Netherlands

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Facts & figures

General Information

Government Type: Representative Democracy

Capital: Amsterdam
Currency: Euro

Languages: Dutch

Economic Indicators

GDP Per Capita: 52,331 (2020)

Main Business sectors: 70.2%

Industry: 17.9%

Agriculture: 1.6%

Workforce indicators

Employment Rate: 79.2%

Employment Manual - Netherlands

Employment Agreements

The employment agreement or contract must comply with Dutch law and EU rules. The agreement must refer to:

The name and place of residence of the employer and the employee
The location(s), at which the work is carried out
The employee’s job or the nature of the work
The usual working hours
The amount of the salary and the payment periods
Date when the employee joined the company
Term of the contract (if for a fixed term)
(If applicable:) length of the trial period
Holiday entitlement
Notice period
(If applicable) pension
(If applicable) non-compete or non-solicitation clause
Whether a Collective Labour Agreement (CAO) applies

Termination

Termination process

In the case of employment termination, the party terminating the employment contract must submit their notice in writing, indicating the reason for termination, the legal provision in which the basis of the termination and date of termination of employment relationship.

Notice Period: With each permanent contract, your employer must adhere to a notice period, which depends on the duration of your employment.

Less than 5 years: 1 month notice period

Between 5-10 years: 2 months notice period

Between 10-15 years: 3 months notice period

15 years or more: 4 months

Your employer can agree to a longer notice period with you and include this in the contract.

Severance Pay: As per 1 January 2020, the dutch employment law has been changed. From the first day of employment, an employee is entitled a transition payment to safeguard his interests in the event of termination requested by the employer.

The amount of the transition allowance for a Dutch employee is 1/3 monthly salary per entire year of employment from the first working day. The transition allowance over the remaining part of the employment contract is calculated according to this formula:

(gross salary received over the remaining part of the employment contract / gross monthly salary) x (1/3 gross monthly salary / 12).

Payroll Taxes

Pension

In the Netherlands, pensions would include at least one if the following elements:

A state Pension (AOW): Generally, anyone who reaches the state pension age (66 Years) will receive a basic state pension.
A supplementary Pension: employees can accrue a supplementary pension through a group pension scheme.
Private Insurance

Employee Payroll Taxes

Employee Income Tax

Income tax in the Netherlands ranges from 9% to 51% where the total social contribution for employees is 27.65%.

Mandatory Employee benefits

Paid leave

Full time employees in the Netherlands are legally entitled to a minimum of 20 days of paid holiday leave per year.
Part time employees are entitled to 4 times the number of hours they work per week.

Sick or Personal leave

The minimum sick leave entitlement in the Netherlands is a payment of 70% of their most recent wage level up to a maximum period of 2 years
Public Holidays: There are 10 Public holidays in the Netherlands

Maternity leave

Pregnant employees are entitled to 6 weeks pregnancy leave before the baby is born and at least 10 weeks of maternity leave after childbirth.

Paternity Leave

Partners of mothers who give birth are entitled 5 days of paid leave from 1 January 2019 which must be taken during the first 4 weeks of the baby’s birth
Partners will be entitled to further 5 weeks of paid paternity leave taken during the first 6 months after the child birth.

Specific Employee Benefits and Industry Benchmarks

Child Support

Child benefit is a payment to help with the cost of caring for a child. Inhabitants can get child benefit for:

Their own child
Their partner’s or your ex-partner’s child
A foster child
A child they care for as if it was their own child

Accident Insurance: pays out benefits in the event of an employee’s death or disability resulting from an accident.

Netherlands

Facts & figures

Employment Manual - Netherlands

Termination

Payroll Taxes

Employee Payroll Taxes

Mandatory Employee benefits

Specific Employee Benefits and Industry Benchmarks

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