HR and Pay-rolling In Netherlands

Complete details on HR and Payrolls in the Netherlands. Payroll taxes, How to calculate labour expenses and other details related to payrolls in the netherlands


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    HR and Pay Rolling

    HR And Pay-rolling in The Netherlands

    Recruiting, hiring, onboarding, training, and terminating employees are all part of HR’s responsibilities. HR also deals with the most uncomfortable parts of work, such as HR breaches, layoffs, and firing. Human resources, on the other hand, exist to provide assistance to employees. Indeed, it is a human resource.

    When recruiting for new roles, HR has to be aware of the organization’s needs and make sure they are satisfied. An ad posted on a job board isn’t enough; they’ll need to do market research, contact stakeholders and manage budgets. As soon as the position is announced, further investigation is needed to ensure that the correct person is hired.HR is responsible for scheduling interviews, organising hiring initiatives, and onboarding new hires, among other responsibilities. It is their responsibility to ensure that all recruiting documentation is completed and that everything from the first day to the last day goes well.

    HR is also responsible for disciplining employees. Consider an employee who consistently arrives late to work, despite many warnings from the employer.HR might intervene and look into the reason for the delay, if necessary. As a result, they may be able to give extra advantages such as counselling or assist the employee to become punctual. If they don’t want to incur the cost of dismissing and replacing an employee, they may use it as a learning opportunity for the person to advance in their career. They realise when a worker isn’t the perfect match for a firm and would do better elsewhere. A team’s cohesion and health may be determined by HR’s connection with managers and workers.

    Payrolling in the Netherlands

    Payrolling in the Netherlands involves the transfer of payroll administration and employment responsibilities to a third-party payroll company, also known as a payroll agency or employer of record. The payroll company becomes the official employer of the workforce while the client company retains day-to-day management and operational control. 

    Taxes and hours must be computed on every payday. As well as reimbursing expenses, it is also necessary to include increases and bonuses in the totals. If you think doing taxes once a year is a hassle, imagine what it must be like to work in HR and ensure that taxes are properly deducted every pay month. Additional expenses, such as holiday pay, the 13th month’s pay, health care costs, education costs and pension fund contributions may be incurred in addition to the employee’s gross salary, including travel expenses.

     Fortunately, there is a collective bargaining agreement for HR professionals. Collective bargaining agreements nearly usually contain sections that address the working conditions of particular industries. Here, the current collective bargaining agreement in the field is critical. A large majority of collective bargaining agreements include provisions governing the terms and conditions of employment in certain fields of work.

    Elements to take into account when developing a Netherlands payroll procedure

    You must take into account all necessary factors while developing a payroll procedure for the Netherlands, including wage requirements, hours worked and overtime, compensation for holidays, incentives, reductions, benefits for workers, etc. Companies must also keep payroll records after each pay period to prevent potential calculating errors because payrolling involves numerous variables and complex computations.

    How to calculate labour expenses?

    It is estimated that the labour expenses for human resources are around 30% more than the employee’s gross compensation. After all, HR is also responsible for paying a portion of the insurance premiums and other expenses. As well as retirement benefits such as the holiday pay (typically 8% of the gross income) and the thirteenth month. There are wage taxes and premiums that an employer is required to pay.

    Contributions to a pension

    Every employee is covered by social insurance when it comes to pension entitlements (AOW and ANW). As an employer, you have the option of providing additional pension benefits. The employee generally gets a part of the premium. Most of the time, this is already controlled in the collective bargaining agreement or the pension fund sector, depending on the situation. Any new employee must be informed about this. Registration with the tax authorities and payment of payroll taxes

    Payroll Contribution in the Netherlands

    While recruiting workers, a number of payroll contributions and deductions are relevant:

    • Netherlands taxation: In the Netherlands, every employer are required to deduct taxes from their staff members’ paychecks each month in advance. 
    • Contributions to national insurance: Social insurance is referred to as national insurance in the Netherlands. Taxes assist in providing a minimal level of good health for those who reach retirement age or develop a chronic illness. These expenses are taken out of the wages of the staff members.
    • Medical insurance(ZVW): Insurance for medical care is required in the Netherlands. Monthly health insurance premiums are paid in part by Dutch taxpayers. The remaining insurance costs are paid for by employers.

    Dismissal and Entitlement Terms

    The employment contracts, essential entitlements, and termination provisions must be mentioned when hiring employees for companies in the Netherlands. 

    Corporations in the Netherlands usually have a 1-month statutory notice period for a worker who intends to quit the corporation after working there for a period of time shorter than five years. 

    Employers can only dismiss workers in the Netherlands for legal reasons. These reasons comprise things like poor behavior, refusing to complete the work assigned by the superior, severe health concerns that cause excessive absences from work, closing of the organisation, etc.


    Payrolling and human resources management are crucial tasks for companies doing business in the Netherlands. Effective workforce management and staff development are priorities for HR management. Payrolling, on the other hand, simplifies payroll management, reduces administrative responsibilities, and reduces employment risks. Giving HR and payrolling high importance will enable businesses to create a successful and compliant environment, which will benefit them in the long run.

    For further queries regarding HR and patrolling in the Netherlands, consult with our specialist at Odint Consulting.