Netherlands at a Glance

An employment contract under Dutch law may be concluded orally or in writing. However, the employer will nonetheless need to inform the employee in writing with respect to certain conditions pertinent to the employment, including:

• the name and residence of the parties;
• the place where the work is to be carried out;
• the position and a job description;
• the hiring date;
• if the employment contract is for a fixed period of time, the time period;
• the annual leave rights or the method of calculating annual leave allowance;
• the duration of the notice periods to be observed by the parties or the method of calculating these periods;
• the salary and the payment intervals;
• the customary number of working hours per day or per week;
• the employee’s pension rights (if applicable);
• the Collective Labour Agreement (if applicable).

There is a variety of employment agreements for employees in the Netherlands, with temporary and permanent contracts being the most common. Since January 1, 2020, a temporary contract automatically changes to a permanent contract if an employee has received more than 3 successive temporary contracts or if an employee has had several temporary contracts with his employer for more than 3 years, unless there are other rules in the collective labor agreement.

Fixed Term Contracts

An employment contract can be agreed upon for a fixed period of time (fixed-term contract) or for an unspecified period of time (open-ended/permanent contract). A fixed-term employment contract will automatically convert into an open-ended employment contract if:

• a chain of temporary employment contracts covers 36 months or more;
• a chain of three fixed-term employment contracts is continued.

A chain is a series of fixed-term employment contracts that succeed each other with no more than six months in between. This rule is also applicable to employment contracts between an employee and various employers that must reasonably be deemed to be each other’s successors regarding the work performed. It is possible to shorten the interval period of six months to three months in a Collective Labour Agreement, if the nature of the activity so requires. This applies, for example, to seasonal labour.

One month before the termination of a fixed-term employment contract of six months or longer, an employer must notify the employee whether the employment contract will be extended or not, and the employer is also obliged to inform an employee who has a fixed-term contract about vacancies with an open-ended employment contract.

The employer is required to use the services of a working-conditions service, an institution that assists the employer with risk assessments, advises the employer on reintegration of sick employees, assists sick employees, and more. Employers are advised to have a proper complaint procedure in place. In addition, employers have the obligation to inform their employees about the right to address health and safety-related matters with the company’s occupational health and safety service agency.

Non-compete clauses

In principle, employing a non-competition clause in a fixed-term employment contract is prohibited, unless the employer has a substantial business interest in including such a clause (which must be substantiated in the employment contract). Non-competition clauses, effective for a certain scope of activities, a certain geographical area and/or for a certain number of years, must be agreed upon in writing. The restriction must be limited to what is reasonably necessary to protect the employer’s business interests. Typically, a duration of one year is considered reasonable. Limitations as to territory and the nature of activities depends on the branch in which the employer operates and the position of the employee.

The employer can enforce the non-competition clause in Court and claim damages from the employee. In practice, a penalty clause is usually agreed upon between the parties on the basis of which the employee has to pay an agreed amount to the employer, if the employee breaches the non-competition clause. If the non-compete clause prevents the employee from being employed elsewhere, the Court may order that the employer has to compensate the employee during the period in which the employer holds the employee to the non-compete clause.

Non-solicitation clauses

Employment contracts can also contain a non-solicitation clause, which stipulates that the employee is not allowed to solicit their employer’s customers or employees during or after their employment. The employer can enforce the non-solicitation clause in Court and claim damages from the employee. In practice, a penalty clause is usually agreed upon between the parties on the basis of which the employee has to pay an agreed amount to the employer, if the employee breaches the non-solicitation clause.

The Social and Economic Council (SER) oversees proposed changes in employment laws and decisions affecting employment. The SER functions as an advisory board and a resource for the Netherlands’ labor agreements, with a council consisting of equal amounts of representatives for employees, employers and independent advisors.

Union membership for workers is not compulsory in the Netherlands, and only 16% of the Dutch are unionized – a low rate compared to other EU countries. In recent years, membership declined slightly, though not significantly. In the Netherlands, labour unions have no official affiliations to political parties but do participate in politics by lobbying and by participating in the SER.

As a result of transparent and institutionalized relations between management and employees, the Dutch experience fewer labour disputes and strikes than EU counterparts.

A probationary period must be laid down in writing. No probationary period can be applied in an employment contract with a term of six months or less.

The maximum probationary period in open-ended contracts is two months. The maximum probationary period in fixed-term contracts is one month if the contract’s duration is between six months and two years, and two months for longer contracts. Probationary periods are not permitted for fixed-term contracts lasting up to six months.

The probationary period for both the employer and the employee should be equal. A probationary period is not valid if the employee involved is already employed at the employer, but at a different position and will be carrying out more or less the same work that they have done elsewhere within the company.

During the probationary period, either party may terminate the employment contract with immediate effect, without notice or stating the reasons.

The average working week in the Netherlands has 5 days with between 36 and 40 working hours.

An employee may work a maximum of 12 hours per shift. The maximum working hours per week is set at 60. Note that an employee may not work the maximum number of hours every week.

Looked at over a longer period, the working hours are as follows:

• Per week during a 4-week period: on average 55 hours per week during a period of 4 weeks; deviating agreements on this can be made in a collective arrangement (CAO for example). But an employee may never work more than 60 hours per week;
• Per week during a 16-week period: on average 48 hours per week during a 16-week period. The employee and employer make agreements on what exact hours the employee works per day and per week.

Rest after working hours:

• After a working day, an employee must have 11 consecutive hours of non-work time. This rest period may be shortened to 8 hours once in a 7-day period if the nature of the work or the business circumstances require this;
• In the event of a 5-day work week, an employee must have 36 consecutive hours of non-work time after the end of the work week;
• A longer work week is also possible, provided the employee has at least 72 consecutive hours of non-work time in a period of 14 days. This period may be split into two periods of at least 32 hours each.

Breaks:

• If an employee works for more than 5.5 hours, he is entitled to at least 30 minutes of break time. This may be split into two 15-minute breaks;
• If an employee works for more than 10 hours, he must have at least 45 minutes of break time. This may be split into several breaks, each of which must be at least 15 minutes;
• A collective arrangement (CAO for example) may include agreements on fewer breaks. But if the employee works for more than 5.5 hours, he must at least have 15 minutes of break time.

There is no specific Dutch legislation on compensation for working overtime. Whether overtime will have to be compensated should follow from what was agreed to in the employment contract or established in a Collective Labour Agreement (if applicable). If no stipulations are made, the Courts in a labour dispute, are likely to decide that the employer should compensate an employee for working overtime, because this is what may be expected from a “good employer” in such circumstances.

An open-ended employment contract can be terminated in the following ways:

• the employer submits termination request to the Dutch Labour Authorities (UWV) and gives notice of termination after receiving permission from the UWV;
• the employee consents after the employer has given notice, without the abovementioned permission;
• court proceedings;
• mutual consent (no notice period needs to be observed – although it is usual to do so – and both parties can agree on a reasonable severance package);
• dismissal because of an urgent reason (if the employee has engaged in such misconduct that the employer cannot reasonably be expected to continue the employment relationship any longer. The urgent reason must be communicated to the other party immediately and the employment contract must be terminated without notice);
• notice given by the employee (an employee is always permitted to terminate the employment contract with due observance of the applicable notice period).

Employers cannot decide themselves which route to use to make staff redundant. Applications for redundancies on economic grounds, or dismissal on account of long-term incapacity for work, must be made to the Employee Insurance Agency (UWV). The UWV will grant permission only if there is a reasonable ground for dismissal and redeployment within a reasonable period of time is (even after training) not reasonably possible. Permission will not be granted in cases where termination is impossible because of a statutory prohibition against terminating an employment contract by giving notice, for instance, during illness shorter than 104 weeks, pregnancy, or if the employee is a member of the works council.

All other dismissals must be referred to the district court. An employment contract can be terminated by decision of the Court, by filing a petition for dissolution in cases including:

• frequent and disruptive absence due to illness;
• unsuitability for the position/underperformance (other than because of illness);
• culpable acts or omissions of the employee;
• dismissal based on cumulation ground. The cumulation ground allows an employer to combine different grounds for dismissal, which individually may be insufficient to justify a dismissal. The cumulation ground cannot be applied to dismissals on the grounds of (i) business economics or (ii) due to long-term incapacity for work.

After filing the petition with the competent Court, the employee is offered the possibility to file a statement of defense and the Court will set a date for a hearing, during which the parties can explain their opinions. The Court could grant the request for termination and dissolve the employment contract, or it could deny the request.

Only in case of a collective dismissal, or if provided by a Collective Labour Agreement, the employer is obliged to notify and consult the relevant trade unions when it reports its intention to implement the dismissal to the Employee Insurance Agency. A Collective Dismissal applies if an employer wants to dismiss 20 employees or more within a term of three months within one of the working areas of the UWV.

According to the Dutch Collective Redundancy (Notification) Act (Wet Melding Collectief Ontslag), the employer must notify the UWV (the Employee Insurance Agency) of its intention to do so. It is also necessary to take into account all employment contracts that will be terminated by mutual consent. After the report has been made, there is a one-month waiting period. No waiting period applies if the report is accompanied by a statement of the trade unions confirming that they were consulted and that they agree with the termination of the contracts.

Frequently, a social plan (e.g. termination packages) is negotiated. There is no legal obligation for the employer to negotiate the content of a social plan with the trade unions. Nevertheless, a social plan often forms an important part of the negotiations with the trade unions, as they will base their support on the content of that plan.

Dutch law provides for the following statutory notice periods for an employer:

• fewer than 5 years of service: 1 month
• more than 5 years, but fewer than 10 years of service: 2 months
• 10 or more years of service, but fewer than 15 years of service: 3 months
• 15 or more years of service: 4 months

The period of notice to be observed by the employee is normally one month. The employer and the employee may agree a shorter or longer period in writing, up to a maximum of 6 months. In that case, the notice period the employer has to observe must be twice the notice period the employee has to observe.

Employees (and employers) are protected by the law on dismissal. This stipulates among other things that notice may only be given with effect from the end of a month. A different date may be agreed by collective labour agreement or employment contract. Exceptions are possible during the trial period or if there is a substantial reason for doing so (e.g. theft); in that case, contracts may be terminated with immediate effect and without notice.

While there is no legal requirement for administrators or directors to be residents of the Netherlands, having a local director can simplify processes such as banking and tax filings.

Upon incorporation, businesses may need professional indemnity insurance (Beroepsaansprakelijksheidsverzekering, BAV) or business liability insurance (Bedrijfsaansprakelijkheidsverzekering, AVB). The specific insurance requirements can vary depending on the industry and type of business, and it is advisable to consult with local brokers for tailored advice.

While having a physical office is not mandatory, a registered business address is required to make the entity operational. This address can be a virtual office or a shared office space if necessary.

Requirements of setting up a Subsidiary:

• at least one individual or legal person is required as a shareholder
• At least one director is required, but there is no requirement for the director to be a resident of the Netherlands.

Requirements of setting up a Branch:

• there are no shareholder requirements as the branch operates under the parent company.
• There are no specific director requirements for a branch as it operates under the parent company’s management.

Opening a business bank account in the Netherlands typically takes between one to two weeks. The process can proceed quickly once the required identification, proof of residency, and a BSN (citizen service number) are provided.

Filing: Corporate tax returns must be filed annually. The filing deadline is generally by the end of the fifth month following the end of the fiscal year.

Corporate Tax Rate: The standard corporate tax rate in the Netherlands is 25.80%. However, a reduced rate of 19% applies to the first 200,000 euros of taxable profit.

Tax deadlines: For corporate tax, businesses are required to file their annual returns by the end of the fifth month after the end of their fiscal year.

The Netherlands has a Value Added Tax (VAT) system, known locally as BTW. The standard VAT rate is 21%, with reduced rates of 9% and 0% applicable in specific circumstances.

In the case of a subsidiary, repatriating profits back to the parent company is possible, but it must comply with several legal and procedural requirements. Seeking professional advice is recommended to ensure compliance with local laws.

While there is no set hierarchy for transfer pricing methodology in Dutch legislation, it is important to ensure that intercompany transactions are priced in a manner that is compliant with local tax laws. Businesses may receive help in reviewing or drafting intercompany agreements that adhere to Dutch transfer pricing guidelines.

Electronic invoicing is mandatory in the Netherlands only for business-to-government (B2G) transactions. This applies to transactions carried out with public authorities or governmental entities. For other transactions, e-invoicing is optional.

Companies have the flexibility to set their fiscal year, which can be any 12-month period, as long as it is consistent for reporting purposes.

In the Netherlands, worldwide income is applicable if you live abroad but have income from Netherlands, but not applicable when employee lives in the Netherlands.

The income is taxed according to payroll tax tables. Payroll tax tables in the Netherlands tell how much tax to take from an employee’s salary. The pay is searched in the table and it shows the amount to withhold. The employer then pays this tax to the Dutch tax authorities.

Social security in the Netherlands can be subdivided into social insurance benefits and social welfare benefits, depending on the source of the funding. Social insurance is funded from the contributions paid by employees. This system is compulsory. All employees are automatically insured and pay a contribution. Social welfare benefits are financed from central governmental funds.

Dutch law requires employers to make certain withholdings from the employee’s salary for income tax purposes and the employee’s national insurance contributions. An employer is furthermore required to pay certain social security premiums for its employees.

Social security consists of 3 components:

• Social Security
• Dutch Social Health Contribution (ZVW)
• Pension

Employers have to pay a higher Unemployment Act (WW) premium of 7.74% for all employees without a written employment contract for an indefinite period.

* STiPP is the mandatory pension scheme for employees working via temporary or intermediary structures in the Netherlands. It is designed to offer employees a basic retirement provision in addition to the Dutch state pension (AOW). As of 2026, STiPP operates a single unified pension plan. Employees will be enrolled into the Pension Plan from the first day of employment. Under this plan, both Employee and Employer contribute to the pension plan with Employee contributions being 7.5% and Employer contributions being 15.9%.

The levy of national insurance contributions in the Netherlands is capped at a maximum amount of premiums per year and per taxpayer. The rates and maximum amounts are as follows:

*The above rates serve as a broad guideline. Actual rates charged will differ.

There are no mandatory requirements relating to bonus/commission payments and an employer is not obliged to pay bonuses. This differs if the employer and the employee have agreed a certain bonus scheme/plan. Whether bonuses are usual depends on the industry, level and kind of position of the employee.

If an employer chooses to grant bonus payments, all employees must be treated equally for the employer to avoid any discrimination claims. The conditions and criteria under which the employee is entitled to a bonus payment must be objective. A bonus entitlement based on the performance of the employee and/or the company is permissible.

In the Netherlands, the variable part of remuneration in the financial sector is not allowed to exceed 20% of the fixed remuneration. This is stricter than the 100% cap used elsewhere in the EU.

There is a mandatory holiday allowance that is paid annually in May.

Employees who are dismissed are entitled to a transition payment (statutory severance, transitievergoeding) from the first day of their employment contract. An employee will receive a third of the monthly salary per calendar year. The transition payment is capped at EUR 102,000 gross, or if the employee is entitled to a higher annual salary, then one annual salary.

The transition payment is not due if the employee terminates the employment contract, unless this termination is a result of seriously culpable actions on behalf of the employer. Employers can apply for compensation for the transition payment, if they dismiss an employee on the grounds of long-term occupational disability (after two years of sickness).

In case an employment is terminated on the basis of a cumulative dismissal, the Court can grant an extra severance, equal to a maximum of half of the transition payment, in addition to the statutory transition payment that the employee is ordinarily entitled to receive.

The gross salary is the total amount paid to an employee before any deductions. It depends on various factors such as the employee’s job role, skills, experience, and the industry they work in. Companies typically offer competitive salaries that align with market standards in the Netherlands.

In principle, employer and employee are free to agree to the wages to which an employee shall be entitled, taking into consideration minimum wages and minimum holiday allowances, which are normally adjusted each year. A collective labour agreement, if applicable, may also contain salary scales that are binding on individual employees. Salary is generally calculated monthly in arrears and paid on or around the last working day of the month. The employees’ net pay is almost always transferred to their bank account.

Extra payments

In addition to regular salary payments, employers must make an extra annual payment of 8% of the employee’s gross salary. This is usually paid in May but can also be distributed across the 12 monthly salaries, depending on the company’s policy.

The employee will receive a payslip from the employer. This should at least contain the following information:

• the gross pay;
• the composition of this amount (basic wage, performance bonus, etc.);
• deductions by the employer for taxes and contributions;
• the minimum holiday allowance that applies to the employee;
• the name of the employer and the employee;
• the period to which the payment relates (e.g. month/year);
• the number of hours the employee has to work by agreement.

In 2019, the European Court of Justice stated that companies must set up a system to record the working time of their employees. Thus, employers are obliged to implement an objective, reliable and accessible system that allows recording of the daily workday performed by each employee.

In the Netherlands, additional national obligations will apply under the WTTA law. This legislation requires employment agencies to maintain transparent records of working hours.

Employers are required to provide paid vacation days and observe public holidays. These benefits are mandatory and contribute to the overall cost of employment. Employees are also entitled to additional compensation for working on public holidays, which is typically at a higher pay rate.

Employees are entitled to a statutory minimum number of annual leave days equivalent to four times the weekly working hours. For example, an employee with a full-time workweek of 40 hours is statutorily entitled to a minimum of 20 days leave per year. Most collective labour agreements provide for an amount of holiday that is higher than the statutory minimum. The number generally varies from 20 to 30 days for full-time employees.

Annual leave days will lapse if they are not taken within six months after the year in which they were accrued, unless the employee was not reasonably able to take them, but the scheme applies only in respect to the statutory minimum of annual leave days. In addition, ill employees will be entitled to accrue the same full number of leave days as employees who are not ill.

In addition to annual leave days, employees are entitled to a holiday allowance, which, in general, equals 8.33% of the annual salary, insofar as the annual salary does not exceed three times the annual equivalent of the minimum wage.

Employers are obliged to continue to pay the salaries of sick employees for the first two years of illness. The employer is obliged to pay 70% of the employee’s salary, but during the first year of sickness payment cannot be less than the minimum wage. For the second year, the minimum wage limit does not apply. Most employees in the Netherlands are bound to a diverging clause laid down in either an individual employment contract or a Collective Labour Agreement with clauses that are often more favourable to the employee.

Per the Collective Labour Agreement applicable to GoGlobal employees in the Netherlands, in the event of inability to work, the employee will be entitled to (for as long as the TEAC continues):

• 90% of the salary based on the time period during the first 52 weeks of the inability to work and at least the statutory minimum wage applicable to him/her;
• 80% of the salary based on the time period from the 53rd up to and including the 104th week.

Maternal Leave

Work for pregnant women and women who have recently given birth must be organized such that it takes account of their specific circumstances. A pregnant woman is entitled to extra breaks and in principle is not obliged to work nights or overtime. A pregnant woman is also entitled to work in a steady and regular pattern of working hours and breaks. The employee may not undertake any work from 4 weeks prior to the probable date of the birth until 6 weeks after the birth.

Pregnant employees are entitled to 4-6 weeks pregnancy leave (before the due date) and at least 10 weeks maternity leave (after childbirth). If the employee takes less than 6 weeks pregnancy leave before the birth, she is entitled to add the remaining amount (up to 2 weeks) to her maternity leave after the birth.

If the baby is born later than the due date, the employee’s maternity leave begins after the actual birth and the total may therefore be longer than 16 weeks. If the employee is expecting multiple births, she is entitled to at least 20 weeks leave. If the baby goes into hospital directly after birth or during the maternity leave, the employee’s entitlement to 10 weeks maternity leave begins after the baby has left the hospital. If the mother dies in childbirth, her partner is entitled to the maternity leave.

During this maternity leave, the Employee Insurance Agency will pay 100% of the daily wage, up to the maximum daily wage. The maximum daily wage in the Netherlands is currently EUR 297,82.

For the first 9 months after the birth, the woman may interrupt her work to breast-feed or express milk as often and as long as is necessary, up to a maximum of one quarter of her working hours. The employer is obliged to pay her for this time. The employer must provide a suitable room for this.

Partner/paternity leave

If the partner of an employee gives birth, the employee is entitled to 1 week of partner/paternity leave after the birth of their child. During this period of leave the employer must continue to pay 100% of the employee’s salary (based on full-time employment). Partners can choose to take this leave immediately after the birth of their child, or to spread the leave over the first 4 weeks after the birth.

Extended partner leave

Partners are entitled to 5 weeks of extended partner leave in the first 6 months after the birth of the child. Extended partner leave is paid at 70% of the (capped) daily wage by the Employment Insurance Agency (UWV). The additional birth leave must be taken within 6 months of the child’s birth.

Parental leave

Employees are entitled to parental leave until their child turns 8 years old. The total entitlement is 26 times their contracted weekly working hours.

The first 9 weeks of parental leave (if taken within 12 months after birth) are paid at 70% of the daily wage, funded by the UWV. The remaining parental leave is unpaid.

Employees are eligible to take parental leave from the start of their employment.

Employees accrue statutory holiday rights during the paid portion of parental leave (9 weeks). During unpaid parental leave, holiday accrual does not continue.

Adoption leave

Employees who have adopted a child or have taken in a foster child, are entitled to 6 weeks adoption or foster leave. The leave applies to both parents. They are entitled to an adoption or foster care allowance. The employee must apply for the adoption or foster leave at least 3 weeks in advance with their employer. They may take this leave spread out over a period of time. The employer may not refuse this, unless their business will face serious problems as a result.

Emergency leave is intended for unforeseen personal circumstances for which an employee has to take time off immediately, for instance, when making arrangements for the care of a sick family member or in the event of a death in the family. The employer must always grant a reasonable request for emergency leave. During this period of leave, the employer is required to continue paying the employee’s salary. Emergency leave and short absence leave are legal leave schemes. If different arrangements have been included in the collective labour agreement or regulations of the works council or employee representation, these arrangements apply.

Short-term care leave can be taken to provide essential care to parents, ill children who still live at home or partners. However, this leave is only granted on the condition that the employee in question is the only person who can look after the ill person at that moment in time. During the period of leave, the employer continues to pay 70% of the employee’s salary. If this is less than the minimum wage, the employer pays the minimum wage.

If a child, partner or parent of an employee is seriously (i.e. life-threateningly) ill and requires care, the employee can request long-term care leave. During this period of leave, the employer does not have to continue paying the employee’s salary.

Special leave and extraordinary leave are not based on any law but are rather provided for in the collective labour agreement (CAO), company scheme or employee contract. There are some differences between the different collective labour agreements, but often special leave is granted as follows (as per GoGlobal applicable CLA):

• Giving official notice of an intended marriage – 1 day
• Marriage or registered partnerships – 2 days
• Marriage of a family member – 1 day
• Funeral of a spouse/partner, parent or child – 4 days
• Funeral of a grandparent, brother (in-law) or sister (in-law) – 2 days
• 12.5-year, 25-year and 40-year wedding anniversary – 1 day
• 25-year and 40-year employment anniversary – 1 day
• 25-year, 40-year, 50-year, 60-year and 70-year wedding anniversary of the parents and grandparents – 1 day
• To take a (professional) exam for an accredited diploma – 1 day

Holiday entitlement during leave

Holiday entitlement in the Netherlands continues to accumulate while an employee takes leave. The employer may not deduct days taken off for leave from an employee’s holiday entitlement, unless the employee has extra holiday entitlement (more than 4x the number of days worked in a week) and this has been agreed in their collective labour agreement.

In the Netherlands, employees are entitled to a number of paid public holidays. There are a total of 10 (11 every 5 years) public holidays in the Netherlands. Whether employees are free from work on public holidays depends on the agreements made between employers and employees in the CAO (Collaborative Labour Agreement) or those in the individual employment contract. There is no substitution if a holiday falls on a weekend.

The 2 types of insurance schemes in the Netherlands are social insurances against loss of income due, for instance, to unemployment, old age, illness or incapacity for work. The contribution percentages are set twice every year. The schemes are:

• National insurance
• Employee insurance

National Insurance Schemes

National insurance is compulsory for everyone who works or lives permanently in the Netherlands. The schemes are the following:

• 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)

With the exception of the General Child Benefit Act, the Dutch Tax and Customs Administration collects the contributions for these national insurances. Employers withhold these contributions from their employees’ wages (payroll tax), which they subsequently pay to the Dutch Tax and Customs Administration. The Dutch Social Insurance Bank (Sociale Verzekeringsbank, SVB) pays the actual benefits.

Employee Insurance Schemes

In the Netherlands, these employee insurance schemes are compulsory for every employee:

• Unemployment Insurance Act (Werkloosheidswet, WW)
• Work and Income (Capacity for Work) Act (Wet werk en inkomen naar arbeidsvermogen, WIA)
• Sickness Benefits Act (Ziektewet, ZW)
• Invalidity Insurance Act (Wet op de arbeidsongeschiktheidsverzekering, WAO): only for employees that already received WAO before 1 January 2006

Employers pay the contributions on behalf of their employees to the Dutch Tax and Customs Administration (Belastingdienst). These contributions are part of the payroll tax. Employers pay a low unemployment benefit (WW) contribution for employees with a fixed-term contract and a high unemployment benefit (WW) contribution for employees with a flexible contract. The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) arranges payment of employee benefits.

Employers in the Netherlands often offer a range of additional benefits to attract and retain top talent, including bonuses, meal allowances, transportation allowances, training support, and private insurance. These benefits can vary widely depending on company policies, industry norms, and sector-specific or collective bargaining agreements. Such benefits are a common practice and may also include other perks, with additional costs incurred by employers to meet the requirements of these agreements.

Employers may offer their employees benefits in addition to the system of social security insurances and benefits provided by the state, since state benefits have restrictions such as maximum amounts or linked to specific criteria. These supplemental benefits come under the general term of employee benefits.

In addition to the mandatory benefits, employers will often provide a range of benefits to help recruit and retain employees. The most common fringe benefits include:

• Private Pension Plans
• Income Protection
• Transport allowances
• Group Healthcare Insurance
• Education reimbursement
• Flexible working hours / Flexible leave models