How the EOR process works in the Netherlands

Six things, in this order: the terms are agreed, the arbeidsovereenkomst is signed, the employer registrations are in place, the employee’s identity and BSN are held and verified, the first loonaangifte is filed, and then the same cycle repeats every month. Nothing in that list is optional and two of the steps are dated rather than merely sequenced.

Registration with the Belastingdienst has to be completed before staff are hired. The signed employee statement and the verified identity document have to be in hand before the first working day, not during the first week. Miss either and the consequence is immediate and arithmetical rather than a warning letter.

What you supply is short: the person, the salary, the start date, the hours a week, whether the contract is fixed-term or indefinite, and anything you want in it beyond the statutory floor. What comes back is a Dutch contract, a payroll in euro and a monthly return filed under a Dutch loonheffingennummer. The same steps run in the same order where a business employs directly through a company of its own, which we take separately in how to hire an employee in the Netherlands.

The fee for the service starts at €599 per employee per month. That sits alongside the salary and the statutory employer costs rather than inside them, and Employer of Record Netherlands quotes it that way so the two can be compared separately.

Five decisions have to be settled before anyone can draft a contract: the gross salary, the start date, the contractual hours a week, whether the contract runs for a fixed term or indefinitely, and whether the salary you have quoted includes or excludes the 8% vakantiegeld.

That last decision causes more Dutch offer-letter arguments than the other four together. Dutch salaries are normally quoted excluding vakantiegeld, and the 8% sits on top of the figure discussed. This is market convention rather than a rule, so the contract has to say which reading applies. A candidate told € 48.000 who expected € 51.840 of total gross pay has a reasonable complaint, and it is entirely avoidable at this stage.

The second question is whether a CAO applies to the role. A sector CAO declared algemeen verbindend binds every employer in that sector, whether or not it signed the agreement, and can impose a wage scale, a compulsory pension, a 13th month or extra leave. The CAO’s own scope clause decides, not the employer’s view of its own industry, and the Ministry of SZW maintains a public register where the position can be checked before the first payroll rather than after it.

Once those are settled, the employer cost is arithmetic. Statutory employer charges on a permanent written contract come to 16,77% of total gross pay for 2026, which is about 18% expressed on base salary, and the 8% vakantiegeld is a further 8% on base. Both figures assume no CAO applies and no occupational pension scheme is compulsory, which is why the CAO question is settled before the salary is signed off rather than after.

The contract is drafted between the employing company and the worker, and it is written rather than oral even though Dutch law would accept an oral agreement, because several of the clauses a business actually wants are void unless they are in writing and because a written contract is one of the conditions for the low AWf rate.

Article 7:655 BW turns most of the drafting into decisions you have to make rather than boilerplate. Among other things the statement has to give the place or places of work, or say that the employee works in various places or chooses their own; the function or nature of the work; the start date and, for a fixed term, the end date; holiday entitlement or the method of calculating it; the termination procedure and the notice periods; and the pay broken into its separate components with the frequency of payment.

Working time is treated as two cases rather than one. Where the hours are largely predictable the statement gives the normal daily and weekly hours and what happens outside them. Where they are largely unpredictable it has to give the number of guaranteed paid hours, the days and hours on which the employee can be required to work, and the notice the employer must give.

The proeftijd follows a ladder and one rung of it is a trap: two months on an indefinite contract, one month on a fixed term longer than six months and shorter than two years, and none at all on a contract of six months or less, where article 7:652(6)(a) BW makes the clause void rather than shortening it. The drafting detail sits in our guide to Dutch employment contracts.

An employer registers with the Belastingdienst before it hires staff, and the registration is what produces the loonheffingennummer. That number is used on every loonaangifte and in every conversation with the Belastingdienst about payroll for that employer.

Three further things arrive with it. The aangiftebrief sets out the return periods for the year. A sectoraansluiting letter assigns the employer to a sector, which is not cosmetic: the sector determines the small-employer Whk rate and the sectors differ from each other by several percentage points. And a Whk decision gives that specific employer its own gedifferentieerde premie for the year, set by the Belastingdienst rather than chosen.

There is no published number of days for any of this, and any provider quoting one is guessing. The rule as the government states it is simply that registration has to happen before you hire staff, which is why it is treated as step three of six and not as paperwork to be caught up with later. The official summary sits on the government’s business portal under payroll tax and employer registration.

Alongside the payroll registrations the employer has to run right-to-work checks where the person is not free to work in the Netherlands without permission, and hold the evidence that it did so.

Before employment begins, the employer must hold a statement signed by the employee giving their name, address, date of birth and BSN, and must have checked the identity document itself rather than a copy. This is the step most likely to slip when a start date moves forward, and it is the one with a price attached.

Where those documents are not held, withholding moves to the anoniementarief. For 2026 that is 52,00% enkelvoudig or 108,30% on the table rate, applied with no tax credits at all and with no ceiling on the employee insurance premiums. It is corrected by getting the documents, not by an appeal, and until then the employee sees a payslip that makes no sense to them.

The same conversation settles the loonheffingskorting. The algemene heffingskorting and the arbeidskorting are given through the payroll month by month rather than claimed back at the end of the year, and the employee elects in writing with which employer that happens. It can be applied by only one withholding agent at a time. Someone with two jobs who applies it twice under-withholds all year and receives an assessment for the difference, which is the single most common Dutch payroll complaint.

If the employee does not apply it with this employer, nothing goes wrong: the employer withholds without the credits and the employee recovers the difference in their income tax return.

The first return is filed under the loonheffingennummer for the first payroll period, and it covers everything the Dutch payroll calls loonheffingen: loonbelasting, premie volksverzekeringen, premies werknemersverzekeringen and the werkgeversheffing Zvw. Two of those four come out of the employee’s gross pay and two are paid by the employer on top of it.

On the employer’s side the 2026 components are AWf at 2,74% on a permanent written contract or 7,74% where that test is failed, Aof at 6,27% for a small employer, the Wko surcharge at 0,50%, the employer’s own Whk percentage, and the werkgeversheffing Zvw at 6,10%. Every one of them stops at the same ceiling: € 79.409 of premieloon for 2026, above which no AWf, Aof, Wko, Whk or Zvw is due at all.

That ceiling is the reason Dutch employer overhead falls as a percentage as salary rises, and the reason a single percentage quoted without a salary attached is close to meaningless. The mechanics of each component, and what the employee sees on the other side of the payslip, are worked through in Netherlands payroll explained.

On a permanent written contract for a small employer in business services, those components total 16,77% of total gross pay for 2026. The figure assumes no CAO applies and no occupational pension scheme is compulsory, and both of those assumptions were tested back at step one rather than here.

After the first return the process becomes a repeating cycle: payroll is calculated, the payslip is produced, the employee is paid in euro, and the loonaangifte for the period is filed and paid. Nothing about it needs your attention in a normal month beyond telling the employing company what has changed.

What changes across a year is predictable enough to plan for. Vakantiegeld accrues over the period 1 June to 31 May and is normally paid as a single amount in May or June, so one month in the year is heavier than the others. Statutory holiday accrues at four times the weekly hours under article 7:634 BW, and those statutory days lapse six months after the end of the year in which they were earned, on 30 June, unless the employee was reasonably unable to take them. Contractual days above the statutory minimum run for five years instead.

Illness changes the cycle immediately rather than gradually. The absence is reported to the arbodienst or bedrijfsarts on day one, the employer continues to pay 70% of wage under article 7:629 BW, and a statutory reintegration programme with dated milestones starts running alongside the payments. The payment rules are set out in our guide to Dutch sick pay.

Leaving runs in reverse. Notice is given against the end of the month unless the contract says otherwise, untaken holiday is paid out in cash with a statement of the outstanding entitlement under article 7:641 BW, the transitievergoeding is calculated, and the final loonaangifte closes the employment off.