Relocate Staff to the Netherlands

How to employ a staff member in the Netherlands

Let's say you wish to hire employees in your Dutch business since you are a new business owner, or it is necessary due to your workload. Once you have found suitable employees, you naturally want to handle all payrolling requirements correctly. This article will tell you how to employ staff in the Netherlands, plus our payrolling services in the Netherlands can make the process even more smoothly for you.

It is important that you maintain a payroll administration when you register with the tax authorities as an employer. Consider the paystubs and an annual statement, for instance. Many business owners use a third-party (payrolling) company to handle this administrative task because they are unfamiliar with it. A payroll service can take care of almost all the management of your human resources.

Residency guide for non-EU employees entering the Netherlands

Are you interested in obtaining residency in the Netherlands? Non-EU citizens can get residency in the Netherlands with the help of Bolder Launch. We are able to guarantee (or outline the dependencies) the granting of residency based on a preliminary check.

The first step is to discuss with one of our immigration lawyers, who will gladly provide you with more information or conduct a free intake. As an alternative, you may find a lot of information and brochures regarding obtaining residency in the Netherlands on our Service Pages. There is typically a distinction between the criteria for either entrepreneurs or employees in residency programs (and this applies to all countries).

Entrepreneur or Employee?

Employees are often assumed to be more likely to be granted a work visa if they are 'highly skilled' or possess particularly specific skills (for which there is a shortage in the regional market). Entrepreneurs, on the other hand, generally have a harder time persuading immigration officials that their business will be beneficial to the Netherlands.

The 30% ruling in the Netherlands

The 30% ruling is a tax exemption for highly skilled migrants who are working or coming to work in the Netherlands. They have to be hired from abroad by a Dutch company.

The ruling makes it possible for employers to give their highly skilled migrants 30% of their salary tax-free. This means that payroll taxes are due over only 70% of their Dutch gross salary. This is only possible when certain conditions are met. The ruling is meant as compensation for the highly skilled migrants to compensate for costs that have incurred when they were relocated to the Netherlands.

Apply for a Recognised Sponsorship to employ Skilled Migrants

This article provides an overview of the necessary steps to apply for the HMS Sponsorship status, at the Dutch IND. Bolder Launch has years of experience in obtaining sponsorship status, and we can assist national and international companies.  

Please consider that you will need to provide at least get all the following documents:

Relocation of Staff within the international Group; The ICT permit

The easiest way to apply for residency in the Netherlands would be to apply as an employee in your own company, as key personnel that will be relocated (this is called the ICT permit). There are restrictions concerning owning shares (max 25% of the Group), which needs to be considered when structuring the company. You should have a proper background, and earn a reasonable salary for your ‘management/specialist’ position (which is expected to be 4600-6.000 EUR per month, based on the Employment Contract).

If you decide to apply for a residence permit via the ICT scheme then the following facts must be taken into consideration:

Relocation or employment of Highly Skilled Migrants

Highly Skilled Migrants can obtain a residency permit in The Netherlands quite easily if they meet the criteria. One of the most important criteria is to earn at least 4616 EUR gross salary per month. Another important criterion is that the employee will be working for a recognised Sponsor. Bolder Launch is a recognised sponsor, so we can employ highly skilled employees, also on behalf of our clients.

The main difference between the ICT program and the HSM program (which are both targeted at the same audience) is that the HSM Work Permit requires a sponsorship status for the employer. This status might be difficult to obtain for a starting company in the Netherlands because it has to show it is in good health financially.

European Blue Card for employees entering the EU market

The application process for obtaining a European Blue Card in the Netherlands is quite simple, but it can take several months. The process is not expensive; and to apply for the Blue Card, a sponsorship status is not required by the Employer (similar as to the ICT scheme).

If you decide to apply for an EU Blue Card, then the following facts must be taken into consideration:

Obtain residency as Entrepreneur

The entrepreneur's visa is the solution in case you like to relocate your company to the Netherlands, from a non-European location.

The Netherlands allows non-European entrepreneurs to relocate their company, or start a company in the Netherlands if the company is likely to be successful (over 100,000 ER turnover) and will create added value for the Netherlands (at least 2-3 jobs). Aside from that, it’s important that you are an experienced entrepreneur, or you have the right education to establish and operate the company. The preparation of a solid business plan is very important for this type of residency application.

We can provide immigration advice for entrepreneurs, and perform a pre-check to consider if an application for the entrepreneur's visa could have any potential for our customer.

Dutch Immigration law

Immigration law in the Netherlands can be important for both corporates, as for individuals; and our Immigration lawyers have great experience in both situations. 

When starting a business, you might consider getting a residence permit in your country of choice. Each European country has different procedures and requirements the applicant has to go through first in order to get a legitimate residence permit. Each country is different but getting a residence permit overall could be quite difficult if your country of residence is not in the European Union. In our Launch Guide and Service pages, you find some information will be given towards the different procedures in several countries.

Expat Services

Bolder Launch provides services to employers as expats. When we assist a company to employ, or relocate staff to the Netherlands, the employees typically also prefer to deal with us to discuss all the expat and relocation matters that they have to deal with.

In some cases you might even be a current expat in the Netherlands yourself, planning to finally start your own Dutch business. Also in these cases, our Launch Team is ready to assist!

Payroll in the Netherlands and the Labor Law

Payroll taxes in the Netherlands must be deducted from the salary and paid to the tax authorities. The taxes on the payroll are:

• wage tax and national insurance contributions
• employee insurance premiums
• income-related contribution to the Health Insurance Act (ZVW employer's levy and ZVW contributions)

What is a wage tax?

Employers already pay wage taxes to the taxing authorities, saving the employees from having to do so later. Wage taxes include national insurance contributions, in addition to the wage tax that is placed into a sizable sum from which the government, for example, constructs roads. When an employee retires or gets seriously ill, they receive money from that sum. The tax authorities will check an employee’s tax return at the end of the year to see if they have paid enough income tax. If not, they must make up the difference. On the other hand, they may also be eligible for a refund.

Become a registered employer

You must register with the Tax Authorities as an employer in order to pay payroll taxes in the Netherlands. Following that, you will get:

A payroll tax ID

Alongside is the letter of declaration, which may have a connection to the industry, and the decision or contact with the varied premium percentage. If you need to pay your employee's employee insurance premiums, you can use the work resumption fund (Whk).

If you file a payroll tax return or have any other interactions with the tax authorities, you must use your payroll tax number.

Payroll tax and national insurance contributions are reduced

For some of your employees, you may not always be required to pay the whole amount of the payroll tax that was withheld. For instance, they carry out research and development (R&D) activities. This is called remittance reductions. In the Handbook Payroll Taxes, Chapter 26 has more information about this.

Verify the identification of your employee

Ask for a statement with a signature, a date, and personal information such as a person's name, address, date of birth, and social security number when hiring someone. You would need to verify your employee's identity and have a record of it. You should confirm a foreign employee's authorisation to work in the Netherlands before hiring and including them in your payroll.

Prior to the employee’s employment period, you must obtain all their information and confirm their identity. If you are unable to correctly verify your employee's identity, the anonymous rate must then be applied. Chapter 2 of the Handbook Payroll Taxes has more information on the anonymous rate.

Establish payroll management for your Netherlands company

Payroll setup and upkeep are some of the other requirements when hiring employees in the Netherlands. The Handbook Payroll Taxes, chapter 3, has more information about this. Wherever your company is based or has an office, you should maintain its payroll administration at that same location. You are also in charge of salary determination, premiums and taxes and make timely payments.

Wage tax brackets 2022

You can see how much tax is levied on your salary in the table below:

How much tax will I pay with a tax credit in 2022?

Fortunately, there are also several tax credits that lower the amount on which you pay tax. In the table below, you can see which tax credits are automatically settled before you receive your salary:

Labor Law stipulations to consider as an employer

You have several significant duties and obligations as an employer. We will go over some of the responsibilities you have as an employer with regard to the health of your employees in this article. The potential accompanying challenges and problems will also be covered in the following sections.

Worker's well-being

To safeguard an employee’s health, numerous requirements for employers are established. An employer has a so-called "duty of care" under the Working Conditions Act. Fundamentally, this duty of care means that the employer must make sure that workers can do their duties and responsibilities in a safe and healthy manner.

This responsibility of care entails a number of obligations. One of these responsibilities is to identify potential risks in the work's execution and the required corrective actions. These are noted in the Risk Inventory and Evaluation (RI&E). The Coronavirus pandemic has now made this task increasingly crucial. Being aware of the relevant laws and regulations is an additional obligation you have as an employer.

RI&E

Every employer is required to regularly create and/or modify a RI&E in order to guarantee that workers can do their jobs as safely and healthily as possible. 

Occupational illnesses and workplace accidents

A RI&E's goal is to identify the risks, but unfortunately, no amount of risk mapping can guarantee that no occupational accidents will occur. Employers are obligated to notify the Labour Inspectorate right away if an accident or occupational sickness causes serious physical injuries, mental harm, or death. The Labour Inspectorate then determines whether to conduct a thorough investigation into the accident and its circumstances.

In the event of an occupational disease, the occupational health and safety agency will notify the Netherlands Centre for Occupational Diseases about the condition. Employers are required to keep a record of all accidents that result in employee absences due to an illness. This also falls under the RI&E. There are more circumstances in which registering an accident is required rather than reporting one. Even if it is not a catastrophic accident, registration is still required.

Requirements in the event of illness

The aforementioned responsibilities are established to prevent accidents and illnesses, but a company still has its obligations even when an employee is on sick leave. These obligations remain to be applicable even if the absence was not brought on by an occupational illness or an accident at work.

First, an employer is required to continue paying the salary in the event of illness, for whatever reason it may have been brought about. An exception will apply only when the worker knowingly contributed to their disease.

In most circumstances, the responsibility to keep paying salaries while an employee is ill lasts for a period of two years. You must continue to pay at least 70% of the compensation during the first year; nevertheless, the wage cannot be less than the minimum wage. In the case that a higher proportion has been stipulated in the job contract or collective bargaining agreement, the increased proportion then takes effect. Additionally, in the second year, you must pay the employee at least 70% of their regular salary; but, if their regular pay is less than the minimum wage, you are no longer required to supplement their compensation.

 Reintegration

The reintegration of a sick employee is partly your responsibility as an employer since it is also the responsibility of an employee. These duties take into effect as soon as the employee reports for work absence due to illness. Most of the time after filing a sick report, an employee will return to work within two weeks. However, you will observe that the initial measures toward reintegration are not taken until the employer recognizes that the employee has more serious sickness. The goal is to keep the employee from being permanently unable to do their job duties, continuing to be disabled for work, and ultimately entering the WIA, for example.

Payroll in the Netherlands and the Labor Law

Do you have any employees? Payroll taxes must then be deducted from the salary. These payroll taxes must be paid to the tax authorities in the Netherlands, including:

• wage tax and national insurance contributions
• employee insurance premiums
• income-related contribution to the Health Insurance Act (zvw employer's levy and zvw contributions)

What is a wage tax?

Employers already pay wage tax to the taxing bodies, sparing you the trouble of doing it yourself later. National insurance contributions are included in wage tax in addition to the wage tax, which goes into a substantial pot that the government uses, for example, to build roads. You get money out of the final pot when you retire or get critically ill. To determine whether you have paid enough income tax, the tax authorities will review your tax return at the end of the year. In that case, you must pay the difference and might also be entitled to a refund.