Euro Accountancy & Finance Services are fully registered as a Dutch Payrollprovider and, by law, any person working within the Netherlands has to be employed by a Dutch Payroll provider. The individual is employed through EAFS with income paid in the form of salary, expenses and allowances. The proportion of each depending and resting on individual circumstances.
Companies and organisations are constantly leveraging the worldwide market to extend their business operations and widen business goals and targets. Within these new markets, a local presence is vital for success. For overseas and foreign companies, the Netherlands offers itself as a premier destination for any globally growing multi-national company, not only because of its major entrance centers to the continent but also because the Dutch people as a nation are welcoming to any foreign investment and are hard working, well-educated and highly motivated.
Although employers and organisations will reap the benefits of working in the Netherlands, a number of challenges will present themselves; from complying with the complex Dutch labor laws through to ensuring that employees receive accurate and timely compensation. In order to combat these challenges and hurdles, it is advisable to follow the guidelines and the important aspects that employers should know.
Getting Started with Dutch Payroll
The first point to heed for payroll to be a success within the Netherlands is to set up the business properly. Although the Dutch Payroll law doesn’t require any employers to establish an office branch or legal entity it is strongly advised and the usual practise to do so. Whichever way you choose, the company is required to have a designated representative in the country in which to act as a liaison with the relevant tax office or social security organisation.
Companies are also required to open a local bank account for making the necessary payments to local authorities, also registering with the Dutch tax office to ensure contributions from employee and employers are received on a regular basis.
Complying with Employment Law…
Another important step is complying with the Dutch Payroll employment laws. Designed to protect the rights of Dutch workers, a highly important aspect requires employers to recognise that collective labour agreements take priority over statue law, if they are more favourable to the employee. Alongside this, minimum conditions already established by the collective agreement can only be improved upon and can’t head back the other direction in an individual employment contract.
Employment laws within the Netherlands also outline the maximum number of hours that can be worked, usually between 36 and 40 hours per week (with overtime pay for up to 48 hours), paired with the Dutch minimum wage of €342.85 per week.
The laws also principle the right to paid leave of a minimum of 20 days per annum, also including a holiday bonus equal to 8 per cent of the employee’s annual earnings.
Onboarding and Termination of Employees…
When taking on new employees the employer also has to ensure that workers sign a salary tax declaration. This will require their address and name, date of birth, social security number and if the employee wants to use a tax discount. Employers should also receive a copy of the employee’s passport and store it on file for up to five years after the employment has wrapped up.
When it comes to dismissing employees, no termination can be undertaken without the approval from the regional employment offices, although termination by mutual agreements doesn’t require authorization some form of documentation is often useful to prove compliance with the employment agreement – such as notice periods and payment for outstanding wages due.