Effortless Hiring in Netherlands

Employment Contracts

• Employers are required to provide employees with a written employment contract detailing essential terms such as:
• Job responsibilities.
• Compensation.
• Working hours.
• Leave entitlements.
• Termination conditions.
• This contract must be provided within one month of employment commencement to ensure clarity and mutual understanding.

Probationary Period

• The probationary period is typically one month for fixed-term contracts up to two years and can extend up to two months for longer contracts. During this period, either party can terminate the employment without notice.

Payroll Frequency

• Employees are generally paid on a monthly basis, with payments made by the end of each month.

Minimum Wage

• As of July 1, 2024, the legal minimum wage for employees aged 21 and over will be €13.68 per hour. Different rates apply for younger workers and apprentices.

Overtime

• Standard working hours are typically 40 hours per week. Overtime is compensated at:
• 125% of the regular hourly rate for the first two hours.
• 150% for additional hours beyond that.
• There is no statutory requirement for overtime pay; compensation for overtime is typically outlined in the employment contract or collective labor agreements.

Employee Contributions

1. Social Security: Employees contribute to national insurance schemes covering benefits like old-age pensions and unemployment.
2. Income Tax: The Netherlands employs a progressive income tax system with rates ranging from 9.28% to 49.5%, depending on income levels.

Employer Contributions

1. Social Security: Employers are responsible for contributions to employee insurance schemes, including unemployment and disability benefits.
2. Pension Contributions: Employers may be required to contribute to employee pension schemes, especially if mandated by a sector-specific pension fund.

Types of Leave in the Netherlands

1. Annual Leave

• Employees are entitled to a minimum of four times the weekly working hours in paid annual leave per year (e.g., 20 days for a full-time employee working five days a week).

2. Holiday Allowance

• Employees receive a holiday allowance of at least 8% of their gross annual salary, typically paid in May or June.

3. Sick Leave

• Employers are required to pay at least 70% of the employee's salary during sick leave for up to two years. In the first year, this amount must be at least the minimum wage.

4. Parental Leave

• Maternity Leave: Pregnant employees are entitled to 16 weeks of maternity leave, with benefits paid by social security.
• Paternity Leave: Partners are entitled to one week of paid paternity leave at full salary, with an additional five weeks of supplementary leave at 70% of salary, both paid by social security.

Pension Schemes

• Employers may be required to offer pension schemes, especially if a sector-specific pension fund is applicable. Even if not mandatory, many employers provide pension plans as part of the employment package.

Health Insurance

• While employees are responsible for obtaining their own health insurance, employers often provide contributions or supplementary health insurance benefits.

Notice Period

• The statutory notice period for employees is typically one month. For employers, it varies based on length of service:
• Less than 5 years: 1 month.
• Between 5 and 10 years: 2 months.
• Between 10 and 15 years: 3 months.
• More than 15 years: 4 months.

Severance Pay

• Employees are entitled to a transition payment upon termination initiated by the employer, calculated as one-third of the monthly salary for each year of service.

Dismissal Procedures

• Employers must have a valid reason for termination and may need approval from the Employee Insurance Agency (UWV) or the court, depending on the grounds for dismissal.