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Payroll in NlNetherlands.






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Euro (€) (EUR)

Growing your company to another country, such as the Netherlands, requires deep knowledge on employment laws, including payroll. In addition to making sure all employees get paid on time, companies must abide by all of the country’s local regulations.

Taxation rules in the Netherlands

The Netherlands has a robust social security system as well as employees’ insurance programs. Employers primarily fund employees’ insurance programs, but workers contribute as well. These programs range from sick benefits to the Health Insurance Act. Employers should budget around 20% to 25% for these social security contributions.

The Netherlands has 3 different kinds of income “boxes” that have separate tax rates. Overall, income tax rates are progressive and depend on how much an employee earns.

The Dutch Tax Authorities (DTA) recognizes all payments of salary, holiday allowance, allowances, bonusses, and commissions as normal salary that needs to be taxed.

The Netherlands payroll options for companies

There are 3 main options for setting up a Netherlands payroll. These include:

  • Internal payroll: If you run a larger company, you may opt to handle payroll internally from your office in the Netherlands. This option often requires a substantial amount of time and money to understand and adhere to the Netherlands’ taxation and payroll laws.
  • Local payroll provider: If you do not have the time or resources to run your own payroll, you can work with a local payroll provider. Bear in mind that with this option, you are still held liable for any compensation issues that may arise.
  • Employer of Record: By partnering with an Employer of Record, such as G-P, companies can bypass local entity setup and start paying teams quickly and compliantly.

How to establish a payroll in the Netherlands

If you decide to set up a Netherlands payroll yourself, there are several rules that vary depending on the type of business structure you use. All businesses that hire employees have to register with the Tax and Customs Administration to obtain a payroll tax number. You’ll need to stay compliant with all income tax withholding and national insurance withholding laws as well.

Entitlement/termination terms

A key aspect to a successful hiring venture and compliant payroll in the Netherlands is a sound employment contract that outlines entitlement and termination terms. Employers can only terminate indefinite employment contracts if prior permission has been received from the Employee Insurance Agency (UWV) or the cantonal court. Also, employees are entitled to a transition allowance based on their length of service.

Streamline global payroll management with G-P.

G-P streamlines each step of the payroll management process with our market-leading Global Growth Platform™. Pay your team with confidence anywhere in the world in 150 currencies with our 99% on-time automated payroll system — all with just a few clicks. Our products also integrate with leading HCM solutions, syncing employee payroll data across platforms automatically to create one reliable, convenient source of truth for HR teams.

Contact us to learn more about how we can support you.


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.

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