Netherlands Labor Law Guide for Hiring Employees and Contractors
This labor law guide for the Netherlands has important information for businesses looking to hire employees or contractors in the country. The Netherlands is a country in Europe.
For 2023, the Netherlands’ economy remains robust as one of the top economies in Europe, with GDP growth continuing at a steady pace. The nation’s economy is diverse, underpinned by strong sectors such as agriculture, manufacturing, energy, logistics, and financial services. Importantly, the technology sector has been expanding rapidly, bolstering the Netherlands’ reputation as an innovation hub.
The official currency of the Netherlands is the Euro (EUR).
Minimum Wage
€2,134.08 per month for employees aged 21 and older
Overtime Wage
Minimum 125% of the regular hourly rate
Meal Breaks
30 minutes for up to 5.5 hours of work
Rest Breaks
30-minutes|
Working hours
8 hours/day; 40 hours/week
Salary Payment Cycle
Monthly
Payroll Taxes
Social security and health insurance contributions
Paid Vacation
4 times the weekly working hours (20 days)
Overtime Hours
More than 40 hours/week
Night Shift Hours
125% of regular rate
Holidays
8 days
No Work Days
Saturday & Sunday
There are no state-specific minimum wage laws differing from the federal rate.
Employers must also pay holiday pay, which is at least 8% of the employee’s annual gross income.
The pay rate for night shifts also starts at 125% of the regular hourly rate.
The minimum legal working age is 16, and strict regulations govern child labor to protect young employees.
- Social Security Contributions: Employers contribute towards health insurance, unemployment insurance, and other social security benefits.
- Income Tax Withholding: Employers withhold income tax from employees’ salaries based on progressive rates.
| Income Level (EUR) | Applicable Tax Rate |
|---|---|
| Up to €20,711 | 9.42% |
| €20,711 – €68,507 | 37.07% |
| Above €68,507 | 49.50% |
- Social Security Contributions: Employers contribute towards health insurance, unemployment insurance, and other social security benefits.
- Income Tax Withholding: Employers withhold income tax from employees’ salaries based on progressive rates.
- Vacation Leave: Minimum of 20 paid vacation days per year.
- Maternity Leave: 16 weeks of paid leave.
- Paternity Leave: One week fully paid, up to five additional weeks at 70% of daily wage.
- Sick Leave: Up to 2 years of paid sick leave, albeit at a reduced rate.
- Adoption Leave: 6 weeks of paid leave.
| Holiday | Date |
|---|---|
| New Year’s Day | January 1 |
| King’s Day | April 27 |
| Liberation Day | May 5 |
| Ascension Day | Variable (40 days after Easter) |
| Good Friday | Variable (Friday before Easter Sunday) |
| Easter Sunday and Monday | Variable (March/April) |
| Whitsun | Variable (7 weeks after Easter) |
| Christmas Day | December 25 |
- Social Security: Contributions to healthcare, unemployment, and pension funds.
- Retirement Benefits: State and occupational pensions.
- Healthcare Benefits: Compulsory health insurance coverage.
- Annual Bonuses: Common practice, although not legally mandated.
- Notice Period: Typically ranges from 1 month to 4 months based on length of service.
- Termination Benefits: Severance pay, known as transition payment, is mandatory.
- Legal Challenges: Employees can contest unfair dismissal through labor unions or courts.
- Valid Termination Grounds: Include economic reasons, misconduct, performance issues, or mutual consent.