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UPDATED JUL 6, 2026💡 Everything you need to know to hire and manage employees in the Netherlands through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.
At a Glance
| Item | Detail |
|---|---|
| Currency | Euro (EUR) |
| Payroll cycle | Monthly. Toku runs one payroll per month in the Netherlands. |
| Estimated employer costs on top of salary | Approximately 18-25% of gross salary in social contributions, plus the mandatory 8% holiday allowance |
| Onboarding lead time | 5-7 business days |
| Standard working week | 36-40 hours, per contract |
| Probation period | 3 months per Toku's employment agreement (article 7:652 Dutch Civil Code) |
| Annual leave | Statutory minimum 20 days (5-day week); 25-30 days is common |
| 13th month salary | Not required (the 8% holiday allowance is mandatory instead) |
| Minimum notice on termination | 1 month with under 5 years of service, rising to 4 months at 15+ years |
Onboarding a New Hire
Plan for 5-7 business days between submitting a new hire and their start date. The employee needs a BSN (citizen service number), which Dutch residents already hold and international hires obtain on registration; Toku completes the tax authority registration before day one and assesses 30% ruling eligibility for qualifying international hires.
Submit your new hire through the Toku platform and we take it from there: local employment agreement, statutory registrations, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.
Employer Costs
On top of gross salary, you pay the following employer contributions in the Netherlands (all levied on wages up to EUR 79,409 per year in 2026):
| Cost | Rate | Notes |
|---|---|---|
| Unemployment fund (AWf) | 2.74% | Rate for permanent contracts; flexible contracts pay 7.74% |
| Disability fund (Aof) | 6.27-7.63% | Lower rate for small employers, higher for large |
| Healthcare contribution (Zvw) | 6.10% | Income-dependent employer contribution |
| Childcare surcharge | 0.50% | |
| Return-to-Work Fund (Whk) | Variable | Employer-specific premium |
| Holiday allowance (vakantietoeslag) | 8% of gross annual salary | Statutory entitlement on top of salary, typically paid as a lump sum in May |
As a rule of thumb, total cost of employment is roughly 126-133% of gross salary once the mandatory 8% holiday allowance is included. Pension contributions add to this where a pension plan applies.
Employees pay national insurance contributions of 27.65% (state pension, survivor benefits, and long-term care), which are integrated into income tax withholding: combined rates run from 35.70% in the first bracket to 49.50% on income above EUR 79,137. These are withheld from gross salary, not charged on top. Toku calculates and remits all of the above.
Compensation & Payroll
Payroll in the Netherlands is monthly. Toku runs one payroll per month, and employees receive a detailed payslip each cycle. Salaries are paid in euros by bank transfer.
The statutory gross minimum wage is EUR 14.99 per hour from 1 July 2026 (about EUR 2,598 per month for a 40-hour week), adjusted every January and July. The 8% holiday allowance is paid as a lump sum in May or June. There is no statutory 13th month salary, though some contracts provide one.
Employment Contracts & Probation
- Toku issues a compliant local employment agreement for every hire, covering salary, hours, notice, pension, and probation terms.
- Indefinite-term contracts are the default. Fixed-term contracts follow the chain rule: a maximum of three consecutive contracts within 36 months, after which the contract automatically becomes indefinite.
- Probation is 3 months per Toku's employment agreement (article 7:652 Dutch Civil Code). During probation, either party may end the contract immediately without notice or cause.
Working Hours
The standard working week is 36-40 hours depending on the contract. Statutory caps are 12 hours per shift, 60 hours in any week, and an average of 48 hours per week over 16 weeks. There is no statutory overtime premium: overtime compensation follows the contract. Employees have a legal right to request changes to their hours, schedule, and place of work, and employers must weigh remote work requests seriously and refuse only with written reasons.
Leave Entitlements
| Leave | Entitlement | Who pays |
|---|---|---|
| Annual leave | Statutory minimum 20 days (5-day week); 25-30 days common | Employer |
| Sick leave | Up to 104 weeks (2 years) | Employer: at least 70% of salary throughout, commonly 100% in year 1 and 70% in year 2 |
| Maternity leave | 16 weeks (6 before and 10 after birth; 20 weeks for multiples) at 100% up to the maximum daily wage | UWV (government) |
| Partner leave | 1 week at 100%, plus 5 additional weeks at 70% within 6 months of birth | Week 1: employer; weeks 2-6: UWV |
| Parental leave | 26 weeks per parent per child, usable until the child turns 8; 9 weeks paid at 70% if taken in the child's first year | UWV for the paid portion; remainder unpaid |
| Adoption or foster leave | 6 weeks per parent at 100% up to the maximum daily wage | UWV |
| Short-term care leave | Twice the weekly working hours per year at 70% | Employer |
Statutory leave days expire six months after the end of the year they were earned in, so encourage your team to use them. The two-year paid sick leave obligation is one of the most protective in Europe and comes with formal reintegration duties, which Toku manages.
Public Holidays (2026)
The Netherlands recognizes 11 national holidays in 2026. Paid time off on public holidays is not a statutory right but is granted by virtually all employers under the contract; Liberation Day (May 5) is a general paid holiday only once every five years (next in 2030). Holidays falling on a weekend are not moved.
| Date | Holiday |
|---|---|
| January 1 | New Year's Day |
| April 3 | Good Friday |
| April 5 | Easter Sunday |
| April 6 | Easter Monday |
| April 27 | King's Day |
| May 5 | Liberation Day |
| May 14 | Ascension Day |
| May 24 | Whit Sunday |
| May 25 | Whit Monday |
| December 25 | Christmas Day |
| December 26 | Second Christmas Day |
Benefits: Required vs. Common Extras
Statutory (included in employer costs above): the state pension (AOW), unemployment insurance (WW), long-term disability cover (WIA), and the employer healthcare contribution. Every Dutch resident also arranges their own basic health insurance directly with an insurer; the premium is paid personally by the employee.
Toku's Netherlands Overview explains the health insurance your employee arranges within 4 months of starting and the Centraal Beheer pension plan they are automatically enrolled in.
Other common extras in the Netherlands include supplementary health insurance, travel allowances (tax-free up to EUR 0.23 per kilometer in 2026), bicycle schemes, training budgets, and flexible benefit budgets. Toku can advise on how each of these affects your total cost.
Ending Employment
Dutch dismissal law is strongly protective: outside mutual consent, terminations require either a UWV permit (economic reasons or long-term illness) or dissolution by the court, and dismissal is prohibited during the first two years of illness. Involve Toku early whenever you are considering a termination. For the process, see How to Terminate an Employee or Contractor.
| Service | Notice |
|---|---|
| During probation | None required |
| Less than 5 years | 1 month |
| 5-10 years | 2 months |
| 10-15 years | 3 months |
| 15 years or more | 4 months |
Notice runs from the first of the month after it is given. On employer-initiated termination, the employee is entitled to a statutory transition payment of one-third of a month's gross salary per year of service, accruing from day one and capped at EUR 102,000 gross in 2026 (or one year's salary if higher). Courts can add uncapped fair compensation where the employer acted seriously culpably.
Hiring Someone from Overseas?
The highly skilled migrant scheme is the main route for non-EU hires, with 2026 salary thresholds of EUR 5,942 per month for candidates aged 30 and over and EUR 4,357 for under-30s (excluding holiday allowance), and processing of typically 2-4 weeks; the EU Blue Card is an alternative for highly qualified roles. EU, EEA, and Swiss nationals can work without a permit and simply register with their municipality. Eligible international hires may also qualify for the 30% ruling, which lets part of their salary be paid tax-free. Talk to Toku before extending an offer to a candidate who needs sponsorship.
Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.