What is an employer of record in the Netherlands?

An employer of record in the Netherlands is a company that already employs people there and that takes the person you have chosen onto its own payroll, on a Dutch arbeidsovereenkomst, so that you can put someone to work in the country without registering a company of your own. You pick the person, agree the salary and direct the work. The contract, the payroll and the statutory duties that come with being the employer on paper sit with the employing company named on that contract.

The contract is an ordinary Dutch employment contract. Article 7:610 BW describes it as an agreement under which one party performs work in the service of the other, for pay, over a period of time, and Dutch law reads those four elements, arbeid, loon, gedurende zekere tijd and in dienst van, against what actually happens between the parties rather than against the label on the paperwork.

It helps to be clear about what the arrangement is not. It is not an engagement of a self-employed zzp’er, who invoices you and carries their own tax position. And it is not the same as opening a company of your own in the Netherlands, which gives you an entity to run alongside the hire. We put those two routes beside each other in employer of record vs a Dutch B.V.

The EOR becomes the legal employer of the person you hire. Everything else about the working relationship, what the person does, who they report to, what they are paid and how the role develops, stays exactly where it was.

The arbeidsovereenkomst is signed by the employing company and the worker. Your business is not a party to it, which is the mechanical reason the employer duties do not land on you: they follow the employer named on the contract.

Dutch law does not require that contract to be written down to be valid. Article 7:610 BW sets no form requirement at all, and an oral agreement is a real employment contract. Three things, though, are void unless they are in writing: the proeftijd under article 7:652(2) BW, the concurrentiebeding under article 7:653(1)(b) BW and a termination agreement under article 7:670b(1) BW. A written contract is also one of the conditions for the low AWf rate, which is why in practice every Dutch employer puts it in writing.

Article 7:655 BW then adds a written information duty. Among other things, the statement has to cover the parties, the place or places of work, the function or the nature of the work, the start date, the end date of a fixed term, holiday entitlement or how it is calculated, the termination procedure including notice periods, and the pay with its separate components and how often it is paid.

One clause catches foreign employers more than any other. A contract of six months or less can carry no proeftijd at all under article 7:652(6)(a) BW, and a clause contrary to that article is void rather than reduced to the lawful maximum. A one-month probation written into a six-month contract has no effect at all, so a dismissal in week two is a dismissal without permission.

Fixed-term contracts carry a second cost that rarely appears in a budget. The low AWf rate applies only to a contract that is indefinite, written and not an on-call contract, and failing any one of those three conditions moves the employer to the high rate, a difference of five percentage points on pay up to the premium ceiling.

The split is between the work and the employment. You keep every decision about the work. The employing company carries the contract and everything the Dutch statutes attach to it.

The line is not quite as clean on the last item in the left-hand column, and pretending otherwise would mislead you. You decide when a role should end; you cannot decide on your own that it does. Ending an indefinite Dutch contract needs a ground and, in most cases, permission from a third party before notice can be given at all, which is covered further down this page.

The employee feels the split less than the diagram suggests. They are paid in euro on a Dutch contract, their payslip carries a Dutch employer, their holiday is booked with you, and there is a named contact who works on Dutch payroll every day and can answer a question about vakantiegeld or a loonheffingen line without going through your finance team.

Four things, and they start before the first working day. The first is registration: an employer registers with the Belastingdienst before it hires staff, and that registration produces the loonheffingennummer used on every payroll return, together with the aangiftebrief, a sectoraansluiting where one applies and the Whk percentage decision for that employer.

The second is identity. Before employment begins the employer needs the employee’s BSN, along with their name, address and date of birth, on a statement the employee has signed, and it has to have checked the identity document in the original. Where that has not been done, withholding switches to the anoniementarief, 52,00% for 2026 with no tax credits and no ceiling on the employee insurance premiums, which is a penal rate rather than a fine.

The third is the monthly return. Loonheffingen is an umbrella term covering loonbelasting, premie volksverzekeringen, premies werknemersverzekeringen and the werkgeversheffing Zvw; the employer calculates them, withholds them and files them in the loonaangifte. The order it all happens in, and what has to be true before the first payroll runs, is the subject of how the EOR process works in the Netherlands.

The fourth is the statutory entitlements themselves. Twenty days of paid holiday for a full-timer, because article 7:634 BW sets the minimum at four times the agreed weekly hours. Vakantiegeld of 8% under article 15 WML, normally paid as one amount in May or June. And 70% of wage for up to 104 weeks of illness under article 7:629 BW, paid by the employer rather than by the state, which is the single largest employer liability in Dutch employment and is set out in full in our guide to Dutch sick pay rules.

Because the two alternatives both carry more weight than they appear to. One is to engage the person as a contractor. The other is to open a Dutch company and become the employer yourself.

The contractor route runs into article 7:610a BW, which presumes an employment contract where a person has worked for another for reward for three consecutive months, either weekly or for at least twenty hours a month. That presumption is rebuttable, but it puts the burden on the engager, and the Belastingdienst has been enforcing classification since 1 January 2025. The test itself is a weighing exercise rather than a checklist, which our post on misclassification in the Netherlands works through.

The entity route is a real answer for a real business, and a heavy one for a first hire. It means a notarial deed, registration in the Handelsregister, employer registration with the Belastingdienst and a payroll operation, before you have found out whether the market works for you. It also brings its own tax return, its own filing calendar and, if the company has a director-shareholder, a minimum salary the Belastingdienst expects that person to be paid.

What buyers usually want in between is a predictable number. Statutory employer social charges run from 16,55% to 28,60% of total gross pay depending on contract type, sector and employer size, with a typical permanent-contract figure of 16,77% for 2026, and 8% vakantiegeld sits on top of base salary. Those figures assume no CAO applies and no occupational pension scheme is compulsory, which is a real assumption rather than a formality: a CAO declared algemeen verbindend binds every employer in its sector whether or not that employer signed it, and it can impose a pension, a wage scale and extra leave.

It does not make Dutch employment law lighter. Every rule that would apply if you employed the person through a company of your own applies here in the same words, because the worker is on an ordinary Dutch contract.

So there is no at-will dismissal. Ending an indefinite contract needs a redelijke grond from the exhaustive list of nine grounds in article 7:669(3) BW, a redeployment test, and permission from UWV or a dissolution by the kantonrechter before notice can be given. The ketenregeling still turns a chain of fixed-term contracts into an indefinite one at three contracts or 36 months. The transitievergoeding is still owed from the first day of employment, including where a fixed-term contract is simply allowed to expire.

It does not change the management either. Objectives, priorities, pay reviews, the working pattern and the decision to grow or stop the role stay with you, and the employee experiences your company as the place they work. What moves is the administration and the legal position of the employer, which is what the Employer of Record Netherlands service exists to take on.

And it does not lock you in. If the headcount justifies an entity later, the sensible sequence is to open it, register it as an employer and move the contracts across, rather than to start with one on the strength of a single hire.

What it does change is the order in which you find things out. You learn what a Dutch employee costs, what the market pays and whether the role works before you have a company, a registration and a filing calendar to unwind if the answer is no.