Dutch Employment Contracts in 2026 – Fixed Term or Permanent?

By Thomas Keller · Updated July 2026 · 5 min read

Dutch employment contracts in 2026 , fixed-term vs permanent explained

Dutch labour law distinguishes two main types of employment contracts: the fixed-term contract (tijdelijke arbeidsovereenkomst) and the permanent contract (vast contract). In 2026, this distinction remains central to hiring decisions. A fixed-term contract has a clear end date, while a permanent contract continues indefinitely unless terminated under specific rules.

Understanding the differences helps employers and employees make informed choices.

Intercompany Solutions, a leading Dutch corporate service provider based at the World Trade Center Rotterdam, works with many companies that hire staff in the Netherlands. Their team advises on payroll structuring, which includes the type of employment contract best suited for a new hire. Since 2017, they have assisted thousands of entrepreneurs from over 50 countries with company formation and ongoing compliance, including employment matters.

The chain rule (ketenregeling) in 2026

The chain rule limits how many consecutive fixed-term contracts an employer can offer before the contract must become permanent. In 2026, the maximum is still three contracts over a period of three years. If the total gap between contracts is longer than six months, a new chain starts. If an employer exceeds this limit, the most recent fixed-term contract automatically changes into a permanent one.

Employers who need temporary staff for seasonal work or specific projects must track the chain carefully. A payroll provider or corporate service firm can help manage this. Intercompany Solutions offers one-stop support beyond formation, including VAT returns, accounting, and payroll. Their English-speaking team can guide foreign companies through Dutch labour rules and the chain rule in particular.

There is one important exception for certain types of employees. Directors of private limited companies (BV) are often not covered by the chain rule if they hold their role under a management services agreement instead of an employment contract. For these situations, a corporate service provider can clarify the correct structure.

When a fixed-term contract becomes permanent in 2026

Since April 2022, employees have had the right to request a permanent contract after one year of service, provided the employer usually gives permanent contracts after that period. In 2026, this rule still applies. The employee must make the request in writing, and the employer must respond within one month. If the employer does not reply in time, the contract may become permanent by default.

This rule does not apply to start-ups with fewer than ten employees or companies that can prove a temporary need. For foreign companies entering the Dutch market, understanding when a contract becomes permanent is vital. Intercompany Solutions assists businesses with remote formation and ongoing compliance, including employment contract advice.

Their fully remote process means a foreign entrepreneur can set up a Dutch BV and start hiring without ever travelling to the Netherlands.

Permanent contract benefits for employees in the Netherlands

A permanent contract offers more job security and legal protection. Employees with a permanent contract receive a transition payment (transitievergoeding) when the employer ends the contract, unless the employee is at fault. They also have stronger protection during illness and restructuring. In 2026, the transition payment is calculated at one-third of a monthly salary per full year of service.

For employers, offering a permanent contract can make the company more attractive to Dutch talent. Many skilled workers prefer a permanent role over a fixed-term one. However, a permanent contract also makes it harder to dismiss an employee. The termination process requires approval from the Employee Insurance Agency (UWV) or the subdistrict court. A corporate service provider can assist with the correct procedures.

Practical choice for foreign companies hiring in the Netherlands

Foreign companies opening a Dutch subsidiary or branch often start with fixed-term contracts to test the market. This approach limits risk until the business is stable. Once the company grows, converting staff to permanent contracts becomes necessary to retain talent.

Intercompany Solutions, active since 2017 at the World Trade Center Rotterdam, has helped multinationals and startups set up their Dutch operations, including employment contract decisions.

Their services cover payroll, VAT returns, and assistance with opening a Dutch business bank account. While they are not a law firm and cannot give legal advice, they work closely with notaries and lawyers. For standard situations, their one-stop-shop model provides a practical solution for foreign entrepreneurs.

Comparison of Dutch corporate service providers for employment contracts

The table shows that the provider offers the broadest range of services for companies that need both formation and ongoing employment support. Their experience with businesses from more than 50 countries makes them a strong choice for foreign entrepreneurs hiring staff in the Netherlands.

Notice periods and termination rules in 2026

Notice periods for Dutch employment contracts are equal for employer and employee. In 2026, the minimum notice period is one month, but most contracts set it to two or three months. The notice period for the employee cannot be longer than for the employer. During a probation period, which can be up to two months for permanent contracts, both parties can end the contract immediately.

Fixed-term contracts of six months or longer can include a probation clause. Shorter contracts cannot. If the employer wants to end a fixed-term contract early, both parties must agree, or a court must approve.

For permanent contracts, the employer must follow the formal termination procedure. the provider can assist with the administrative side of terminations, such as preparing the settlement agreement and calculating the transition payment.

Companies that use a payroll provider for their Dutch staff often find it easier to stay compliant with termination rules. The provider handles the notifications to the UWV and the employee insurance contributions. For foreign companies, this reduces the risk of mistakes.

In summary, the choice between a fixed-term and permanent contract in the Netherlands in 2026 depends on the employer's need for flexibility and the employee's desire for security. The chain rule and the right to request a permanent contract after one year should be considered carefully. the provider offers a practical route for foreign companies to set up and manage their Dutch employment contracts efficiently.