The Netherlands hosts a vibrant, skilled workforce and offers outstanding infrastructure, making it highly attractive to companies looking to expand.

In this article, we’ll show you how to hire employees in the Netherlands, including navigating essential employment laws. We’ll also explain how using a workforce management platform like Payoneer Workforce Management can help make this process simple.

Hire employees in the Netherlands: Options for U.S. companies

There are several options open to U.S. companies hiring in the Netherlands. The best choice for your company will depend on your specific needs.

1) Set up a legal entity in the Netherlands

U.S. companies looking to hire in the Netherlands can choose to set up a legal entity locally. Having a registered office in the Netherlands allows companies to hire workers directly, just like a Dutch company would.

Setting up a legal entity allows straightforward hiring, but it’s not a quick or simple process. Registering your company with all the correct authorities in the Netherlands is expensive and time-consuming. 

If you’re ready to establish a base in the Netherlands with a significant workforce, setting up a local entity may be worthwhile. If you’re looking for fast, flexible hiring solutions and a global presence, other options may be a better fit for your needs.

2) Hire contractors in the Netherlands

If you have smaller projects with a limited scope, hiring employees in the Netherlands might not be necessary. You could hire individual contractors to complete the work instead. Using contractors provides maximum flexibility with minimal administrative burden.

However, contractors aren’t the solution to every problem. Large, complex, or critical projects are unlikely to be appropriate for contract work. 

It’s also important to note that, in the Netherlands, a contractor cannot receive more than 70% of their income from a single client.

Companies must be cautious about misclassifying workers as contractors. The Netherlands takes employee protections extremely seriously, and misclassifying employees as contractors attracts significant fines and other penalties.

If companies misclassify workers as contractors, the Dutch authorities may retroactively reverse this classification, requiring backpay for missed paid vacation days, pension contributions, and other benefits.

In addition to backpay, companies may have to pay significant fines. New legislation enacted in January 2025 imposes heavy fines, even for accidental misclassification of workers.

3) Use a workforce management platform

Typically, global companies use an Employer of Record (EOR) to engage talent in a new country; however, this model may not be applicable in the Netherlands. So, businesses may use a workforce management platform instead.

It supports quick talent onboarding, payroll, taxes, benefits and local compliance.

Partnering with a workforce management platform allows you to hire employees in the Netherlands without the expense of setting up a new legal entity. Plus, with support to manage compliance with local laws and regulations, they help reduce risks.

Read more about using a workforce management platform in the Netherlands.

Where to find employees in the Netherlands

The Netherlands has a highly educated, dedicated, and skilled workforce, but it also has some of the lowest levels of unemployment in Europe. To hire the right candidates, you need to find them and catch their eye first. Here’s how to find talent in the Netherlands.

Popular job boards in the Netherlands

The first step to finding great talent is to advertise. Although the workforce in the Netherlands overwhelmingly speaks English, Dutch-language employment boards may attract more applications.

Some of the most common job sites in the Netherlands include:

• Werk.nl
• Nationale Vacaturebank
• LinkedIn
• Indeed
• Randstad
• Monsterboard.nl 

Work with local recruitment agencies

Sometimes, you might need specialist help to find your perfect new hire. If you’re struggling to find the exact skill set you need, or if you need to find someone urgently, it might be helpful to work with a local recruitment agency.

A recruitment agency in the Netherlands will often be able to locate talent quickly and easily, and can be especially useful if you’re struggling with the language barrier.

Although using a recruitment agency is an effective strategy to find great talent, it does come with a cost. It’s important to factor recruitment fees into your calculations.

Recruit with the support of a workforce management platform

For companies seeking to maintain control over the recruitment process while minimizing administrative burdens, organising recruitment through a workforce management platform like Payoneer Workforce Management may help achieve a perfect balance.

While your business retains control of the recruitment process, including job descriptions, interviews, and candidate selection, giving you confidence that you’ve found the right person for your needs.

A workforce management platform assists with the finer details of recruitment, including employment contracts, onboarding, benefits, and payroll compliance. Your local hire can start work as quickly as possible, with less effort on your part.

Onboarding employees in the Netherlands

Onboarding employees is an essential task that helps you get the most out of the employees you hire in the Netherlands. A great onboarding process boosts productivity, employee satisfaction, and retention, and is important for compliance.

Here are some of the key tasks required for onboarding your new employee in the Netherlands.

• Perform necessary checks: Before your new hire can start work, you need to verify essential information, such as their identity, employment history, and ability to work legally in the Netherlands.
• Create an employment contract: Dutch employment contracts need to comply with local labor laws, including working hours, remuneration, and bonuses.
• Complete required documentation: When employing workers in the Netherlands, companies need to register for taxes, verify their health and safety policy, set up or verify social insurance and health insurance policies, and often arrange a pension plan.
• Prepare payroll and HR systems: Before asking your employee to start work, it’s also essential to have systems in place to pay them on time, provide their benefits, and handle annual leave requests, sick leave, and other HR tasks.
• Issue work devices and logins: Your new hire should have everything they need before their first day. This includes equipment, authorizations, and login credentials. 
• Provide training materials: Training materials should include company-specific and role-specific information that will help a new hire settle in. For employees in the Netherlands, consider whether this training can be delivered bilingually.
• Plan for their first week/month/quarter: Reduce the time it takes for your new hire to become productive by having a plan for their first week, month, and quarter.

Some onboarding tasks, such as planning their first week, should usually be carried out in-house, as they reflect your company’s culture and values. Others, including background checks and documentation, may be carried out with the support of a workforce management platform.

Payoneer Workforce Management can offer support with creating employment contracts as per Dutch laws and customs, and assist with paperwork. This may give you more time to focus on the onboarding tasks that make a real difference to your new employee.

Key employment laws and requirements in the Netherlands

The Netherlands takes employment laws and employee protections extremely seriously. Here are some of the key employment laws you need to be aware of when hiring employees in the Netherlands.

Employment contracts

Employment contracts in the Netherlands can be temporary or permanent, but companies cannot keep employees on temporary contracts indefinitely. Contracts become permanent after either 3 consecutive temporary contracts or 3 years on a temporary contract.

Employment contracts must state:

• The type of contract (temporary or permanent)
• The start date of the contract and duration (if appropriate)
• The job title and role
• Base salary, additional benefits, bonuses, and other compensation
• Working hours, including overtime or shifts
• Vacation policies
• Details of any probationary period
• Termination policies, including notice periods and severance payments

Employee benefits

Mandatory employee benefits in the Netherlands can be more extensive than those in the U.S. Here are some benefits that are either legally required or culturally common:

• Vacation time: The minimum vacation leave is 4 weeks per year, but some industries require more, and employment contracts will often go beyond the minimum.
• Sick leave: Companies must pay employees at least 70% of their normal salary for the first two years of an illness.
• Parental leave: Mandatory parental leave in the Netherlands includes 16 weeks of maternity leave (6 weeks before birth and 10 weeks after birth), 6 weeks of partner leave (first week fully paid, remaining weeks partially paid through social security), and 6 weeks of adoption or foster leave (payment terms vary and are not always full pay).
• Holiday allowance: Dutch employees receive 8% of their salary as a holiday allowance, usually paid in May.
• 13th-month salary: Many companies in the Netherlands pay 1 month’s gross salary as a bonus, typically in December.
• Pension: Some sectors have mandatory pension schemes in the Netherlands. 
• Severance payment: Severance or “transition” payments are usually required if companies wish to terminate an employment contract.

Working hours and holidays

Normal working hours in the Netherlands are broadly consistent with the U.S., averaging 36 to 40 hours per week. Employees can be asked to work overtime, but this must be compensated and is subject to maximum limits.

Employees can work no more than 60 hours per week, but regular working hours should not average more than 48 hours per week over 16 weeks.

Employees must have at least 11 hours off between shifts on different days, and they must have at least a 36-hour continuous rest period each week.

Employees in the Netherlands are entitled to at least 4 weeks of paid vacation time per year. Some sectors have a binding Collective Labor Agreement (CAO) with a trade union, requiring additional vacation leave.

There are 10 public holidays in the Netherlands, but these are not always provided as additional time off. The CAO or employment contract will define which public holidays are considered time off.

Tax obligations

Companies hiring in the Netherlands must withhold payroll, income, and other key taxes and contributions. These include:

• Income tax: Rates range from 36.93% to 49.50%
• National insurance contributions: These pay for social security schemes like state pensions. Employers must withhold National Insurance contributions.
• Employee insurance contributions: Employees pay these contributions that pay for unemployment and disability. Rates are set by the government twice a year.

Termination and severance

Termination in the Netherlands usually requires employee consent, including a notice period of between 1 and 4 months, and severance pay. These terms must be laid out in the employment contract.

Where termination is for gross misconduct, companies must receive a dismissal permit from the authorities.

Payoneer Workforce Management helps hire employees in the Netherlands

The Netherlands offers outstanding talent, but it also has rigorous labor laws, especially around vacation leave, sick pay, and termination.

Payoneer Workforce Management helps companies navigate hiring employees in 160+ countries without needing to create a local legal entity.

Our unified platform offers everything you need to hire, pay, and manage a global workforce, including:

• Hire in days with onboarding support
• Run global, multi-currency payroll in a few clicks
• Compliance support with local employment laws
• Manage taxes, benefits, timesheets, and more

Request a demo today to learn how Payoneer Workforce Management can help your business in the Netherlands.

FAQs

1) What is the cost of hiring an employee in the Netherlands?

The cost of hiring employees in the Netherlands depends on the role, experience, region and skill set. However, recruiting through a workforce management platform might be a cost-effective option.

It may reduce the cost and complexity of working with a local recruitment agency or establishing a local entity, especially if you’re working to build a global presence.

2) What are the options for U.S. companies hiring in the Netherlands?

Companies hiring employees in the Netherlands have three main options:

• Create a local legal entity: Dutch-registered companies can hire freely, but registering is complex, time-consuming, and expensive.
• Hire contractors: Using contractors allows companies to hire Dutch workers, but requires care to avoid misclassifying employees as contractors.
• Use a workforce management platform: A workforce management platform helps onboard the talent you’ve identified on your behalf, allowing you to hire in the Netherlands without setting up a legal entity there.

3) What is the hiring process in the Netherlands?

There are strong similarities between how to hire in the Netherlands and in the U.S. Companies hiring in the Netherlands will go through the same stages, including:

• Recruitment: This includes advertising, shortlisting, interviewing, and making a formal offer.
• Admin and compliance: This includes setting up payroll, HR, and other systems.
• Onboarding: In addition to some admin and compliance tasks, onboarding includes providing training, equipment, and support to a new hire.

A workforce management platform helps reduce the administrative burden and reduces compliance risks, especially for U.S. companies employing Dutch talent.