Netherlands Payroll Information

Updated on: 2025/08/04 14:35 (UTC)

Overview

The Netherlands is a constitutional monarchy and member of the European Union. The country of the Netherlands is the principal component of the Kingdom of the Netherlands, which also includes the constituent countries of Aruba, Curaçao, and Sint Maarten; and the three special municipalities of Bonaire, Saba, and Sint Eustatius. In Dutch, which is the primary official language of the Netherlands, the name of the country of the Netherlands is Nederland.

The country of the Netherlands is in western Europe, while the other components of the Kingdom of the Netherlands are in the Caribbean Sea. The three special municipalities, which together are known as the BES Islands, are considered to be part of the country of the Netherlands but not part of Aruba, Curaçao, or Sint Maarten. The three constituent countries and three special municipalities of the Kingdom of the Netherlands that are in the Caribbean Sea have tax and employment requirements that differ from those generally in effect for the country of the Netherlands. This primer covers payroll provisions of the country of the Netherlands as are in effect for its mainland in Europe. Payroll aspects of Aruba are separately covered in

The Netherlands’ currency is the euro.

Employers in the country of the Netherlands are responsible for withholding income taxes and social insurance contributions, and remitting them to the Netherlands Tax and Customs Administration. Generally, all income taxes and social insurance contributions occur at the federal level.

Employers are required to maintain basic minimum standards of workplace protections for their employees, such as a minimum wage and a standard hourly workweek. Many work-related benefits are not mandated by law, but are established through worker contracts and collective agreements.

Foreign workers coming from outside the European Union are subject to the Dutch Foreign Labor Act, and generally are taxed at a similar rate as residents on all Netherlands-source income and must file a tax return with the government.

Residents of the Netherlands who are working in the United States are covered by U.S. tax law with possible treaty and work status exclusions applying. Work within the U.S. states and territories is covered by various labor laws.

CURRENCY DETAILS

The standard currency of the Netherlands is the euro (€), which the Netherlands uses because it is part of the euro area, also known as the eurozone, which is a group of countries that adopted the euro as their currency. The internationally recognized three-letter currency code for the euro is EUR, which also is one of the currency’s two commonly used currency symbols. The English plural form of euro officially recognized by the European Commission is the same as its singular form, although in common English parlance the plural form is euros. In Dutch, the standard plural form of euro also is the same as its singular form, although the plural form euro’s, which indeed includes an apostrophe, sometimes is used depending on context.

When an amount of euro is written using the currency symbol € in accordance with the European Commission’s standard placement treatment of the symbol, which is the placement treatment used for the English language, the symbol precedes the numerical value with no space between the numerical value and symbol. When an amount of euro is written in Dutch using the currency symbol €, the symbol precedes the numerical value with a space, or sometimes no space, between the numerical value and symbol.

When an amount of euro is written using the currency symbol EUR, the symbol precedes or follows the numerical value with a space or no space between the numerical value and symbol.

One hundredth ( ¹ ⁄ ₁₀₀ ) of a euro is referred to in English as a cent and the English plural form of cent officially recognized by the European Commission is the same as its singular form, although in common English parlance the plural form is cents. In Dutch, as officially recognized by the European Commission, one hundredth of a euro also is referred to as a cent and its standard plural form also is the same as its singular form, although the plural form of centen sometimes is used depending on context.

When amounts of euro are written in Dutch, the comma that in English separates the thousands place from the hundreds place instead is rendered as a dot (.), and the dot that in English separates the ones place from the tenths place instead is rendered as a comma.

An exception to the country of the Netherlands’ use of the euro as its currency is that the official currency of the three Caribbean special municipalities of Bonaire, Sint Eustatius, and Saba is the U.S. dollar.

Digital Currencies: The Netherlands does not consider bitcoin or other digital currencies to be legal tender.

Digital currency does not fall within the scope of the Act on Financial Supervision of the Netherlands because it does meet the definition of electronic money in the Netherlands, which is defined as “a monetary value stored on an electronic device or stored on-distance in a central accounting record,” and an “electronic money institution” as “a party, not being a bank, whose business it is to obtain the disposal of funds in exchange for which electronic money with which payments can be made is issued, also to parties other than the party issuing the electronic money.”

Digital currencies are generally considered assets or property under Netherlands law. Consequently, digital currency is generally taxed according to an employee’s respective basic income tax rates.

The European Banking Authority does not consider digital currencies to be legal currency. However, under a 2015 ruling by the European Court of Justice, bitcoin generally is considered a currency rather than a property for tax purposes in the European Union. Under the ruling, digital currency transactions are exempt from value-added tax (VAT) under a provision regarding transactions pertaining to currency, bank notes, and coins that are used as legal tender.

TAXES

Payroll taxes in the Netherlands are withheld under four categories: wage tax, national insurance contribution, employed persons’ insurance scheme contribution , and an income-dependent Health Care Insurance Act contribution .

The wage tax is an advance income tax, which can be partially refunded if employees do not owe the government any taxes or less taxes than the amounts withheld. The national insurance contribution is a social tax system and an obligatory insurance plan for all residents of the Netherlands that covers old age care, death, exceptional medical expenses, and/or child health problems. Netherlands social insurance contributions cover services for employees related to sickness, incapacity and unemployment, and is supplemented with additional sickness and medical care through other pieces of legislation.

The tax year in the Netherlands for payroll-related taxes is Jan. 1 to Dec. 31.

Coronavirus (Covid-19) Guidance: Agreements between the Netherlands and Belgium, effective from March 11, 2020, to March 31, 2022, and the Netherlands and Germany, effective from March 11, 2020, to at least March 31, 2022, allow days worked at home by cross-border commuters who live in one country and work in the other, but must work at home because of the new coronavirus, to count as days worked in the normal work country.

In both the European part of the Netherlands and the Caribbean Netherlands (Bonaire, Sint Eustatius, and Saba), employers could request postponements for income tax withholding and social tax deposits until Sept. 30, 2021, but must still file returns on time. If postponement for more than three months is requested, the employer must not pay bonuses to management or directors, cannot buy its own shares, and cannot pay dividends, effective from when the postponement is requested to the expiration or withdrawal of the postponement. However, this prohibition does not apply to bonuses that were scheduled in 2019 to be paid after the date when the postponement was requested. The interest rate was also reduced to 0.01%, or zero in the Caribbean Netherlands, on taxes due and late payment interest through Dec. 31, 2021.

Employers in both the European part of the Netherlands and the Caribbean Netherlands that continue to have difficulty paying taxes because of the pandemic may also request postponements to Jan. 31, 2022, of income tax withholding and social tax deposits due from Oct. 1, 2021, to Jan. 31, 2022, but must still file returns on time. Employers may request to pay any pandemic-related postponement in 60 monthly installments, with the first due Oct. 31, 2022.

Effective for 2020 and 2021, the tax-free threshold for the work-related costs scheme (werkkostenregeling, abbreviated as WKR) was increased to 3% of the employer’s total wage bill for the portion of the employer’s wage bill up to €400,000.

According to European Commission guidance, employees who normally work in one European Union member country and live in another are still considered to be insured by the social insurance system of the normal work country while working at home.

Income Taxes

The wage tax applies to wages paid to employees. The taxes are withheld by employers and should be remitted to the Tax and Customs Administration (Belastingdienst).

Coverage: Employers are liable to withhold payroll taxes in the Netherlands if the organization is a permanent establishment in the Netherlands and employees:

have been posted or transferred to the Netherlands;

work on the Dutch continental shelf; or

are covered under the national insurance schemes of the Netherlands.

Netherlands residents are subject to taxation on their worldwide income. Nonresidents also can opt for resident tax status if any of their worldwide earnings were accrued in the Netherlands.

Resident taxpayers are those who live or own property in the Netherlands. Residency status can be lost if Netherlands residents do not reside in the Netherlands during a consecutive three-year period.

Rates and Thresholds: The Netherlands has a progressive income tax system with increasing tax rates for increasing total annual income. These rates change almost every year.

Progressive personal tax brackets in the Netherlands are commonly rendered in two ways: one that includes only income tax rates, and one that includes total tax rates that for the first and second brackets are composites of income tax and social tax rates and that for the third and fourth brackets are only income tax rates. The latter way does not include social tax components for the third and fourth brackets because the social tax rates are in effect up to the maximum amount of income for the second bracket, but are not in effect after that amount.

Employees who reach the pensionable age are eligible for pensions under the country’s General Old Age Pensions Act, known in Dutch as the Algemene Ouderdomswet and abbreviated as AOW. The total tax rate assessed on employees, including income tax and social tax components, depends in part on whether they have reached the pensionable age, also known as the AOW age. The social taxes commonly included in progressive personal tax rate charts for Netherlands employees are three types of national insurance contributions: a contribution for old age pensions and unemployment, a contribution for sickness and maternity benefits, and a contribution for survivors’ benefits. Employees younger than the pensionable age are assessed all three of these types of national insurance contributions for the first and second personal tax brackets, while employees at least the pensionable age are not assessed the contribution for old age pensions and unemployment, but are assessed the other two types.

Effective for 2022, the pensionable age is 66 years and seven months. Effective for 2023, the pensionable age is 66 years and 10 months. Effective starting with 2024, the pensionable age is 67 years. Effective from Jan. 1, 2019, to Dec. 31, 2021, the pensionable age is 66 years and four months.

The maximum amount of annual income for an individual’s second personal income tax bracket and minimum amount of annual income for the individual’s second income tax bracket are influenced by whether the individual was born before Jan. 1, 1946, or on or after that date.

Effective for 2022, with regard to employees born before Jan. 1, 1946, all of whom are at least the pensionable age, the Netherlands’ personal tax rates and minimum and maximum amounts of annual income for each tax bracket are as follows:

Range of Annual Income (Euro)	Income Tax Rate	Total Tax Rate (Income Tax Plus National Insurance Contributions)
Up to €36,409	9.42%	19.17%
More than €36,409 and up to €69,398	37.07%	37.07%
More than €69,398	49.5%	49.5%

Effective for 2022, with regard to employees who are at least the pensionable age and were born on or after Jan. 1, 1946, the Netherlands’ personal tax rates and minimum and maximum amounts of annual income for each tax bracket were as follows:

Range of Annual Income (Euro)	Income Tax Rate	Total Tax Rate (Income Tax Plus National Insurance Contributions)
Up to €35,472	9.42%	19.17%
More than €35,472 and up to €69,398	37.07%	37.07%
More than €69,398	49.5%	49.5%

Effective for 2022, with regard to employees who are younger than the pensionable age and were born on or after Jan. 1, 1946, the Netherlands’ personal tax rates and minimum and maximum amounts of annual income for each tax bracket are as follows:

Range of Annual Income (Euro)	Income Tax Rate	Total Tax Rate (Income Tax Plus National Insurance Contributions)
Up to €35,472	9.42%	37.07%
More than €35,472 and up to €69,398	37.07%	37.07%
More than €69,398	49.5%	49.5%

Effective for 2021, with regard to employees born before Jan. 1, 1946, all of whom are at least the pensionable age, the Netherlands’ personal tax rates and minimum and maximum amounts of annual income for each tax bracket were as follows:

Range of Annual Income (Euro)	Income Tax Rate	Total Tax Rate (Income Tax Plus National Insurance Contributions)
Up to €35,941	9.45%	19.2%
More than €35,941 and up to €68,507	37.1%	37.1%
More than €68,507	49.5%	49.5%

Effective for 2021, with regard to employees who are at least the pensionable age and were born on or after Jan. 1, 1946, the Netherlands’ personal tax rates and minimum and maximum amounts of annual income for each tax bracket were as follows:

Range of Annual Income (Euro)	Income Tax Rate	Total Tax Rate (Income Tax Plus National Insurance Contributions)
Up to €35,129	9.45%	19.2%
More than €35,129 and up to €68,507	37.1%	37.1%
More than €68,507	49.5%	49.5%

Effective for 2021, with regard to employees who are younger than the pensionable age and were born on or after Jan. 1, 1946, the Netherlands’ personal tax rates and minimum and maximum amounts of annual income for each tax bracket were as follows:

Range of Annual Income (Euro)	Income Tax Rate	Total Tax Rate (Income Tax Plus National Insurance Contributions)
Up to €35,129	9.45%	37.1%
More than €35,129 and up to €68,507	37.1%	37.1%
More than €68,507	49.5%	49.5%

Registration: Employers are required to register with the Tax and Customs Administration. If employers are located outside of the Netherlands, but employ residents, then they register with the Tax and Customs Administration’s Department of International Issues by completing a registration form, from which the Coordination Point for International Supply of Employees (CIBA) Team addresses foreign company concerns.

Following registration, employers are provided with a payroll taxes number which accompanies any tax returns, filings or notices to or from the Tax and Customs Administration. Employers also will receive a payroll tax return letter, compliance forms and a handbook on the payroll system.

If employed in the Netherlands both resident and nonresident employees are required to possess a Citizen Service Number (BSN), which is a unique number given to Netherlands citizens who are registered with the Municipal Personal Records Database (GBA).

Employees, before their first day of employment, provide employers with a written form noting their surname, date of birth, Citizen Service Number (BSN), address and other details. This form also notes the payroll taxes credit, if applicable, which can reduce the payroll burden for employees. Employers are responsible for verifying this form and submitting the data to the tax authority, as well as transferring the information to the wage statement.

Employees also must sign up for a DigiD and DigiD authorization number to file taxes online through the Social Insurance Bank, known in Dutch as the Sociale Verzekeringsbank and abbreviated as SVB. This enables taxpayers to sign their documents digitally. Registration usually processes within five days.

Taxable Amounts: Taxable income from employment in the Netherlands includes income from employment in the Netherlands, earned from activities in the Netherlands, and from benefits in cash or in kind, among other sources of income.

The private use of a company car is regarded as part of the employee’s wages and is nondeductible, unless the employee’s private use of the car is limited to a maximum of 500 kilometers in a calender year.

Under the work-related costs scheme (werkkostenregeling, abbreviated as WKR), employers are allowed to provide some benefits tax-free, such as travel allowances, study costs, lunches, and Christmas hampers. Effective starting Jan. 1, 2021, employers may provide such items tax-free only if their total value is less than 1.18% of the employer’s total wage bill. If the total value of benefits exceeds 1.18% of the total wage bill, the employer must pay a tax of 80% on the excess. Effective until Dec. 31, 2020, the 1.18% threshold was instead 1.2%.

Effective starting Jan. 1, 2020, the tax-free threshold is 1.7% of the employer’s total wage bill for the portion of the wage bill that is up to €400,000, except effective for 2020 and 2021, the tax-free threshold was increased to 3% of the employer’s total wage bill for the portion of the wage bill up to €400,000. For the portion of the wage bill above €400,000, the 1.18% threshold still applies.

Withholding Methods: Employers are required to withhold taxes electronically using employee identification numbers. Employers must verify their employees’ identities before employment through passports, identity cards, or other forms of official identification and retain copies of these documents.

Employers and employees should have an International Bank Account Number (IBAN), which is used for all domestic and European tax payments. The IBAN contains 18 characters. Employers and employees can use this account number to pay their income taxes to the government.

Returns and Remittance: Employers withhold income taxes at source once every four weeks, or monthly, and must present employees with a pay slip at that time, which includes employee and employer payroll taxes, wage amounts, tax-deductible items and the taxed amounts.

Effective since Feb. 1, 2020, payroll tax returns must be filed online through the government’s My Tax and Customs Administration (Mijn Belastingdienst Zakelijk, abbreviated as MBD-Z) portal.

Employers must issue an annual income statement to employees following the conclusion of the calendar year. This form must list all information relevant to preparing income tax returns, including total wages, taxes, an employee’s tax and social insurance number, and total tax credits, among other things.

Employers report employee withholding taxes through a return at the end of the year, including per-employee data, total wage data, payroll data, the total amount of premium discounts, late-payment charges, and deductions.

Employee Share Plans: Employees generally are taxed at exercise on the difference between the fair market value of the shares and the price paid for the shares. The difference between the fair market values of the shares and the price paid for the shares at exercise also is subject to withholding for social security contributions.

Recordkeeping: Employers withholding payroll taxes generally must retain each of their employees’ payroll records for at least seven years. Employee registration forms must be retained by employers for a minimum of five years.

The Tax and Customs Administration assists employers in properly recording documents by providing reminders and form instructions. Employers may record all payroll information electronically. Additionally, employers must verify and properly record employee information, including residency and taxation statuses.

Penalties: Late filing of payments or returns typically is liable for interest and penalties. Late payments result in an interest fine of 10%, with a minimum of €50 and maximum of €5,278. Late filing of returns is subject to a fine of €65. Penalties for repeated late payments may result in an interest fine of 10%, with a maximum of €5,278.

Gross negligence or an intent to deceive on tax forms may result in fines of 100% of the tax value. If mitigating situations exist, this penalty may be reduced to 25% or 50%.

Social Taxes

Employers are required to comply with the provisions of the General Old Age Pensions Act, the National Survivor Benefits Act, the Long-Term Care Act, the General Children’s Benefit Act, the Sickness Benefits Act, the Occupational Disability Insurance Act, the Partially Disabled Workers Act, the Unemployment Insurance Act, and the Health Care Insurance Act. All relevant contributions under these acts are collected by the country’s Tax and Customs Administration.

Coverage: Employers that carry out business in the Netherlands or employ workers in the Netherlands typically are required to pay social taxes. Depending on the residency of workers, such as those residing in Belgium and working in the Netherlands, employers may not be required to withhold and remit some or all national insurance contributions.

For applicability of social taxation, workers are categorized into two primary groups: employees who are younger than the pensionable age and employees who are at least the pensionable age.

Effective for 2022, the pensionable age is 66 years and seven months. Effective for 2023, the pensionable age is 66 years and 10 months. Effective starting with 2024, the pensionable age is 67 years. Effective from Jan. 1, 2019, to Dec. 31, 2021, the pensionable age is 66 years and four months.

Rates and Thresholds: Social insurance is divided into three types of obligatory assessments: the national insurance contributions, the employed persons’ insurance schemes contributions, and the Health Care Insurance Act contributions. These assessments help fund old-age pensions, survivor benefits, unemployment insurance, injury insurance, and maternity leave, among other aspects.

National insurance contributions: National insurance contributions are withheld from employees’ wages and help fund programs under the General Old Age Pensions Act (Algemene ouderdomswet, abbreviated as AOW), General Survivor Benefits Act (Algemene nabestaandenwet, abbreviated as ANW), Long-Term Care Act (Wet langdurige zorg, abbreviated as WLZ), and General Children’s Benefit Act (Algemene kinderbijslagwet, abbreviated as AKW).

Effective for 2022, the maximum amount of annual wages on which national insurance contributions are assessable for employees younger than the pensionable age is €35,472. Effective for 2021, the maximum amount of annual wages on which national insurance contributions are assessable for employees younger than the pensionable age is €35,129.

Effective for 2022 and 2021, employers are responsible for withholding from wages of employees younger than the pensionable age a total national insurance contribution rate of 27.65%, composed of a contribution for old age pensions and unemployment of 17.9%, a contribution for sickness and maternity benefits of 9.65%, and a contribution for survivors’ benefits of 0.1%.

Effective for 2022, the maximum amount of annual wages on which national insurance contributions are assessable for employees who are at least the pensionable age is €36,409. Effective for 2021, the maximum amount of annual wages on which national insurance contributions are assessable for employees who are at least the pensionable age is €35,941. Effective for 2020, the maximum amount of annual wages on which national insurance contributions are assessable for employees who are at least the pensionable age was €35,375.

Effective for 2022 and 2021, employers are responsible for withholding from wages of employees who are at least the pensionable age a total national insurance contribution rate of 9.75%, composed of a contribution for sickness and maternity benefits of 9.65% and a contribution for survivors’ benefits of 0.1%.

Employed persons’ insurance scheme contributions: As part of the employed persons’ insurance scheme, contributions for the occupational disability fund (Arbeidsongeschiktheidsfonds, abbreviated as AOF) are assessed on employers under the Occupational Disability Insurance Act and Partially Disabled Workers Act, a surcharge to cover a childcare allowance (Opslag tot dekking kinderopvangtoeslag) under the disability program is assessed on employers under the Childcare Act, and contributions for the general unemployment fund (Algemeen werkloosheidsfonds, abbreviated as AWF) are assessed on employers under the Unemployment Insurance Act. Effective starting Jan. 1, 2020, employers pay a low unemployment insurance contribution for employees that have permanent contracts, and a high unemployment insurance contribution for employees without permanent contracts. Effective starting Jan. 1, 2022, small employers are assessed a lower disability insurance contribution if in the second year before the contribution rate takes effect they paid wages subject to social taxes that are up to 25 times the average social-taxable annual wage per employee.

The contributions are subject to a maximum annual amount of wages paid to an employee upon which they may be assessed. This amount also is known as the maximum premium wage (maximum premieloon).

Effective for 2022, the maximum annual amount of wages paid to each employee upon which employers are assessed contributions for employed persons’ insurance schemes is €59,706. Effective for 2021, the maximum annual amount of wages paid to each employee upon which employers are assessed contributions for employed persons’ insurance schemes is €58,311.

Effective for 2022, employers are assessed as a percentage of employee payroll either a high disability insurance contribution of 7.05% or a low disability insurance contribution of 5.49%, a disability insurance surcharge for childcare of 0.5%, and either a low unemployment insurance contribution of 2.7% or a high unemployment insurance contribution of 7.7%. Effective from Aug. 1 to Dec. 31, 2021, employers were assessed as a percentage of employee payroll a disability insurance contribution of 7.03%, a disability insurance surcharge for childcare of 0.5%, and either a low unemployment insurance contribution of 0.34% or a high unemployment insurance contribution of 5.34%. Effective from Jan. 1 to July 31, 2021, employers were assessed as a percentage of employee payroll a disability insurance contribution of 7.03%, a disability insurance surcharge for childcare of 0.5%, and either a low unemployment insurance contribution of 2.7% or a high unemployment insurance contribution of 7.7%.

Employers also are assessed for the employed persons’ insurance schemes a contribution for the government agency implementation fund (Uitvoeringsfonds voor Overheidsinstellingen, Uitvoeringsfonds voor de overheid, both abbreviated as UFO).

Additionally, employers are assessed as part of the employed persons’ insurance scheme a return-to-work fund contribution. Sector fund contributions were abolished, effective Jan. 1, 2020. The applicable contribution rates for this fund vary among industry sectors. The Tax and Customs Administration indicates the current rates for these funds for each sector online in the rates, amounts, and percentages overview in its payroll taxes handbook. Within the overview, rates for the return-to-work fund contribution are available in Table 10.

Effective for 2022, total contribution rates for the return-to-work fund, including the Partially Disabled Workers Act national insurance component and the Sickness Benefits Act national insurance component for flexible employment, range from 0.38% to 6.08%. Effective for 2021, total contribution rates for the return-to-work fund, including the Partially Disabled Workers Act national insurance component and the Sickness Benefits Act national insurance component for flexible employment, ranged from 0.33% to 5.44%.

Health Care Insurance Act contributions: Employees and employers are assessed contributions under the Health Care Insurance Act (Zorgverzekeringswet, abbreviated as ZVW). Employers must withhold employee contributions from their wages to comply with the act.

The maximum amount of annual wages paid to an employee on which Health Care Insurance Act contributions are assessable on the employee is the same as the maximum annual amount of wages per employee upon which employers are assessed contributions under the act.

Effective for 2022, the maximum amount of annual wages on which Health Care Insurance Act contributions are assessable for employees and employers is €59,706. Effective for 2021, the maximum amount of annual wages on which Health Care Insurance Act contributions are assessable for employees and employers was €58,311.

Effective for 2022, employees are assessed a Health Care Insurance Act contribution rate of 5.5% and employers are assessed a contribution under the act of 6.75%. Effective for 2021, employees are assessed a Health Care Insurance Act contribution rate of 5.75% and employers are assessed a contribution under the act of 7%.

Registration: As social contributions are collected at the same time and in the same manner as income taxes withheld at source by employers, the protocol for registration for social taxes is the same as the protocol for registration for income taxes.

Taxable Amounts: Employee wages, payments in cash or in kind, and other benefits and gratuities, minus any deductions, are subject to withholding taxes for social insurance programs.

Withholding Methods: Social contributions are deducted from each paycheck, with paychecks usually issued once every four weeks. Payroll taxes are calculated online, through a Netherlands governmental service, although manual calculations are permitted using tax tables.

Returns and Remittance: Employers withhold social contributions at source once every four weeks, or monthly if payments are made monthly instead of every four weeks, and must present employees with a pay slip at that time, which includes employee and employer payroll taxes numbers, total wage amounts, tax-deductible items, and the amounts of wages subject to tax. Payroll taxes must be filed online, either through the government’s website for up to 10 workers or through another digital software system.

Employers must issue an annual income statement to employees following the conclusion of the calendar year. This form must list all information relevant to preparing income tax returns, including total wages, taxes, an employee’s tax and social insurance number, and total tax credits, among other things.

Employers report employee withholding taxes through a return at the end of the year, including per-employee data, total wage and payroll data, and the total amount of premium discounts, late-payment charges, and deductions.

Recordkeeping: Employers withholding payroll taxes generally must retain each of their employees’ payroll records for at least seven years. Employee registration forms must be retained by employers for a minimum of five years.

Penalties: Late-filing of payments or returns typically are liable for interest fees and penalties. Late-payments result in an interest fine of 10%, with a minimum of €50 and maximum of €5,278. Late filing of returns is subject to a fine of €65. Penalties for repeated late payments may result in an interest fine of 10%, with a maximum of €5,278.

Gross negligence or an intent to deceive on tax forms may result in fines of 100% of the tax value. If mitigating situations exist, this penalty may be reduced to 25% or 50%.

Other Taxes

The Netherlands’ national government does not assess any taxes on employment income other than those covered in the Income Taxes and Social Taxes sections of this primer.

State/Jurisdiction Taxes

The three Caribbean special municipalities of Bonaire, Sint Eustatius, and Saba have income tax and social tax provisions that differ from those generally in effect for the country of the Netherlands.

Personal income tax: Individuals in Bonaire, Sint Eustatius, and Saba are subject to two personal income tax brackets with rates of 30.4% and 35.4%. A certain amount of income, which is U.S. $12,198 in 2022, is tax-free.

Effective for 2022, the Caribbean Netherlands’ personal income tax rates and the minimum and maximum of income applicable to each bracket were as follows:

Range of Annual Income (U.S. Dollars)	Income Tax Rate
Up to U.S. $12,198	Zero
More than U.S. $12,198 and up to U.S. $281,921	30.4%
More than U.S. $281,921	35.4%

Effective for 2021, the Caribbean Netherlands’ personal income tax rates and the minimum and maximum of income applicable to each bracket were as follows:

Range of Annual Income (U.S. Dollars)	Income Tax Rate
Up to U.S. $12,575	Zero
More than U.S. $12,575 and up to U.S. $290,640	30.4%
More than U.S. $290,640	35.4%

Social taxes: Employer social tax contributions in the Caribbean special municipalities of Bonaire, Sint Eustatius, and Saba consist of premiums for health insurance (Zorgpremie, abbreviated as Zorg), sickness insurance (Ziekteverzekering, abbreviated as ZV), accident insurance (Ongevallenverzekering, abbreviated as OV), and a one-off unemployment insurance payment, which in the Caribbean Netherlands is called a cessantia. The exact contribution rates are annually determined by the Netherlands’ Ministry of Social Affairs and Employment, except for the health insurance rate, which is determined by the Ministry of Health, Welfare, and Sport.

Effective for 2021, unchanged from 2020, the total employer social tax rate is 13.4%, and includes a contribution rate of 11.7% for health insurance, a contribution rate of 1.3% for sickness insurance, a contribution rate of 0.3% for accident insurance, and a cessantia contribution rate of 0.1%.

Employee social tax contributions in the Caribbean special municipalities consist of a contribution rate of 25% for pension insurance (Algemene Ouderdomsverzekering, abbreviated as AOV), a contribution rate of 1.3% to the Widow’s, Widower’s, and Orphan’s Pension (Algemene Weduwen- en Wezenverzekering, abbreviated as AWW), and a 0.5% contribution rate for health insurance.

The Caribbean special municipalities’ employee social tax contributions are assessed up to an annual maximum limit, which is U.S. $31,517 of taxable income in 2022, and was U.S. $32,493 of taxable income in 2021. As with income tax, a certain amount of income, which is U.S. $12,198 in 2022 and was U.S. $12,575 in 2021, is tax-free. Employees receive credits towards income tax owed based on the amount of social tax contributions paid.

COMPENSATION AND BENEFITS

Under the Minimum Wage and Minimum Holiday Allowance Act, the Work and Care Act, and the Parental Leave Act, employers are required to maintain basic minimum standards of workplace protections for their employees. These rights include a standard minimum wage for workers at least 21 years of age, as well as a standard hourly workweek. Notably, overtime and holidays are established through worker contracts and collective agreements.

Employees are guaranteed four times the total days of work per week in vacation per year. For most workers, this results in 20 days per year of vacation, as well as maternity leave, sickness leave and other types of need-based vacation.

Coronavirus (Covid-19) Guidance: From Nov. 16 to Dec. 13, 2020, Feb. 15 to March 14, 2021, May 6 to June 30, 2021, and July 26 to Sept. 30, 2021, employers may apply for a wage-replacement program, the Temporary Emergency Bridging Measure for Sustained Employment (Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud, abbreviated as NOW), covering October to December 2020, January to March 2021, April to June 2021, and July to September 2021, respectively. These applications are part of a third wave of NOW.

The subsidy replaces a percentage of employees’ wages reported for February 2021 depending on the employer’s reduction in income, up to a maximum of 85% of employees’ wages, and provides an additional 40% increase to cover employer and employee social taxes and holiday allowances, with a maximum reportable monthly wage per employee for the purposes of calculating the subsidy of €9,813.

To qualify for months starting with April 2021, the employer must have suffered at least a 20% decrease in income over a three-month period. The three-month period must start with July, August, or September 2021 if the employer did not apply previously, or, if the employer did apply previously, the three-month period must be continuous with the previously required three-month period.

Previously, employers could apply for the second phase of NOW subsidies, or NOW2, which covered June to September 2020 until Aug. 21, 2020, and the first wave of NOW subsidies which covered March to June 2020 until June 5, 2020.

Employers may generally provide to employees tax-free reimbursements of travel costs of up to €0.19 per kilometer, and may continue to do so for employees working at home until Jan. 1, 2022. To benefit, an employee must have also received reimbursements before March 13, 2020.

Minimum Wage

Under the Minimum Wage and Minimum Holiday Allowance Act, employers must pay employees the statutory minimum wage to which they are entitled based on their age.

Effective from Jan. 1 to June 30, 2022, the minimum wage for employees at least 21 years of age is €1,725 per month, €398.10 per week, or €79.62 per day.

Effective from July 1 to Dec. 31, 2021, the minimum wage for employees at least 21 years of age is €1,701 per month, €392.55 per week, or €78.51 per day. Effective from Jan. 1 to June 30, 2021, the minimum wage for employees at least 21 years of age is €1,684.80 per month, €388.80 per week, or €77.76 per day.

Flex-workers, such as on-call employees or individuals who work at home, also are entitled to the full minimum wage.

Effective since July 1, 2019, workers younger than 21 years of age may be paid percentages of the full statutory minimum wage under an age-based sliding scale, with the percentages of the full statutory minimum wage that must be paid for each eligible younger age as follows:

• 80% for employees who are 20 years of age;
• 60% for employees who are 19 years of age;
• 50% for employees who are 18 years of age;
• 39.5% for employees who are 17 years of age;
• 34.5% for employees who are 16 years of age; and
• 30% for employees who are 15 years of age.

Caribbean Netherlands: The Caribbean special municipalities of Bonaire, Sint Eustatius, and Saba each have their own hourly minimum wages, expressed in U.S. dollars. The minimum wages in Bonaire, Sint Eustatius, and Saba are subject to annual adjustment Jan. 1.

Effective for 2022, the hourly minimum wage in Bonaire is U.S. $6.03, in Sint Eustatius is U.S. $7.30, and in Saba is U.S. $7.19. Effective for 2021, unchanged from 2020, the hourly minimum wage in Bonaire was U.S. $5.48, in Sint Eustatius was U.S. $6.63, and in Saba was U.S. $6.64.

Employers must pay the full statutory minimum wage to workers who are at least 21 years of age, but younger workers may be paid percentages of the statutory minimum wage. The percentages for each age in the Caribbean Netherlands are:

• 90% for employees who are 20 years of age;
• 85% for employees who are 19 years of age;
• 75% for employees who are 18 years of age; and
• 65% for employees who are 16 or 17 years of age.

Overtime

If workers are permitted by their employers to work beyond the weekly work-time minimum, then they may be entitled to overtime pay at a higher rate or days off to offset that time. However, the Netherlands does not have a national standard for overtime and overtime rates of pay typically are established in employment contracts or collective bargaining agreements.

Hours of Work

Full-time employment usually ranges from 36 to 38 hours per week. Under the Working Hours Act, the maximum workday is 12 hours and the maximum workweek is 60 hours.

Over a four-week period, however, an employee’s workweek cannot average more than 55 hours. Over a 16-week period, it cannot average more than 48 hours. After a worker’s shift, his or her next shift cannot start for at least 11 hours, though once a week this can be shortened to eight hours. After a five-day workweek, an employee may not work for at least 36 consecutive hours, though a longer workweek is possible, provided the employee has a rest period of at least 72 hours once every 14 days.

For night-shift workers, the restrictions on work hours are more severe. The maximum night shift is 10 hours, and the average workweek cannot exceed 40 hours over a 16-week period. After a night shift, a worker’s next shift must start at least 14 hours later, and if an employee works a series of three or more night shifts, the next shift cannot start for at least 46 hours.

Employers must provide employees with daily rest periods of at least 30 minutes if they work for more than five and a half hours. If an employee works for more than 10 hours, the employee must be given a rest period of at least 45 minutes.

Holidays

The Netherlands does not require employers to give workers national or public holidays off or to pay them extra if they work on those days. Employer policies on holiday leave are established by collective bargaining agreements or employment contracts.

The following national holidays (feestdagen) are recognized by the government of the Netherlands:

• Jan. 1: New Year’s Day (Nieuwjaarsdag)
• Good Friday (Goede vrijdag)
• Easter Sunday (Paaszondag) and Easter Monday (Paasmaandag), also known in the Netherlands as First Easter Day and Second Easter Day (eerste Paasdag en tweede Paasdag)
• April 27: King’s Day (Koningsdag)
• May 5: Liberation Day (Bevrijdingsdag), with it being common for collective labor agreements to include Liberation Day as a paid day off once every five years, with the next paid day off occurring in 2025
• Ascension (Hemelvaartsdag)
• Pentecost (Pinksteren), including Whit Sunday and Whit Monday, also known in the Netherlands as First Pentecost Day and Second Pentecost Day (eerste Pinkstersdag en tweede Pinksterdag)
• Dec. 25: Christmas Day (Kerstdag), also known in the Netherlands as First Christmas Day (eerste Kerstdag)
• Dec. 26: Boxing Day, also known in the Netherlands as Second Christmas Day (tweede Kerstdag)

Caribbean Netherlands: In addition to the holidays celebrated in the country of the Netherlands in mainland Europe, the Caribbean special municipalities of Bonaire, Saba, and Sint Eustatius celebrate May 1 (Labor Day) as a holiday, but with regard to Pentecost only celebrate the first day of Pentecost as a holiday. Effective starting with 2020, in Sint Eustatius and Saba, the day after the Carnival parade is a holiday, and in Bonaire, Rincon Day, April 30, is a holiday. Each island has an additional island-specific holiday: Sept. 6 for Bonaire, Nov. 16 for Sint Eustatius, and the first Friday in December for Saba.

Leave

Employees receive paid annual vacation leave of at least four times the number of days they regularly work each week. For example, an employee who works five full-time days a week receives 20 days, or four weeks, of paid vacation each year.

Many collective bargaining agreements provide for more than the minimum annual vacation allowance, and often grant 25 days of paid vacation to employees. Employed youth who attend school at least two days a week are entitled to at least 12 vacation days annually.

In addition, employees are paid a holiday allowance each year that amounts to 8% of their gross annual salary. The holiday allowance must be paid at least once a year, usually at the end of May or beginning of June.

Sickness Leave: If a temporary or permanent employment contract is in effect and a worker becomes ill, up to two years of paid sick leave is provided at a minimum of 70% of the wages the employee last earned. Under the Gatekeeper Improvement Act, the employer and the employee are jointly responsible for reintegrating the employee into the workplace following return to work. An individual cannot be fired while on sick leave during those two years, unless the employer acquires a governmental determination the individual is not sufficiently cooperating with reintegration into the workplace or that the worker is regularly ill and disrupting production. The government agency that would issue the determination is the Public Employment Service Division, known in Dutch as WERKbedrijf, of the Employee Insurance Agency, known in Dutch as the Uitvoeringsinstituut Werknemersverzekeringen and abbreviated as UWV. The UWV is a a semi-governmental organization with authority in various employment-related areas.

Individuals who do not have an employer, such as flex-workers or temporary workers without a permanent contract with a temporary employment agency, are eligible for sick leave benefits under the Sickness Benefits Act. A worker is entitled to at least 70% of his or her daily regular wages, with the maximum daily amount required to be paid this way per day equal to the maximum daily wage amount used for governmentally required paid leave calculations, which, effective July 1, 2021, is €225.57 per day. Collective bargaining agreements and employment contracts often specify that an employee during the first year of sick leave must be paid at least the full amount of his or her daily regular wages instead of at least 70%.

During the first year of the sick leave, the employer must pay an employee on sick leave at least the minimum daily wage, although this requirement is not in effect for the second year.

Pregnancy and Maternity Leave: The Netherlands offers pregnancy and maternity leave, with pregnancy leave defined as leave for a pregnant employee in preparation for a birth and maternity leave defined as leave for a mother to care for a newborn.

Under the Work and Care Act, employees generally are entitled to a minimum of 16 weeks of pregnancy and maternity leave at full pay, up to a maximum, effective since July 1, 2021, of €225.57 per day. If the pregnancy causes an illness before or after the leave, the employee is entitled to full pay, up to the maximum, effective since July 1, 2021, of €225.57 per day, for up to two years.

Pregnancy leave can begin up to six weeks before the baby is due and generally must start no later than four weeks before the baby’s due date. Maternity leave generally is available for the 10 weeks following the baby’s expected due date, but if birth occurs after the expected due date, the standard 10 weeks of leave starts on the actual date of birth, and the time between the expected and actual due dates as well is covered by paid leave. Employees may return to work earlier than 10 weeks after the date of birth if they would like to do so, but they may not return sooner than 42 days after giving birth. Employers cannot refuse a request for pregnancy and maternity leave. Up to two weeks of pregnancy leave that was eligible to be taken before a birth but was not taken before the birth may be taken after the birth in the form of additional maternity leave. If a newborn is hospitalized soon after birth or during the maternity leave, the standard 10 weeks of maternity leave would reset to starting when the newborn leaves the hospital, with the time between the birth and the newborn leaving the hospital becoming additional maternity leave.

Female employees who are expecting multiple births have a standard combined pregnancy and maternity leave entitlement of 20 weeks instead of 16 weeks. Of these weeks of leave, at least eight weeks generally would be taken as pregnancy leave, with a maximum of 10 weeks taken as pregnancy leave.

The Working Time Act of 1996 provides mothers who return to work after giving birth the right to feed the infant and express breast milk on the job site for up to nine months after birth. Nursing mothers in the workplace receive full pay and are eligible to use this option up to one quarter of their working time.

Paternity Leave: Effective since July 1, 2020, an employee whose wife or partner gives birth is entitled to a standard period of one week of paid leave within four weeks of the birth of the child and an additional period of five weeks of paid leave (at 70% of full pay), which can be taken within six months of the birth of the child.

Effective from Jan. 1, 2019, to June 30, 2020, an employee whose wife or partner gave birth was entitled to either one day of paid leave at full salary on the day of birth; or one week of paid leave at full salary that could be taken within four weeks of the birth, at the employee’s discretion.

Parental Leave: The Parental Leave Act of 1990 grants full-time and part-time workers who have children or are raising children younger than age eight unpaid parental leave. A collective labor agreement may include provisions that provide for paid leave. A worker becomes eligible for parental leave after having worked for an employer for one year.

The maximum amount of leave per child is 26 times the employee’s working hours per week. An employee who works 40 hours per week, for example, would be eligible for 1,040 hours per year of parental leave per child, the result of multiplying 40 hours per week by 26 weeks. Parents usually take this leave by working half their normal hours but can make arrangements with an employer to take more hours in a shorter period or to spread the leave out over more than a year. An employer cannot refuse a request for parental leave.

Effective Aug. 1, 2022, the government is planning to begin providing the first nine weeks of parental leave as paid leave, which must be used in the first year after the child’s birth. The daily benefit is to be 50% of the employee’s daily wage, up to a maximum of 50% of the maximum daily amount used to calculate other leave benefits.

Adoption Leave: Adoption and foster leave benefits are available for employed and self-employed parents. Employees can take a maximum of six weeks of consecutive adoption leave, beginning as early as four weeks before the adoption but continuing no more than 22 weeks after the adoption.

Employees on adoption leave are entitled to an allowance that matches their salary, up to a maximum daily amount, effective since July 1, 2021, of €225.57 per day. The adoption allowance remains available if an employee’s contract ends or the employee resigns or loses his or her job and adopts or fosters a child within 10 weeks of termination of employment.

The Work and Care Act also provides up to four weeks of leave, with compensation daily, for employees or the self-employed involved in the adoption or fostering of a child. The UWV pays this benefit, not the employer. To qualify, an employee must have worked for his or her present employer for at least a year. Leave can be taken by both parents. Employers are not allowed to refuse this type of leave.

Emergency Leave: The Work and Care Act provides paid emergency leave to employees who experience unforeseen personal events, such as a family member’s death or illness, a partner giving birth or a home-repair emergency. If the leave is needed because a child or partner becomes ill, the first day of an employee’s absence may be taken as emergency leave but subsequent days must be taken as compassionate or short-term leave. While employers may not refuse to grant a reasonable request for emergency leave, they may require afterward that the employee prove the leave was necessary.

Short-term Care Leave: This leave is available for employees who have to provide care for a parent, sick child, or partner, if the employee is the only person able to provide the care at that time. The maximum amount of leave is twice the employee’s working hours per week. An employee who works 40 hours per week, for example, would be eligible for 80 hours of short-term care leave within 12 months. The twelve month period begins on the first day of the leave. During a short-term care leave, employees are entitled to at least 70% of their salaries. Employers can refuse to grant short-term care leave if it would seriously disrupt company operations.

Long-Term Compassionate Leave: This type of leave, which is unpaid unless otherwise provided in the employer’s collective bargaining agreement, is granted when an employee must take care of a seriously ill child, partner or parent over an extended period. The employee must request leave two weeks in advance and is entitled over a 12-week span each year to up to half the number of hours he or she normally works. Employers can refuse to grant long-term compassionate leave if it would seriously disrupt company operations. Provisions in a collective bargaining agreement for long-term compassionate leave supersede the law.

Life-Course Savings Plan Leave: The life-course savings plan allows employees to make tax-free contributions to a special savings account that will give them money to use in taking unpaid leave for any purpose. Workers are allowed to save up to 12% of their gross salary each year to a total of 210% of their wages. The plan closed to new participants Jan. 1, 2012, and only employees that had saved at least €3,000 as of Dec. 31, 2011, may continue to use the plan.

Employers can also allow employees to convert overtime or extra vacation time into savings contributions. Savings are tax-deferred, taxed only when withdrawn and even then subject to a tax discount. Employees 51 or older but not yet 56 can save more than 12% of their gross annual salary, but the 210% total limit still applies. Workers who were 56 or older on Dec. 31, 2005, are not allowed to use this accelerated savings option. Life-course savings can also be used to supplement a pension.

Wage Payment

Employees are paid either weekly or monthly and must provide their employees with pay slips with information about their salaries. The pay slip in the Netherlands is very detailed, with information regarding gross wages, post-tax wages, the accrued vacation allowance, withholding amounts, and other payment figures.

Bonuses and Special Benefits

The Netherlands does not require employers to provide bonus payments to employees but a 13th month bonus is customarily given to employees in November or December.

Termination Pay

Employers in the Netherlands must obtain permission from the Public Employment Service Division of the UVW before terminating an employment contract except in cases of summary dismissal or judicial intervention. Employment contracts can be terminated by mutual consent, during a probationary period, or for various other reasons, including the cessation of a contract, failure to meet a condition of employment, serious negligence/misconduct and other reasons.

Employers are required to inform UVW and the trade unions in cases of collective redundancy, outlining the reasons for the dismissals and identifying affected employees. The period of notice may be specified in a contract or a collective labor agreement; otherwise, the required period is from one month to four months, depending on how long the employee has worked for the company.

Employees who believe they have been fired without just cause must file a written objection with the employer. The employer then goes to the Public Employment Service or the courts to pursue dismissal.

Employee dismissals are prohibited if they are based on discrimination, such as gender or pregnancy, or on a worker’s participation in a labor action, such as a strike, or on a works council.

Occupationally disabled employees cannot be terminated until they have exhausted two years of leave unless a collective labor agreement allows it or the UVW received the employer’s request for dismissal before the disability was incurred or determines the worker isn’t cooperating with efforts to be reintegrated into the workplace.

In cases of mass layoffs, employers must use seniority in determining which workers to terminate. Employees with comparable jobs are categorized into age groups and those with the least seniority in each age group must be let go first. An employer can keep a particular employee regardless of seniority, however, if it can show that the employee is indispensable to the organization or that it would be harder for that worker than for other employees to find another job.

Upon termination of employment, employers generally are required to pay a financial compensation called the transition fee. To be eligible for a transition fee, the employee must have been employed for at least two years and the employment contract must have ended at the employer’s initiative.

Workers’ Compensation

Employers pay into the workers’ compensation system, which is governed by the Work and Income According to Labor Capacity Act (Wet werk en inkomen naar arbeidsvermogen, abbreviated as WIA).

An injured worker is entitled to paid sick leave for up to two years. If a worker has not recovered after two years, the UVW will examine the person to determine the degree of incapacity, which is calculated in terms of how much the injury has affected the worker’s wages. If the loss is less than 35%, the worker is not considered disabled and returns to work. Those whose loss is more than 35% and whose injury is considered temporary are placed under the Return to Work Plan for the Partially Disabled (WGA) and receive benefits of up to 75% of pay for up to three years and two months and may be required to return to work on a part-time basis if they are able. There are additional benefits for workers who exhaust their WGA benefits before they regain full earning capacity.

If, after two years of sick leave, the worker is determined to be able to earn no more than 20% of pre-injury wages and to have no chance of recovery, he or she is placed under the Income Provision Plan for People Fully Occupationally Disabled and receives 75% of previous wages up to a maximum, effective since July 1, 2021, of €225.57 per day.

Recordkeeping

Employers must keep accounting records for seven years. This includes hours worked for each employee, total wages paid, total taxes withheld, and other details.

FOREIGN WORKERS

Employers seeking to use foreign workers in the Netherlands must ensure that the prospective employees are legally capable of working in the country, as defined by the Foreign Labor Act. Foreign workers are defined as those from outside of the European Union (EU)/European Economic Area (EEA) or Switzerland and must be paid a competitive wage with Dutch workers. The Ministry of Social Affairs and Employment is entitled to set quota standards on employment of foreigners in certain sectors.

Multiple types of visas are available to foreign workers. Almost all European nationals and most nationals from the Americas, as well as some in Asia, are not required to get a visa prior to arrival. Other nationals may need to apply for a Schengen visa for stays up to 90 days. For longer stays or longer term employment, foreign workers must apply for and receive an authorization for temporary stay (MVV) and, potentially, a temporary regular residence permit.

Both foreign and domestic employers are responsible for withholding payroll taxes on all employees. The Netherlands payroll taxes include both income taxes and social insurance contributions, although which taxes employees are subject to depends on their status. For example, employees who do not qualify for Dutch health insurance do not have to pay into the system. Otherwise, nonresident workers are taxed at a similar rate as residents on all Dutch income and must file a tax return with the government.

Visas: For foreigners from most of Europe, the Americas, and parts of Asia, entrance into the Netherlands merely requires a valid passport and reason for entrance, as well as the absence of a security risk. Citizens of the United States are in this category. For other foreign residents, visas for entrance into the Netherlands are divided into four primary categories and are dependent on the origin of the passport with which the foreign resident is traveling:

Schengen Visas: Many foreigners are required to get a Schengen visa prior to entering the Netherlands for stays of up to 90 consecutive days in a period of 180 days. The Schengen Area comprises 26 different countries in Europe, including Austria, Belgium, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, the Netherlands, Slovakia, Slovenia, Spain, Sweden and Switzerland. The Schengen visa does not guarantee unlimited travel within the Schengen Area, however, and may be restricted to only one country per approval.

Applicants must apply within three months of their planned arrival using a visa application form submitted to the Netherlands embassy or consulate. Applicants may be asked to disclose their financial ability to visit the Netherlands. Visas usually are approved after one month, but may require as long as two months to process, and require a fee to be paid.

Family of EU/EEA Nationals: Family members of European Union and European Economic Area nationals, as well as Swiss nationals, may qualify for an accelerated free visa application process, if they require a Schengen visa. Applicants must be traveling as a first-degree relative of an EU/EEA or Swiss national within the EU/EEA/Swiss region and must be accompanying the national on their own trip.

Airport Transit Visas: Airport visas apply to a limited number of foreign nationals, but may be necessary to transit through Dutch airports, either as a departure point or as a connecting location. Nationals from Afghanistan, Bangladesh, Democratic Republic of Congo, Eritrea, Ethiopia, Ghana, Iran, Iraq, Nigeria, Pakistan, Somalia and Sri Lanka are required to possess an airport transit visa while connecting between aircraft in the Netherlands. Nationals from Angola, Colombia, Gambia, Guinea, Guinea Bissau, Nepal, Sierra Leone, Sudan, Syria and South Sudan are required to have a transit visa while in an airport’s international transit area anywhere in the Netherlands.

Some groups are exempted from this requirement, including those possessing other valid visa types; those possessing valid resident permits from Andorra, Canada, Japan, San Marino or the United States; diplomats; and family members of citizens of the European Union.

Authorization for Temporary Stay (MVV): Foreign nationals, excluding those from the EU and some other countries, traveling to the Netherlands for more than 90 days for work, study, or family must apply for an authorization for temporary stay (MVV). Applicants may be required to demonstrate sufficient income levels, the absence of a criminal record and knowledge and understanding of Dutch language and culture. This latter requirement entails a Dutch civic integration examination conducted abroad prior to entrance, which must be passed prior to application. If applying to work in the Netherlands, then employees can have their employers contact the Immigration and Naturalization Service (IND) on their behalf.

A fee also is levied for each application. The IND decides on all applications within six months. Upon approval, applicants may arrive in the Netherlands and must promptly apply for a temporary regular residence permit. This permit is valid for one year, but can be extended. After five years these workers must apply for a permanent residence permit.

In addition, employers generally are required to obtain a work permit on behalf of foreign employees. If the foreign employee will work for fewer than 90 days, the employer must apply for a work permit (TWV) with the UWV. UWV examines among other things if there is no employee with the Dutch, EU/EEA or Swiss nationality that is qualified for the job. If the foreign employee will work for more than 90 days, employers are required to apply for a combined residence and work permit (GVVA) with the IND. Once the fees have been paid and all the required documents have been submitted, the IND requests advice from the UWV about whether the foreign employee is permitted to work. On the basis of UWV’s advice, the IND takes a decision.

Highly skilled immigrants may receive leniency in meeting some requirements, although this is at the discretion of the government. When approved for the MVV, foreign nationals also qualify their spouses, partners and minor children for entrance.

Other: For travelers to the Caribbean parts of the Netherlands, foreign nationals may apply for and use a short-term, six-month visa called a Caribbean visa. This visa does not guarantee the holder the ability to remain in the Netherlands for six consecutive months.

Taxes: Foreign employers conducting business in the Netherlands and/or employing people in the Netherlands are responsible for Dutch payroll taxes, although whether employers withhold wage taxes, social insurance contributions, or both depends on employee statuses.

Nonresident workers employed in the Netherlands generally are liable for both income tax and social insurance contributions, including payments for the health care insurance. Both wage taxes and social contributions must be withheld at source by employers, whether foreign or domestic. If nonresident taxpayers are not eligible for social insurance programs, then they are not liable for either the requisite contributions or applicable tax credits. For instance, if nonresidents have one employer, then they are insured in the country in which they live if they work 25% of their year in that country. If not, then employees should be insured in their employer’s country.

Nonresident taxpayers must file taxes, either electronically or in paper, prior to July 1 of the year following the taxable year. This prompts the government to issue a provisional assessment of tax liability for income taxes and social insurance contributions, if applicable. This assessment also might note whether a taxpayer is immediately liable for taxation during the current year. Nonresidents liable for income tax or social insurance contributions should file with the physical C Form, if the online form is unavailable. If nonresidents are subject to taxes, then those taxes must be paid in a lump sum to the Dutch government via a Dutch or foreign bank account number.

Many employees seconded to the Netherlands may be eligible to receive from their employer an amount equivalent to 30% of their wages as an untaxed reimbursement for extra costs due to living in the Netherlands. Highly skilled immigrants and supervisory board members of companies, in particular, are very likely to receive this special treatment. This tax-free amount is known in the Netherlands as the 30% facility. For employees to be eligible for the 30% facility, they must have in the two years before their start of work in the Netherlands lived at least 150 kilometers from the Netherlands for at least 16 months.

Effective since Jan. 1, 2019, an eligible employee may receive the 30% facility for up to five years. Effective until Dec. 31, 2018, an eligible employee could receive the 30% facility for up to eight years.

Nonresidents are permitted to opt for Dutch residency for tax purposes, if at least a part of their total worldwide income was accrued in the Netherlands. This will subject their total worldwide income to Dutch tax rates. Alternately, nonresidents can opt to be classified as partial nonresident taxpayers (with partial resident tax rates and partial nonresident tax rates) or as nonresidents under the double taxation agreement between the Netherlands and their country of origin.

Recordkeeping: The Dutch Tax Administration suggests retaining copies of original secondment certificates of any foreign workers in the Netherlands. Secondment certificates are issued by the foreign social security body.

Wages/Payments: There are no special wage requirements for foreign workers.

WORKING IN THE UNITED STATES

Foreign workers from the Netherlands must meet general visa requirements and be certified to be employed in the U.S. General visa requirements for the U.S. are included in the separate

The Netherlands is eligible for the visa waiver program for business visitors, which allows Dutch citizens to travel to the U.S. for 90 days or less for business-specific purposes without having to obtain a B-1 business visa. Stays longer than 90 days will require a visa. Individuals may return to the U.S. under the visa waiver program if a “reasonable length of time” has passed. The determination for a reasonable length of time is at the discretion of the Department of Homeland Security.

Dutch workers are eligible to work in the U.S. under H-2B visas, which cover labor or services of a temporary or seasonal nature in occupations other than agriculture or registered nursing. The number of H-2B visas issued each year is limited by U.S. law.

U.S. employers also must check the names of all new-hires and employees against the Specially Designated Nationals and Blocked Persons List, administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). Because OFAC prohibits financial transactions with individuals on the list, employers cannot employ them and may face fines for failing to comply.

For tax purposes, Dutch citizens are subject to U.S. employment-based taxation on income earned in the U.S. unless they can claim an exemption under certain tax treaty provisions or they work under specific visa types that exempt earnings from taxes. The Netherlands has both a tax treaty and a social tax totalization agreement with the U.S.

State and local taxation of Dutch workers also can apply, although some states within the U.S. recognize international tax treaties that can eliminate that income tax liability for foreign workers.

The U.S. labor laws apply to all workers employed and providing services in the country.

Work eligibility as an employee is contingent upon Department of Homeland Security and Labor Department approval and the employee receiving a U.S. Social Security number from the Social Security Administration.

Tax Residency: In general, employees working in the U.S. on a temporary basis are considered nonresidents for tax purposes unless they qualify for resident status. Employees can be granted permanent resident status through the so-called green card test or if they meet the substantial presence test under the U.S. tax code. More information on these requirements is in the

Permanent residents are subject to U.S. tax requirements the same as U.S. citizens and are taxed under the U.S. system on their worldwide earnings.

Income Taxes: Generally, nonresidents in the U.S. who are from the Netherlands and are working in the U.S. are subject to U.S. taxes based on their U.S.-sourced income. Income is taxed differently based on whether it is categorized as wage income or nonwage income, which includes interest and dividends. A Form W-4, Employee’s Withholding Certificate, must be filed by each employee with their employer. All nonresidents in the U.S. who are from the Netherlands and are working in the U.S. must claim “single” in Step 1c, regardless of marital status; write “Nonresident Alien” or “NRA” in the space under Step 4c of the form; and may not claim “exempt” in the space under Step 4c.

Nonresident alien employees may adjust withholding using Step 2b or 2c of the Form W-4; certain employees also may be able to use Steps 3, 4a, or 4b. More information about Form W-4 requirements for nonresident alien employees is available in the

Although the versions of Form W-4 issued in 2020 or later significantly differ from the versions issued in 2019 or earlier, nonresident employees that filed a valid version of Form W-4 from 2019 or earlier with their employer do not need to file another Form W-4 with the employer unless they need to implement a change for their withholding. On Forms W-4 issued in 2019 or earlier, nonresident alien employees were required to check the “single” box on line 3, regardless of marital status; write “Nonresident Alien” or “NRA” above the dotted line on line 6; and were not permitted to claim “exempt” on line 7 of the form.

An additional amount is added to a nonresident alien employee’s wages for calculating federal income tax withholding, with the amount based on pay period frequency and the date of the employee’s most recently filed Form W-4. The table of additional amounts applicable to Forms W-4 from 2020 or later and the table applicable to Forms W-4 issued before 2020 are available in the

Nonwage income and self-employed foreign workers can be subject to income tax withholding at a flat rate of 30%.

Additionally, foreign workers may be taxed differently based on the specific type of visa they hold.

Tax treaties: The Netherlands and the U.S. have a tax treaty with provisions addressing host country taxation of the nonresident workers. A summary of those benefits is listed in the Tax Treaty Exemption Comparison Chart. To claim the treaty benefit, the nonresident must file Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with the employer.

Students, trainees and teachers in particular must include a statement with Form 8233 to claim a tax treaty exemption from withholding of tax on compensation for dependent personal services. This statement affirms that the student, trainee, teacher or researcher is temporarily in the U.S. for purposes of studying or has accepted an invitation by the U.S. government (or by a political subdivision or local authority) for the purpose of teaching or engaging in research for a period of two years for teachers and three years for students by a university or other recognized educational institution in the U.S. It also must affirm that the individual will receive compensation for services performed in the U.S. The student exemption is not to exceed $5,000 a year; no limit is placed on the teacher compensation for Dutch residents.

Examples of the statements necessary to claim a treaty exemption from U.S. taxes are included in Internal Revenue Service Publication 519, U.S. Tax Guide for Aliens.

Social Taxes: Most foreign workers are subject to paying into the U.S. Social Security system. Foreign nationals who are exempt from paying income tax and who do not have the eligibility to receive a social security number may not be required to pay social taxes. Foreign workers contributing to Social Security for a certain time period may be eligible to receive benefits.

Generally, foreign workers in the U.S. that have specific visas as exchange visitors or students or who are temporarily in the U.S. for agricultural work are not subject to social taxes on income that is obtained from the purpose in which they originally entered the U.S.

Totalization Agreements: Social Security totalization agreements can allow foreign workers and U.S. nationals working abroad to avoid paying into two social security systems while being subjected to losing benefits for their home country system. Under totalization agreements, generally, foreign workers will only pay into one of the social security systems- either the home or the foreign system- but not both. Foreign nationals, utilizing a totalization agreement, also can count years of contributions paid to different social security systems to all of the systems they have contributed to in order to be eligible for benefits in one country.

The Netherlands and the U.S. have entered into a totalization agreement and a summary of those provisions is included in

Wage Payment: Under certain visas for certain types of employment, employers are required to pay foreign workers the higher of either the prevailing wage or the actual wage that is paid to U.S. workers that have similar skills and qualifications.

There are no particular requirements that employees be paid in U.S. dollars.

TREATY ARRANGEMENTS

The Netherlands has entered into more than 90 income tax treaties, including an income tax treaty with the United States. The Netherlands also has more than 15 totalization agreements for social tax coverage purposes, including an agreement with the United States.

Additionally, the Netherlands has income tax treaties in effect between its European mainland and its constituent countries and special municipalities in the Caribbean Sea, and these treaties affect taxation of individuals who may have presence in some form in the constituent countries, the special municipalities, or in the European mainland part of the Netherlands.

The Netherlands’s tax treaties are available in

RESOURCES

All resources in English unless otherwise noted.

General

Dutch Government: Doing Business in the Netherlands

CIA World Factbook: Netherlands

U.S. State Department: U.S. Relations With The Netherlands

Currency Details

Unicode Consortium: Currency Symbols

International Organization for Standardization: Currency Codes - ISO 4217

United Nations: United Nations Terminology Database: Netherlands

Taxes

Dutch Government: Taxation and Businesses

Tax and Customs Administration: Tax Guide for Individuals and Businesses

Income Tax Act (Dutch)

BES Income Tax Act (Dutch)

General Old Age Pensions Act (Dutch)

General Survivor Benefits Act (Dutch)

Long-Term Care Act (Dutch)

General Children’s Benefit Act (Dutch)

Health Insurance Regulations (Dutch)

Bijstellingsregeling directe belastingen 2021 [2021 Adjustment Scheme for Direct Taxes] Staatscourant 2020, 64406 (Dutch).

Besluit gedifferentieerde premie Werkhervattingskas 2021 [Decree on 2021 Differentiated Premiums for the Return to Work Fund] Staatscourant 2020, 44785 (Dutch)

Regeling van de Staatssecretaris van Sociale Zaken en Werkgelegenheid van 5 november 2021, nr. 2021-0000165813 [Regulation of the State Secretary of Social Affairs and Employment of Nov. 5, 2021, No. 2021-0000165813] Staatscourant 2021, 46406 (Dutch).

Regeling van de Minister van Sociale Zaken en Werkgelegenheid van 5 november 2020, nr. 2020-0000120656 [Regulation of the Minister of Social Affairs and Employment of Nov. 5, 2020, No. 2020-0000120656] Staatscourant 2020, 58989 (Dutch).

Regeling van de van Sociale Zaken en Werkgelegenheid van 25-6-2021, nr. 2021-0000101252 [Regulation of the Minister of Social Affairs and Employment of June 25, 2021, No. 2021-0000101252 (Dutch)

Besluit van 24 september 2021, nr. 2021-191442 [Decree of Sept. 24, 2021, No. 2021-191442] Staatscourant 2021, 42308 (Dutch)

Besluit van 24 september 2021, nr. 2021-191486 [Decree of Sept. 24, 2021, No. 2021-191486] Staatscourant 2021, 42309 (Dutch)

Compensation and Benefits

Employee Insurance Agency (Dutch)

Dutch Government: Health Insurance

Health Insurance Act (Dutch)

Work and Income According to Labor Capacity Act (Dutch)

Decision Regarding Travel Reimbursements and Covid-19 Extension (Dutch)

Ministry of Social Affairs and Employment (Dutch)

Business.gov.nl, Paid Parental Leave

BES Labor Act (Dutch)

Foreign Workers

Ministry of Justice and Security: Immigration and Naturalization Service

Legal Requirements of Staff in the Netherlands (EU)

Dutch Government: Visa Information for Entering the Netherlands

Working in the United States

U.S. Internal Revenue Service:

• IRS Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens
• IRS Publication 15, Circular E, Employer’s Tax Guide
• IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
• IRS Publication 519, U.S. Tax Guide for Aliens
• IRS Publication 901, U.S. Tax Treaties

U.S. Labor Department, Foreign Labor Certification

Hiring Foreign Workers

U.S. Department of State, Visa Waiver Program

Treaty Arrangements

List of Tax Treaties with the Netherlands

Totalization Agreement between the Netherlands and the United States