Guide to Hiring in the Netherlands

Overview

The Netherlands has a progressive business climate and is well connected to the other major economies of Europe, making it an excellent country for business investment and sourcing multilingual and highly-skilled workers.

The INSEAD Global Talent Competitiveness Index (GTCI) 2025, which ranks countries based on the competitiveness and adaptability of their talent landscape, placed the Netherlands sixth globally. The ranking reflects the country's strong performance in attracting, developing and retaining skilled talent.

Meanwhile, the IMD World Competitiveness Ranking 2026 placed the Netherlands 8th globally, reflecting the country's strong performance across areas such as international trade, technological infrastructure, institutional framework and societal framework.

The Netherlands is home to a diverse range of internationally competitive industries. Key sectors include:

• Agrifood

• Chemicals

• Creative industries

• Energy

• Fintech

• High Tech Systems

• Information Technology and Technology Services

• Life Sciences and Health

• Maritime

• Supply Chain Solutions

• Water Technology

Dutch employment law is extensive, and regulations must be followed by any company that employs workers in the Netherlands, even if the organisation is registered in a different country.

This guide explains everything you need to know about hiring employees in the Netherlands.

Payroll and taxes

Employer contributions

Employer social security contributions in the Netherlands are subject to annual review and may vary depending on factors such as company size, contract type and sector. The figures below reflect the applicable rates for 2026.

Disability Fund (Aof)

• Small employers pay a contribution of 6.27%, while large employers pay 7.63%.

Unemployment Fund (Awf/WW)

• Employers pay a lower contribution rate of 2.74% for employees on permanent contracts and a higher rate of 7.74% for employees on flexible or temporary contracts.

Healthcare Insurance Act (Zvw) employer levy

• The employer contribution rate is 6.10%, applied up to a maximum contribution income of €79,409.

Work Resumption Fund (Whk)

• Contribution rates vary according to sector and employer profile. The average contribution rate in 2026 is approximately 1.52%.

Sickness Benefits Act (ZW)

• There is no separate employer premium for the Sickness Benefits Act. These costs are incorporated into the Work Resumption Fund (Whk) contribution.

Childcare surcharge (opslag kinderopvang)

• Employers pay a childcare surcharge of 0.50%.

Ufo premium

• Public-sector employers pay an additional 0.68% contribution to the Ufo fund.

Note: Dutch payroll tax rates, social security premiums and contribution ceilings are reviewed and updated regularly by the Dutch authorities. Employers should consult the latest guidance from the Belastingdienst and UWV when calculating payroll costs and statutory contributions.

Contribution Thresholds

Several Dutch payroll taxes and social security contributions are subject to statutory income ceilings.

Maximum contribution wage

For 2026, the maximum contribution wage for employee insurance schemes is €79,409 per year. Employer and employee social insurance contributions are generally only payable up to this threshold.

Maximum daily wage (maximumdagloon)

As of 1 January 2026, the maximum daily wage is €304.25 gross per day (approximately €6,617.44 per month). This amount is used by the Dutch authorities when calculating statutory employee benefits, including unemployment benefits (WW), disability benefits (WIA), sickness benefits (ZW) and maternity or parental benefits (WAZO).

Note: Contribution ceilings and benefit thresholds are reviewed annually and may be adjusted by the Dutch government.

Employee contributions in the Netherlands 

Employee Income Tax

Income tax in the Netherlands is calculated using a progressive tax system. The rates below reflect the applicable Box 1 income tax and national insurance contribution rates for 2026.

Bracket 1:

• Annual taxable income from €0 to €38,883 is taxed at 35.75%.

Bracket 2:

• Annual taxable income from €38,883 to €78,426 is taxed at 37.56%.

Bracket 3:

• Annual taxable income above €78,426 is taxed at 49.50%.

It is important to note that the rates in the first two brackets include both income tax and national insurance contributions. These national insurance contributions fund schemes such as the State Pension (AOW), Surviving Dependants Act (Anw) and Long-Term Care Act (Wlz).

However, payroll taxes are affected by the application of wage tax credits (loonheffingskorting), which reduce the amount of income tax and national insurance contributions payable by employees. The two main tax credits are the general tax credit (algemene heffingskorting) and the employment tax credit (arbeidskorting). The value of these credits depends on the employee’s income and personal circumstances and generally decreases as income rises. Eligibility may also depend on the employee’s country of residence, with different rules applying to employees who live outside the Netherlands.

For 2026, the maximum general tax credit is €3,115 and the maximum employment tax credit is €5,685, with both credits gradually reduced as income increases.

Employee Social Insurance Contributions

Employee social insurance contributions are collected through the Dutch payroll tax system and help fund national insurance schemes.

State Pension (AOW)

• Employees contribute 17.9% towards the Dutch State Pension scheme.

Surviving Dependants Act (Anw)

• Employees contribute 0.10% towards benefits for surviving spouses, partners and dependants.

Long-Term Care Act (Wlz)

• Employees contribute 9.65% towards the Dutch long-term care insurance scheme.

Unlike some countries, employees in the Netherlands do not pay a separate unemployment insurance contribution. Unemployment insurance (WW/Awf) is funded entirely through employer contributions.

Social security

The social security system in the Netherlands involves a variety of schemes, which can be classified into three categories:

1. National insurances
2. Social security
3. Voluntary insurances

National insurances are paid through wage taxes and so are not separately visible.
Social security contributions must be paid directly to the tax office. The monthly tax report includes details on an individual employee level, and the tax office distributes this information to the social security office (UWV). UWV is then responsible for maintaining and redistributing the data.

The Netherlands has an extensive social security system covering employees, self-employed individuals and residents who are not in employment. The system consists of both national insurance schemes and employee insurance schemes.

National insurance schemes include:

State Pension (AOW) – providing income in retirement.

Surviving Dependants Act (Anw) – providing financial support for surviving partners and dependants.

Long-Term Care Act (Wlz) – covering long-term care and support for people with chronic illnesses, disabilities or age-related care needs.

Child Benefit Act (AKW) – providing financial support for families with children.

In addition to national insurance, employees are covered by employee insurance schemes, including unemployment insurance (WW), sickness benefits (ZW) and disability benefits (WIA). These schemes are funded through employer-paid social security contributions.

Healthcare coverage in the Netherlands is provided separately through the mandatory Health Insurance Act (Zvw). Residents are required to obtain health insurance from a private insurer, while employers contribute through an income-related healthcare levy.

National insurance generally applies to individuals who live or work in the Netherlands, subject to applicable Dutch and EU social security rules. Social security premiums (also referred to as employee insurance) must be paid entirely by the employer.

Payslip guidance

Employers in the Netherlands must provide a payslip to their staff. Online payslips are legally acceptable if the employee agrees to receive them digitally.
It is mandatory to pay employees at least the net minimum wages into a bank account registered in the employee's name.

Payslips must contain certain information required by Dutch law, including the employee’s gross and net pay, wage components, statutory deductions, hours worked, holiday allowance accrual, employer and employee details, and any applicable collective labour agreement (CAO). Employers must provide a payslip when an employee receives their first salary payment and whenever there is a change to the information shown on the payslip.

Minimum wage

Since 1 January 2024, the Netherlands has operated a statutory minimum hourly wage system. Fixed monthly, weekly and daily minimum wage amounts no longer apply.

For employees aged 21 and over, the statutory minimum wage is:

From 1 January 2026:

• €14.71 per hour

From 1 July 2026:

• €14.99 per hour

Reduced minimum wage rates apply to employees aged 15 to 20. The applicable rates are reviewed and adjusted by the Dutch government twice each year.

Working hours

Working hours in the Netherlands are regulated by the Working Hours Act (Arbeidstijdenwet), which sets limits on the number of hours employees may work and establishes minimum rest periods.

Under the Working Hours Act, employees may work a maximum of 12 hours per day and 60 hours per week. However, additional limits apply over longer reference periods. Employees may work an average of no more than 55 hours per week over a four-week period and 48 hours per week over a 16-week period.

In practice, a standard full-time working week is typically 36 to 40 hours, depending on the employer, sector and applicable collective labour agreement (CAO).

Part-time working arrangements are common in the Netherlands. Under the Flexible Working Act (Wet flexibel werken), employees who have been employed for at least six months may request changes to their working hours, working schedule or work location. The legislation applies to employers with 10 or more employees, and requests can generally be made once per year. Employers may refuse requests only where there are substantial business reasons for doing so, such as staffing shortages, financial impact, scheduling difficulties or health and safety concerns. Any refusal must be provided in writing.

Holiday allowance

Employees in the Netherlands have a legal right to holiday allowance on top of their base salary. Holiday allowance is 8% of the employee’s gross salary and is based on the salary earned from June of the previous year until May of the present year. However, these dates can vary based on collective agreements.

Overtime

There is no statutory overtime premium in the Netherlands. Any entitlement to overtime pay, time off in lieu, or enhanced compensation for additional hours worked is determined by the applicable collective labour agreement (CAO), employee handbook or employment contract.

Employee benefits

Mandatory benefits

Mandatory employee benefits and protections in the Netherlands include:

Long-term care (Wlz)

• The Long-Term Care Act provides coverage for individuals who require intensive long-term care due to illness, disability or age-related conditions.

Unemployment insurance (WW)

• Employees may be entitled to unemployment benefits if they meet the eligibility requirements. The scheme is funded through employer social security contributions.

Disability and work-income protection (WIA)

• Employees are protected through the Work and Income Act (WIA), which provides income support for those who are partially or fully unable to work due to long-term illness or disability.

Sick pay and sickness benefits

• Employers are generally required to continue paying at least 70% of an employee’s salary during periods of illness for up to 104 weeks, subject to statutory requirements.

Healthcare insurance (Zvw)

• All residents of the Netherlands are required to maintain basic health insurance. Employers contribute through an income-related healthcare levy under the Health Insurance Act (Zvw).

Holiday allowance (vakantiegeld)

• Employees are generally entitled to a statutory holiday allowance equal to 8% of their gross salary, paid in addition to their regular wages.

Occupational pension arrangements are not universally required by Dutch law. However, participation in a pension scheme may be mandatory where it is required by an applicable collective labour agreement (CAO) or industry-wide pension fund.

Supplementary benefits

• Reimbursement of travel expenses
• Extra compensation for overtime
• Tax-saving schemes when employees use a company-arranged sporting facility, travel to work on a bicycle or pay contributions to a labour union.
• Retirement
• Dependent’s pension
• Child support
• Health insurance

When considering which optional benefits you should implement, think about them from your employees' perspective. Choosing options that are meaningful to their needs and working out how you can assist them at every stage of their career will help you to understand what they require from your company.

Not only will this result in more productive and loyal employees, but it will also help you retain your staff and positively impact your bottom line.

Types of leave available

All employees in the Netherlands are entitled to a certain amount of leave, including annual leave, public holidays, sick leave, and maternity pay.

Annual leave

Annual leave days vary from company to company but are at least four times the working hours per week on an annual basis. For full-time employees, this figure would amount to 20 days’ worth of annual leave per year.

Employees must generally take their statutory annual leave within a specified period. Statutory holiday entitlement expires six months after the end of the calendar year in which it was accrued, unless the employee was not reasonably able to take the leave. Any additional contractual leave above the statutory minimum is subject to a longer five-year limitation period. Employers are expected to inform employees when annual leave is due to expire and provide them with a reasonable opportunity to use their entitlement.

Public holidays

Every year, there are several public holidays in the Netherlands:

• New Year’s Day
• Good Friday
• Easter Sunday
• Easter Monday
• King’s Day
• Liberation Day
• Ascension Day
• Whit Sunday
• Whit Monday
• Christmas Day
• Boxing Day

Public holidays are not automatically paid days off under Dutch law. Whether an employee is entitled to a paid day off on a public holiday depends on the applicable collective labour agreement (CAO) or the terms of their employment contract.

Sick leave

If an employee falls ill, the employer is generally required to continue paying at least 70% of the employee’s salary for up to 104 weeks (two years). During the first year of sickness, the amount paid must be at least equal to the applicable statutory minimum wage where this would otherwise result in a lower payment.

Under Dutch law, employers are also responsible for supporting an employee’s return to work and must comply with the requirements of the Wet Verbetering Poortwachter (Gatekeeper Improvement Act), which sets out reintegration obligations for both employers and employees during long-term sickness absence.

Many collective labour agreements (CAOs) and employment contracts provide more generous sick-pay arrangements than the statutory minimum. It is common for employers to continue paying up to 100% of salary during the first year of sickness, with reduced payments during the second year. However, these enhanced payments are contractual arrangements and are not required by law.

Dutch legislation requires employers and employees to cooperate in a formal reintegration process aimed at facilitating a return to work during long-term sickness absence. This means creating a back-to-work programme that makes considerations such as flexible working hours, training, or therapy.

It is also common for employees in the Netherlands to pay their employees above the statutory minimum. Some employment agreements require “waiting days” during which there is no obligation to pay wages during the first two days that the employee is absent from work due to sickness. 

Maternity

Employees are eligible for a total of 16 weeks of maternity leave on full pay. Of these 16 weeks, the first four to six weeks should be planned to be taken as pregnancy leave prior to the birth of a child, with the remainder classed as childbirth leave once the child has been born.

No statutory forms or documents are needed to process the maternity through payroll. However, it is necessary to report the pregnancy to the social security authorities as they will be paying the employee’s salary during the maternity leave.

During maternity leave, remunerations such as pensions will remain in place. Employees cannot claim additional funds from the authorities in addition to their maternity pay. Maternity leave in the Netherlands is governed by the Work and Care Act (Wet arbeid en zorg, WAZO). Employees are entitled to a minimum of 16 weeks of paid maternity leave, consisting of 4 to 6 weeks of pregnancy leave before the expected due date and a minimum of 10 weeks of maternity leave after the birth. Maternity benefits are paid at 100% of the employee’s daily wage, subject to the statutory maximum daily wage.

If pregnancy or childbirth leads to incapacity for work, the employee is entitled to benefits equivalent to 100% of their salary for a maximum of 12 months after the date of birth.

Partner/Paternity Leave

Paternity leave (or partner leave) is one week fully paid, taken after the child has been born. This is paid by the employer.

Additional partner leave

Eligible employees may take up to five weeks of additional partner leave (aanvullend geboorteverlof). This leave is paid at 70% of the employee’s daily wage, subject to the statutory maximum daily wage, and is funded by UWV. The leave must be taken within six months of the child’s birth.

As of August 2022, eligible employees are entitled to up to nine weeks of paid parental leave, compensated at 70% of their daily wage, subject to the statutory maximum daily wage set by UWV. To qualify for paid parental leave, the leave must be taken within one year of the child’s birth, adoption or placement in foster care.

Adoption/foster leave

Employees who adopt a child or become foster parents are entitled to six weeks of paid adoption or foster leave. The benefit is paid through UWV and employees should apply for the leave at least three weeks in advance.

The leave may be taken continuously or spread over a period of up to 26 weeks, beginning no earlier than four weeks before the child is placed with the employee.

Short and long-term care leave

Employees who need to provide essential care to a family member, partner or member of their household may be entitled to short-term care leave. Employees can take up to twice their weekly working hours in short-term care leave during a 12-month period. During this leave, employers are generally required to pay 70% of the employee’s salary, subject to at least the applicable minimum wage.

Employees may also be entitled to long-term care leave if they need to care for a parent, child, partner or another person in their immediate environment who is seriously ill or requires ongoing care. Employees can take up to six times their weekly working hours in long-term care leave during a 12-month period. Employers are not legally required to continue paying salary during periods of long-term care leave.

Emergency and short absence leave

Intended for unforeseen personal circumstances that require an employee to take leave immediately. The duration for emergency and short absence leave lasts for as long as is necessary, and the employer will continue to pay the employee's salary during this period. 

Employees are entitled to emergency and short absence leave for urgent and unforeseen personal circumstances. Employers are generally required to grant this leave and continue paying salary during the period of absence.

Special or extraordinary leave

This form of leave is not based on any type of labor law and is instead provided based on the collective labor agreement (collectieve arbeidsovereenkomst, CAO) between a company and its employees. Examples of leave under this category include bereavement leave, leave for relocation, study or exam leave, and leave to attend a wedding of a friend or family member. 

Minimum retirement age

The Dutch state pension age (AOW age) depends on an individual’s date of birth and is linked to life expectancy.

As of 2026:

• Individuals born between 1 March 1957 and 31 December 1960 reach state pension age at 67 years.

• Individuals born between 1 January 1961 and 30 September 1964 reach state pension age at 67 years and 3 months.

The AOW age is expected to increase further for younger generations and is reviewed periodically by the Dutch government.

Note: Employers should consult the latest guidance from the Sociale Verzekeringsbank (SVB) to confirm the applicable AOW age for individual employees.

Attracting talent

The COVID-19 pandemic changed how people work worldwide, with many workers requesting more flexibility from their organisations.

The widespread adoption of remote and hybrid working has increased employee expectations around workplace flexibility. While the Netherlands does not have a specific legal right to work from home, employees may request changes to their work location under the Flexible Working Act (Wet flexibel werken).

Employers are required to consider such requests, but they are not obliged to approve them. Decisions should take into account the nature of the role, operational requirements and the needs of the business.

As competition for talent continues to increase, offering flexible working arrangements can help employers attract and retain skilled professionals in the Dutch labour market.

Here are some ways in which employers can attract top talent in the Netherlands:

Introduce policies that place value on work-life balance

According to the OECD Better Life Index, the Netherlands has a better-than-average score when it comes to work/life balance. Almost no employees who took part in the survey stated that they work very long hours, compared to the OECD average of 10%.

Employers looking to expand their business in the Netherlands should introduce policies that promote a healthy work-life balance, including flexible working hours, increased support for parents and carers, and offering healthcare packages.

Offer opportunities for career development

Goal-oriented workers will likely be motivated to join an organisation if they offer ample opportunities for career development.

These initiatives could take the form of professional development plans or mentoring programmes. Either way, your company should focus on providing both candidates and employees with a clear understanding of the pathways they can take in their careers.

Provide opportunities to train and upskill

Digitisation is a major force driving change across many industries at the moment. However, the rapid adoption of digital technologies brings with it a set of challenges in the workplace, and it’s essential to ensure your employees are ready for such change.

The Netherlands has always been at the forefront of embracing modern tools and technology, such as  AI and machine learning, and workers in the country feel positive about their digital skills. A study by Salesforce reported that the Netherlands workforce feels adequately skilled in the digital technologies currently needed in the workplace, with 87% saying that they feel at least somewhat prepared for future digital skills.

That said, employees in the Netherlands are also aware that there are still some digital skills they could improve on. The study found that 74% of workers feel as though they are at a ‘beginner’ level for AI skills, and 70% said the same about coding skills. Other areas for improvement included security and encryption, data visualisation and data science.

By offering clear training opportunities in these digital areas, your company can increase its chances of attracting a dedicated and motivated workforce.

Termination of employment

In the Netherlands, the termination of an employment relationship by mutual agreement does not require authorisation by a government body. However, the terms must be set out in a written settlement agreement. Employees are entitled to withdraw their acceptance of the agreement within two weeks of signing. If the agreement does not explicitly inform the employee of this right, the withdrawal period is automatically extended to three weeks.

Employers should also ensure that the agreement is drafted in a way that does not unnecessarily affect the employee’s eligibility for unemployment benefits.

If you want to dismiss an employee due to non-performance and the employee is unwilling to cooperate, you will need to submit a request for dismissal via a court of law.

Notice period

In the Netherlands, statutory notice periods apply when an employment contract is terminated by either the employer or the employee.

Employee notice period

The statutory notice period for employees is one month. A longer notice period may be agreed in writing, provided it does not exceed six months.

Employer notice period

The statutory notice period for employers depends on the employee’s length of service:

• Less than 5 years of service: 1 month

• 5 to 10 years of service: 2 months

• 10 to 15 years of service: 3 months

• 15 years or more of service: 4 months

Where an employee's contractual notice period exceeds one month, the employer's notice period must be at least twice as long.

Unless otherwise agreed, notice must be given before the end of a calendar month. For employees who have reached the Dutch state pension age (AOW age), the statutory employer notice period is one month.

Probationary period

Under Dutch law, a probationary period must be agreed in writing and included in the employment contract.

The maximum permitted probation period depends on the type and duration of the contract:

Contracts of six months or less

• A probationary period is not permitted.

Fixed-term contracts longer than six months and up to two years

• A probationary period of up to one month may be agreed.

Fixed-term contracts of two years or more, and permanent contracts

• A probationary period of up to two months may be agreed.

In certain sectors, a collective labour agreement (CAO) may allow different arrangements within the limits permitted by Dutch employment law.

During a valid probationary period, either the employer or employee may terminate the employment relationship with immediate effect and without a notice period.

Severance pay

Employees may be entitled to a statutory transition payment (transitievergoeding) when their employment contract is terminated by the employer or is not renewed.

The transition payment is generally calculated as one-third of the employee’s gross monthly salary for each year of service, including partial years worked.

The statutory maximum transition payment is indexed annually. For 2026, the maximum payment is €102,000 gross or one gross annual salary, whichever is higher.

Employees begin accruing entitlement to a transition payment from the first day of employment, including any probationary period.

In some cases, employees and employers may agree to terminate the employment relationship by mutual consent through a settlement agreement. The terms of any compensation payable in these circumstances should be set out in the agreement.

What are my options for hiring?

If your business is looking to hire employees in the Netherlands, Airswift provides a number of employment solutions that will help you hire employees efficiently and within full compliance with Dutch laws.

Our expertise allows us to minimise risk while taking on the administrative responsibilities of hiring and onboarding candidates, leaving you to focus on other aspects of business growth.

Talent acquisition

You can source high-quality talent in a competitive landscape by working alongside an in-county talent acquisition specialist.

With our contract hire services, you can fill temporary roles and gain the agility to respond to market demands and needs shifts.

For more long-term hiring needs, our professional search services help you discover talented candidates in the Netherlands to fit permanent roles within your organisation.

Employer of record

If you want to hire employees without setting up a physical business entity, an Employer of Record in the Netherlands simplifies the hiring process without compromising your time and expenses.

An experienced EOR allows you to bypass the complications of physical entity setup and focus on business development. It can also can help you onboard your remote employees quickly and efficiently as well as take care of payroll and manage statutory benefits. All while ensuring you stay compliant with local employment legislation.  

*Although the information provided has been produced from sources believed to be reliable, no warranty, express or implied, is made regarding the accuracy, adequacy, completeness, legality or reliability of any information. For the latest information and specific queries regarding particular cases, please contact our team.