Employer of Record in the Netherlands: hire talent without an entity

The Netherlands punches above its weight in technology, logistics and life sciences. English is spoken fluently, Amsterdam’s airport is one of Europe’s best‑connected hubs and the start‑up ecosystem attracts talent from around the world. 

Yet building a Besloten Vennootschap (BV), learning the nuances of CAO (collective agreements) and registering with the Belastingdienst takes time and money. That’s where an Employer of Record (EOR) comes in. It lets you hire Dutch employees in days instead of months. You still manage the work, culture and goals, while the EOR handles contracts, payroll and compliance.

In this guide we outline what you can do with an EOR in the Netherlands, how much it costs, the key rules around contracts and termination, and immigration routes.

What you can do with EOR in the Netherlands

An EOR lets you hire employees in the Netherlands without setting up a local entity. You sign a service agreement with the EOR, they employ the individual under Dutch law and second them to you. Here’s what that enables:

• Onboard quickly: EORs maintain a Dutch BV and can add new hires in 48 hours for EU/EEA citizens. They prepare Dutch‑law compliant contracts (often bilingual) and help collect the right paperwork.

• Run compliant payroll: Payroll is typically processed monthly at the end of the monthl. The EOR calculates wage tax and social security, withholds contributions and files reports with the Belastingdienst.

• Offer local benefits: Dutch employees expect an 8% holiday allowance (vakantiegeld) and at least four weeks of statutory leave. EORs administer these benefits and can provide pension plans and supplementary health or disability insurance.

• Convert contractors to employees. If you’ve been working with a freelancer and want to reduce misclassification risk, the EOR can transition them into an employment contract while preserving their tenure where possible.

• Stay compliant with CAOs. Many sectors have collective agreements (CAO) that set minimum wages, extra holiday days or severance rules. An EOR tracks the applicable CAO and updates contracts and payroll accordingly.

• Manage terminations and sick leave. Should a dismissal become necessary, the EOR handles notice, transition payments and interactions with the UWV or court. During long‑term illness, they oversee reintegration plans and employer obligations.

Costs, payroll cycle and statutory benefits

One of the first questions employers ask is “How much does an EOR in the Netherlands cost?”. You pay the employee’s gross salary, employer social contributions, statutory benefits and the EOR’s fee. Here’s what to consider:

Employer contributions and payroll cycle

Payroll runs monthly. Employers pay contributions to funds like the General Unemployment Fund (AWf), the Disability Fund (Aof) and the Return to Work Fund. These rates depend on factors such as the permanence of the contract and the size of the employer.

Health insurance contributions under the Zorgverzekeringswet (Zvw), require employers to pay 6.51% on wages up to a capped base. Employees also contribute 5.26% through withholding. The EOR calculates these percentages each pay cycle, files returns with the Belastingdienst and issues payslips.

Total employer costs generally amount to 25–35% on top of gross salary, depending on age, contract type and CAO obligations. 

Holiday allowance and leave

Dutch law requires employers to pay an 8% holiday allowance on gross salary. Many companies pay it out in May or June, but instalments are possible if agreed in writing. Employees are also entitled to vacation leave equal to four times their weekly working hours that’s 20 days for a full‑time 5‑day week. Additional days may be stipulated in CAOs. Unused statutory days expire six months after the end of the year.

Parental leave is extensive. Parents can take 26 weeks of leave until the child turns eight, with nine weeks paid at 70% of their salary (capped at the daily wage) during the first year. Pregnancy and maternity leave last at least 16 weeks. Partners receive one week of fully paid leave plus up to five weeks at 70% covered by the UWV. 

The EOR ensures the right benefits are claimed and top‑up obligations under the CAO are met.

The 30% ruling

High‑skilled foreign employees recruited from abroad may qualify for the 30% tax facility. This allows employers to pay up to 30% of the salary tax‑free to cover extra living costs. 

From 2024, the scheme is phased: 30% for the first 20 months, 20% for the next 20 months and 10% for the final 20 months. For 2025, the salary threshold to qualify is €46,660 (or €35,468 for employees under 30 with a master’s degree), and the maximum untaxed allowance is €73,800. 

Your EOR can apply for the ruling with the tax authorities and monitor compliance.

Contracts, probation, notice and termination

Dutch employment law is employee‑friendly and emphasises predictability. Understanding the rules helps you avoid surprises.

Contracts and probation

Contracts must comply with Dutch law. Fixed‑term contracts may be renewed twice, but after three temporary contracts or three years, you must offer a permanent contract. Probation periods are allowed only when the initial term exceeds six months. The maximum probation is one month for fixed‑term agreements of six to 24 months and two months for permanent contracts or those longer than two years. 

No notice is required to terminate during probation, but both parties must act fairly and, upon request, provide reasons in writing.

Notice periods and termination procedures

Employees usually need to give one month notice unless a longer period is agreed. Employers must give at least one month's notice and add an extra month for every five years of service up to a maximum of four months. If the employee’s notice is longer than one month, the employer’s notice must be at least double. For fixed‑term contracts, you must inform the employee at least one month before expiry whether the contract will be extended.

Termination requires valid grounds. There are three main routes:

• Mutual agreement. Employee and employer sign a settlement agreement (vaststellingsovereenkomst); no UWV or court approval is needed.

• UWV approval. For dismissals due to economic reasons or long‑term incapacity, the employer must obtain a dismissal permit from the UWV. Without it, the dismissal is void.

• Sub‑district court. For reasons like under‑performance or irreparable conflict, the employer petitions the court (kantonrechter). Some CAOs provide sector‑specific dismissal committees.

When an employee is dismissed, they are entitled to a transition payment (transitievergoeding) of roughly one third of a month’s salary per year of service. The statutory cap is €98,000 in 2025 or a year’s salary if higher. The EOR calculates this payment, notifies the employee and reports to the authorities.

Visas and sponsorship options

Citizens of EU/EEA countries and Switzerland enjoy free movement and do not need a work permit. For non‑EU talent, there are several paths:

• Highly Skilled Migrant (Kennismigrant). To hire under this programme, the employer (or EOR) must be a recognised sponsor with the IND. 

Salary thresholds for 2025 exclude holiday allowance and are €4,171 for employees under 30 and €5,688 for those 30 or older. A reduced salary criterion of €2,989 applies to graduates from Dutch universities or within three years of their orientation year. The IND usually processes applications within a few weeks when filed by a recognised sponsor.

• European Blue Card: Requires a higher salary threshold (also €5,688 in 2025) and a recognised degree. It grants mobility rights across EU states, and the IND has a 30‑day legal decision period for recognised sponsors.

• Intra‑Corporate Transfer (ICT). For managers, specialists or trainees transferring within the same group. The ICT permit is valid for up to three years for managers and specialists or one year for trainees.

• Orientation year permit (zoekjaar). Recent graduates and researchers can work for one year to find a job. During that year they can be hired on a reduced HSM salary and later transition to the kennismigrant programme.

An important nuance: once the IND approves an application, new hires may start working while awaiting their residence card, up to four months after a positive notice. Apply for an endorsement sticker, which provides proof that you are awaiting a decision. 

Timelines and onboarding checklist

Hiring timelines depend on whether immigration is required:

• No immigration (EU/EEA hire). As soon as the contract is signed and payroll information is complete, the EOR can add the employee in a couple of days.
• With immigration. For Highly Skilled Migrants or Blue Card applicants, factor in the IND decision period (two to four weeks) plus time to collect biometric data and register at the municipality.

Here’s a practical onboarding checklist you can share with your new hire:

1. Municipality registration (gemeente). If living in the Netherlands longer than four months, the employee must register with the local municipality within five days of arrival to obtain a BSN (burgerservicenummer). For stays shorter than four months, they register as a non‑resident in the RNI.
2. Dutch health insurance. Every resident must purchase basic Dutch health insurance; coverage must begin from the legal start date and is mandatory within four months.
3. TB test (if required). Citizens of certain countries must complete a tuberculosis check within three months after receiving the residence permit
4. Payroll documents. Provide bank details, proof of identity, and tax withholding forms so payroll runs smoothly.
5. Optional: 30% ruling. If eligible, gather the necessary documents (employment contract, passport copies, proof of recruitment from abroad) and ask the EOR to apply.

Book the municipality appointment before arrival as some cities are busy. Without a BSN, employees cannot open a bank account or take out health insurance.

How can we at Jackson & Frank support you?

• Recognised IND sponsor. We are registered with the IND and audited annually, enabling us to file Highly Skilled Migrant and Blue Card applications quickly.

• NEN‑certified payroll. Our processes are audited by the Dutch Labour Standards Foundation (NEN), ensuring your payroll and HR data meet strict standards.

• CAO expertise. We analyse the applicable CAO for your sector, incorporate additional leave or pay requirements and advise you when new agreements are signed.

• Transparent pricing. You receive an itemised quote showing gross salary, statutory employer contributions and our flat fee. No hidden mark‑ups.

• Fast contractor conversions. We’ve helped many clients convert Dutch freelancers to employees while maintaining continuity of service.

• Hands‑on onboarding. Our team assists with BSN registration, health insurance, DigiD applications and 30% ruling forms so your talent starts strong.

Frequently asked questions

How fast can we hire in the Netherlands via an EOR? 

For EU/EEA nationals or residents with a BSN, onboarding can take as little as two business days once the contract and payroll data are in place. When immigration is required, allow two to four weeks for IND processing and municipal registration.

Who is the legal employer? 

The EOR’s Dutch BV is the legal employer. They hold the employment contract, file payroll taxes and pay the salary. Your company directs the employee’s day‑to‑day work and retains intellectual property rights.

Can we convert to our own entity later? 

Yes. You can transition employees from the EOR to your own Dutch entity. The employment contract will be novated to your BV, and accrued rights like tenure and holiday balance carry over. Our team advises on timing and cost implications so the switch is smooth.

What happens if we need to terminate? 

The EOR handles the procedure, ensuring legal grounds are documented and the correct route (UWV or court) is followed. They calculate the transition payment and include any CAO‑mandated allowances.

Do employees get the same rights as local hires?

Yes. An EOR employs staff under Dutch law, so they receive the same statutory benefits—holiday allowance, sick pay, pension, parental leave and dismissal protections—as someone hired directly. CAO provisions also apply.

Ready to hire?

The Netherlands offers a deep pool of multilingual, tech‑savvy talent. Using an Employer of Record means you can enter the market fast without the cost and complexity of establishing a local entity. 

If you’re ready to explore a budget, request a personalised quote or book a free 30‑minute consult to discuss your hiring plans.