Labor Authority in the Netherlands
Labor Authority in the NetherlandsUpdated on Monday 20th February 2023
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The Netherlands is an attractive choice for foreign investors. The Dutch labor market offers many advantages to employers, such as flexibility to hire employees, industrial stability, social security and a valuable workforce.
The Ministry of Social Affairs and Employment in the Netherlands ensures that the labor market policy offers benefits both to the employer and the employee and works diligently to ensure that the Netherlands has a vigorous economic position in Europe.
The Dutch labor market
The Netherlands offers great stability regarding employment for employees and employers alike. There are very few strikes in the Netherlands. According to the Dutch employment law, the employer has a satisfactory range of options when hiring employees.
The free movement of labor within the EU offers Dutch employers the possibility to hire foreign workers in the Netherlands. The Dutch economy benefits from employing foreign workers in at least two ways:
- labor shortages can easily be resolved by employing skilled workforce from the EEA countries;
- some foreign employees can be valuable for the domestic labor market, therefore qualify for special employment conditions in the Netherlands, such as the 30% ruling.
According to Dutch law, specific advantageous conditions apply for highly skilled migrants that work in the Netherlands. Highly skilled migrants that come to the Netherlands need to comply with certain provisions: they must have an employment contract, an appointment decision, a guest agreement and must satisfy specific income requirements.
Our accounting firm in the Netherlands can offer you detailed information about the advantages of hiring special categories of workers in the Netherlands. Many companies choose to outsource the processes related to payroll in the Netherlands to local accounting companies. This happens because after reaching a large number of workers it becomes harder to keep track of so many employee files that need to be updated regularly.
Employment in the Netherlands
Open-ended employment agreements and fixed-term employment contracts exist in the Netherlands. Employers and employees are free to agree on the type of contract they conclude and its duration. Special conditions apply to fixed-term contracts.
The Netherlands has a well-developed social security system that offers social insurance for employees. Both the employees and the employee have to make compulsory social security contributions, however, the percentage is lower for the employer, as such: employers have to pay an average percentage of 18.78% and the employee the rest of 31.15% of the gross salary.
Our Dutch accountants can offer you complete tax planning services.
For more information about the labor law in the Netherlands and taxes on salaries in the Netherlands, please contact our Dutch accounting firm.