What you'll learn
- Country Introduction
- Tax Breakdown for Employers
- Statutory Leave Laws
- Minimum Wage and Working Hours
- Termination Process
- Additional Information
The Netherlands is a country in northwestern Europe bordered by Germany and Belgium. The word “Netherlands” literally means "lower countries", in reference to the country’s low elevation and flat topography. The Netherlands ranks among the highest in the world for press freedom, economic freedom, human development, quality of life, and happiness.
Paid Leave and Statutory Leave
Parental Leave
Pregnant employees are entitled to 16 weeks of maternity leave, of which 4-6 weeks are taken before the due date, and at least 10 weeks are taken after the birth. The father or partner is entitled to 1 week of paid paternity leave after the baby is born.
Employees with children under the age of 8 can take unpaid parental leave up to 5 weeks (with an option to claim benefits from social insurance).
Sick Leave
There is no specific maximum number of sick days that can be taken, and employees are entitled to wages paid by the employer at 70% of the regular salary rate while they are sick.
Paid Leave
The Netherlands has 11 public holidays, and employees are entitled to at least 20 days of paid time off each year. Employees might also qualify for other types of leaves such as short-term care, adoption, and bereavement.
Wage Requirements and Working Hours
The minimum wage is EUR 1,934.40 per month for employees over the age of 21. The standard workweek is 40 hours at 8 hours per day, and should not exceed 45 hours. Overtime hours and pay are regulated by the employment contract or collective agreement.
Termination Process
Process
The termination process for employment contracts depends on any Employment Agreement or Collective Agreement in place, and the reason for termination. Terminations due to economic reasons or long-term disability cannot occur without involving the Employee Insurance Agency (UWV).
Notice Period
The notice period required for terminations varies based on the length of employment:
- 0-5 years = 1 month notice
- 5-10 years = 2 months notice
- 10-15 years = 3 months notice
- 15+ years = 4 months notice
Severance Pay
Severance pay is referred to as a transition payment and is usually stipulated in the employment contract. Employees are usually entitled to a payment calculated as 1/3 of the regular salary per year of employment (up to a maximum of EUR 84,000).
Additional Information
It's common for companies in the Netherlands to pay their employees a 13th month allowance in November or December of each year. The percentage is the same for all employees in the company and usually equals about 8.33% of the base salary. The Netherlands introduced a tax scheme that allows migrant workers to receive 30% of their income tax free for up to five years, helping them offset the cost of relocation and potentially higher cost of living. The program is intended to attract skilled workers to the Netherlands and keep Dutch employers competitive in a global marketplace.
★ 13.83% - Pension and Health Insurance
★ 3.97% - Unemployment Fund
★ 4.28% - Disability Insurance
★ 2.5% - Child Care Premium
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Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.
