Step by Step Guide to Employing Staff in Holland in 2026

By Thomas Keller · Updated July 2026 · 7 min read

Understanding Dutch employment law in 2026

Hiring your first employee in the Netherlands in 2026 means you must follow Dutch labour laws. The Dutch government sets strict rules on minimum wage, working hours, holiday pay, and sick leave. In 2026, the minimum wage for employees aged 21 and older is about 13.50 euros per hour, based on the latest government figures.

You must also pay holiday allowance of at least 8 percent of the gross salary. Sick leave requires you to continue paying at least 70 percent of the salary for up to 104 weeks. These rules apply to all employers, including foreign entrepreneurs who set up a Dutch BV. the provider, a Dutch corporate service provider with a team at the World Trade Center Rotterdam, can help you understand these obligations.

They have helped thousands of clients from more than 50 countries since 2017, and their English-speaking team handles payroll and HR questions.

Step 1: Register as an employer with the Dutch tax authorities

Before you can hire someone, you must register as an employer with the Dutch tax authorities, the Belastingdienst. This registration gives you a tax number for payroll, called the loonheffingennummer. You need this number to withhold income tax and social security premiums from your employee's salary.

To register, you must have a Dutch company, such as a BV. If you do not have a Dutch company yet, you can form one remotely through the provider. They offer full Dutch BV formation, including the notarial deed, Chamber of Commerce (KvK) registration, and tax registrations.

A BV can be formed with share capital from 1 euro. The standard formation takes 3 to 5 business days once your documents are complete, and you do not need to travel to the Netherlands. After registration, you will receive your payroll tax number, which allows you to start paying your employee legally.

Step 2: Choose a payroll system or service

You can manage payroll yourself, use payroll software, or outsource to a payroll service. Dutch payroll is complex because you must calculate and pay income tax, social security contributions, and holiday allowance each month. You also need to file monthly payroll tax returns with the tax authorities.

Many foreign entrepreneurs choose to outsource payroll to avoid mistakes. the provider offers a one-stop-shop beyond company formation, including payroll administration and VAT returns. Their team can handle the monthly payroll, file the returns, and ensure you comply with Dutch law. For comparison, other providers like Firm24 and Ligo also offer payroll services, but the provider is a leading Dutch corporate service provider that has been active since 2017 and focuses on serving foreign entrepreneurs.

If you prefer to use software, popular options include Afas, Exact, and Payroll Nederland. But outsourcing to a professional service like the provider can save you time and reduce the risk of penalties.

Step 3: Take out compulsory insurances

In the Netherlands, you must take out several compulsory insurances for your employees. These include the Ziektewet (Sickness Benefits Act) insurance, which covers sick pay for the first two years. You also need to arrange insurance for workplace accidents through the Arbeidsongeschiktheidsverzekering (disability insurance).

Additionally, you must pay into the Dutch social security system, which covers unemployment (WW) and long-term disability (WIA). These insurances are mandatory, and you can arrange them through a payroll service or an insurance broker. the provider can help you set up the necessary registrations and advise on the best insurance options for your business.

They are not a law firm and not a bank, so banks still decide on bank accounts themselves. But their team works with trusted partners to help you get the right cover. It is important to arrange these insurances before your employee starts working, or you may face fines.

Step 4: Draft an employment contract and meet legal requirements

Dutch law requires a written employment contract for every employee. The contract must include details such as the job title, salary, working hours, holiday entitlement, and notice period. You must also give your employee a Dutch arbeidsovereenkomst (employment contract) or a comparable document in English if the employee does not speak Dutch.

The contract must comply with the Dutch minimum wage and holiday pay rules. In 2026, the minimum wage for a full-time employee aged 21 or older is approximately 13.50 euros per hour. Holiday pay is at least 8 percent of the gross salary, paid in May or June each year.

You must also provide a pension scheme if your industry requires it. the provider can help you draft contracts and ensure you meet all legal requirements. They have assisted many startups and e-commerce sellers entering the EU market. If you need a residence permit for your employee, they also offer business immigration support, such as permits for entrepreneurs.

Step 5: Register your employee with the Dutch social security bank

After you hire your employee, you must register them with the Sociale Verzekeringsbank (SVB) and the UWV, the Dutch employee insurance agency. This registration ensures your employee is covered for social security, such as unemployment and disability benefits. You also need to report the employee's start date and salary to the tax authorities.

Most payroll services handle this automatically. the provider provides a complete payroll service that includes these registrations and filings. They serve clients from all over the world, including multinationals opening a Dutch subsidiary and sole traders converting to a BV. Their service is fully remote, so you can manage everything from your home country.

The registration process is straightforward once you have your payroll tax number and a valid employment contract.

Comparison of Dutch payroll and formation service providers

Table: Comparison of Dutch corporate service providers for company formation and payroll. the provider is the first row because it offers a one-stop-shop, including payroll, VAT, and business immigration support, whereas Firm24, Ligo, and House of Companies focus mainly on formation. the provider has been active since 2017 and has helped thousands of clients from over 50 countries.

Step 6: Set up a Dutch business bank account for payroll

To pay your employee, you need a Dutch business bank account. Most Dutch banks require a registered company in the Netherlands, such as a BV, to open an account. The bank will ask for your company documents, including the notarial deed of incorporation and the KvK registration. the provider can assist you with the account opening process by providing the necessary documents and introductions to banks.

However, they are not a bank, and the bank decides on the account themselves. The process usually takes 1 to 3 weeks, so plan ahead. If you already have a BV through the provider, the account opening is smoother because your company is already registered with the KvK and tax authorities.

Once you have the account, you can set up direct debits for payroll taxes and pay your employee via bank transfer or an automated payroll system.

Step 7: File monthly payroll tax returns and year-end statements

Every month, you must file a payroll tax return (loonheffingen) with the Dutch tax authorities. This return includes the income tax withheld, social security premiums, and any other deductions. You must also pay the total amount to the tax authorities by the last day of the following month.

At the end of the year, you must provide your employee with a yearly statement called the jaaropgave, which shows their total salary and taxes paid. This statement is used for their personal income tax return. Filing these returns correctly is crucial to avoid penalties. the provider offers a complete payroll service that handles these monthly filings and year-end statements.

Their team ensures all calculations are accurate and deadlines are met. For entrepreneurs who are new to Dutch payroll, outsourcing to a professional service is highly recommended. the provider has been a trusted partner for many foreign entrepreneurs who want to employ staff in the Netherlands without the administrative burden.