leave and other short absence leave: intended for unforeseen personal circumstances for which an employee has to take time off immediately, for instance, when making arrangements for the care of a sick family member or in the event of a death in the family. You must always grant a reasonable request for emergency leave. During this period of leave, the employee is required to continue paying the employee’s salary.

Short-term care leave: Maximum of 2 x the working hours of an employee in 12 months: During the period of leave, the employer continues to pay 70% of the employee’s salary. If this is less than the minimum wage, they pay the minimum wage.

Long-term care leave: Maximum of 6 x the working hours of an employee in 12 months: During this period of leave, the employer does not have to continue paying the employee’s salary.

Termination

Termination Process

In The Netherlands, the employer has generally five ways to terminate the employment agreement:

  • termination by mutual consent – by means of a settlement agreement;
  • termination proceedings before the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).
  • termination proceedings before the cantonal court.
  • termination with the consent of the employee
  • urgent dismissal
Notice Period

The length of the notice period for an employer depends on the duration of the employment contract, with a maximum of 4 months.

  • Less than 5 years: 1 month
  • Between 5 and 10 years: 2 months
  • Between 10 and 15 years:  3 months
  • 15 years or more: 4 months

The statutory notice period for an employee is 1 month.

Severance Pay

From the first day of employment, an employee is entitled to a severance payment (called a transition payment) in the event of dismissal at the initiative of the employer. The amount of the transition allowance for a Dutch employee is 1/3 monthly salary per entire year of service from the first working day.

Probation Period

The duration of a trial period depends on the duration of the employment contract. However, it may never exceed a 2 month period. The same period applies to both employer and employee.

Maximum of 1 month:

  • Temporary employment contracts of more than 6 months, but less than 2 years.
  • Temporary employment contracts without an end date.

Maximum of 2 months:

  • Permanent employment contracts.

VAT

General

VAT is 21% standard rate.

Version History

January 1, 2021
Employee Income Tax: For those earning 34,712 - 68,507 EUR, income tax dropped from 37.35% to 37.10%
Minimum wage: The minimum monthly wage rose to €1,684.80 per month for any employee over the age of 21.
Employer Payroll Tax: Unemployment Insurance dropped to 2.70% - 7.70%
Employer Payroll Tax: Health insurance rose to 7.03%

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