Growing your company to the Netherlands means keeping up with new employment laws, including payroll. In addition to making sure all employees get paid on time, you must set up your Netherlands payroll according to all of the country’s local laws — all while you strive to hire a team and find physical office space.
Globalization Partners offers a different solution. As a global PEO, we’ll help you hire employees and establish your payroll without first opening a subsidiary. We can employ workers on your behalf and handle all payroll, tax, and compliance matters, so your only job will be to grow your company.
Taxation Rules in the Netherlands
The Netherlands has a robust social security system with programs covering all residents as well as employees’ insurance programs only for employees. Employers primarily fund employees’ insurance programs, but workers can contribute as well. These programs range from sick benefits to the Health Insurance Act. Employers should budget somewhere between 20% and 25% for these social security contributions.
Figuring out taxes for your employees can prove difficult in the Netherlands. The country has three different kinds of income “boxes” that have separate tax rates. Overall, income tax rates are progressive and depend on how much an employee makes.
Netherlands Payroll Options for Companies
You have three main options for setting up your Netherlands payroll. These include:
- Local Netherlands payroll outsourcing: If you do not have the time or resources to run your own payroll, you can contract with a local company in the Netherlands to outsource. With this option, you are still held liable for any mistakes the company makes.
- Internal payroll: If you run a larger company with more time and resources, you may be able to run internal payroll out of your office in the Netherlands. This Netherlands payroll option is more expensive and time-consuming.
- Global PEO: A global PEO is the only sure way to run your payroll and make sure you stay compliant. Globalization Partners will set up your Netherlands payroll and take on all the risk.
How to Set Up a Payroll in the Netherlands
If you decide to set up your Netherlands payroll yourself, you’ll need to follow several rules that depend on the type of business structure you use. All businesses that hire employees have to register with the Dutch Tax Authorities and get a payroll tax number. You’ll need to stay compliant with all income tax withholding and national insurance withholding laws as well.
One of the best ways to hire employees and set up your Netherlands payroll is to create a strong employment contract that outlines entitlement and termination terms. Employers can only terminate fixed-term employment agreements if they include the conditions in the employment contract. Also, employees who have worked for the same employer for at least 24 months must get a transition allowance based on their amount of service.
Payroll Processing Company in the Netherlands
Globalization Partners is the Netherlands payroll processing company you need to get started on the right foot. We’ll take the compliance off your shoulders and onto ours. Contact us today to learn more.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.