Country facts
The Kingdom of the Netherlands is a parliamentary constitutional monarchy with a nominal GDP of 1.012 trillion USD in 2021, making it the 17th largest economy in the world.
The Netherlands are members of the EU and the Eurozone, G10, NATO, OECD, WTO, the Trilateral Benelux union and the Schengen area. The Netherlands has a 0.944 rating in the Human development index which is considered very high, with a global ranking of 8th. They host several intergovernmental courts, many of them are located in The Hague, which is one of the country’s largest cities.
Capital
Amsterdam
Currency
Euro (EUR)
Languages spoken
Dutch
Population size (2020)
17,44 million
Ease of doing business (world bank ranking)
42
Cost of living index(2021)
78,64
Payroll frequency
Monthly
VAT – standard rate
21%
GDP – real growth rate(2020)
–3,8%
Employing in Netherlands
Dutch social security is comprised of a variety of different schemes. These can be divided into 3 groups: National insurances, social security, and voluntary insurances.
The first are paid as part of wage taxes, the second are paid to the tax office and the monthly tax report details this on individual employee level. The tax office shares such information with the social security office, UWV (Uitvoeringsinstituut Werknemersverzekeringen).
The Netherlands’ system of social security includes a National Insurance scheme which covers old age, death, long-term invalidity, a selection of medical expenses and child benefits. Employees are also insured against illness, long-term invalidity and unemployment.
National insurance is compulsory for everyone who works or resides permanently in the Netherlands. The schemes are:
- General Child Benefit Act (Algemene Kinderbijslagwet, AKW)
- National Survivor Benefits Act (Algemene nabestaandenwet, ANW)
- General Old Age Pensions Act (Algemene Ouderdomswet, AOW)
- Long-term Care Act (Wet langdurige zorg, WLZ)
Social security costs are to be fully paid by the employer. For unemployment the premium is 2.7% premium for permanent employees and 7.7% for fixed-term / flexible employees. 7.53% covers the long term disability insurance. Depending on what business area the employer operates in a premium is also to be paid for a short term disability insurance. A typical rate is 0.91% Finally, employers contribute to healthcare with 7%.
The above is based on employees’ annual taxable income up to € 58.311.
Employment law in the Netherlands is statutory legislation which is codified in the Dutch Civil Code. It is also governed by other things such as collective labour agreements, internal regulations and the individual employment contract itself.
Childcare in the Netherlands is very expensive and as a consequence of this, a lot of people work part-time jobs. Employers must allow part-time work or work flexible hours. The only way the employer can turn down such a request is if there are strong and objective reasons not to.
List of Public Holidays - 2024
| Date | Holiday Name |
|---|---|
| 1 January | New Years Day |
| 29 mars | Good Friday |
| 31 mars | Easter Sunday |
| 1 April | Easter Monday |
| 27 April | Kings Day |
| 5 May | Liberation Day |
| 9 May | Ascension day |
| 19 May | Whit Sunday |
| 20 May | Whit Monday |
| 25 December | Christmas Day |
| 26 December | St Stephen’s Day |
Minimum wage
The National minimum wage of the Netherlands changes every year. In 2022 it will increase from 1684 euro / month to 1725 euro / month.
Salary payouts
The payroll frequency is monthly. Work between the first and the last day of the month is typically paid on the last day of the month.
A 13th month pay is customary in The Netherlands and should be paid in November or December each year.
Taxes in Netherlands
Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Netherlands.
Employer
Corporate income tax rate: Netherlands has two tax rate brackets. If the taxable income is 245000 euro or less, the tax rate is 15%. If it is more, the corporate income tax rate is 36,750 euro plus 25% for the taxable amount exceeding 245000 euro.
Pension insurance:
Health insurance: 7,03%
Healthcare Act : 7.00%
Child Care Premium : 0.50%
Unemployment insurance : 2.70% – 7.70%
Total Employment cost : 17.23% – 22.23%
Employee
Old Age Pension (AOW) : 17.90%
Orphans and widow/widower pension (ANW) : 0.10%
Long Term Care (WLZ) : 9.65%
Total cost for employee : 27.65%
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