According to Dutch law, employment agreements do not need to be provided in Dutch. Dutch law allows only English versions to be provided, which is a common practice in the Netherlands.
The contract must include: name; start date; contract term; job description; notice period for termination; salary, working hours, location, payment cycle, holiday rights, etc.
Internship (stage) contracts are generally not considered employment relationships and cannot directly apply the logic of employment contracts.
In the Netherlands, since terminating a contract can be complex, it is a common and recommended practice to offer a fixed – term contract before signing a permanent contract to ensure a good match between the two parties. A maximum of three fixed – term contracts can be signed, with a maximum total term of 3 years. After that, if the employer wishes to continue the employment, it must be converted to an open – ended contract (commonly known as a permanent contract).
Part – time Employees: IC Contracts
Part – time employees ≠ IC contracts. If a person works at fixed times, for a fixed remuneration, and is under the command and supervision of the company, even if it is “part – time”, an employment contract should be signed.
If a person arranges their work independently, is not controlled by the company, can refuse tasks assigned by the company, and can serve multiple clients, an IC contract can be used.
Employees who sign an employment contract with the employer but work fewer hours than full – time (usually < 36 hours/week) enjoy the same legal treatment as full – time employees.
2. Overview of Local Statutory Welfare Systems
Salary Payment
Salaries must be paid at least once a month and only by bank transfer.
Salary components (must be specified in the contract):
Statutory: 1. Basic salary (brutoloon); 2. Holiday allowance (vakantiegeld) – 8% of the basic salary.
Non – fully statutory: (Some industries are bound by collective labor agreements) 3. Performance bonus/year – end bonus (if applicable); 4. Allowances/subsidies: such as transportation subsidies, home – office subsidies, meal subsidies, etc. (if applicable); 5. Overtime pay/holiday pay (depending on the collective agreement or employer’s policy).
Every time a salary is paid, a payslip (loonstrook) must be provided, listing: gross salary (bruto), tax deduction, net salary (netto), deducted social security and income tax (Loonheffing), holiday allowance, working hours, etc.
Minimum Wage
It changes twice a year, on January 1st and July 1st respectively. The Netherlands no longer uses the minimum monthly wage system but uses the minimum hourly wage system. A general full – time contract is for 40 hours, and the minimum monthly wage needs to be calculated based on the statutory minimum hourly wage.
As of July 1, 2025: € 14.40/hour (excluding holiday allowance).
Probation Period
For open – ended employment contracts: the maximum probation period is 2 months.
For fixed – term employment contracts:
If the contract term is 2 years or more: the maximum probation period is 2 months.
If the contract term is between 6 months and 2 years: the maximum probation period is 1 month.
For contracts less than 6 months: there can be no probation period.
No probation period is allowed for contract renewals; in no case can the probation period be extended.
Employer Costs
Unemployment insurance AWF – premie: 7.74%.
Differential employee disability fund WGA: 2.68%.
National health insurance ZVW: 6.51%.
Employee disability fund AOF: 7.64%.
Childcare benefit contribution*: 0.50%.
Employer pension**: approximately 15% (as stipulated by the industry CAO).
Mandatory company doctor: €10/employee/month (estimated).
Holiday allowance: An 8% holiday allowance is invoiced separately each month and calculated separately from the salary. However, this cost is already included in the employee’s annual salary.
*The maximum monthly salary is €5,969.
**The maximum pension salary limit in 2025 is €137,800.00 per year.
3. Salary Payment and Statutory Holiday Responsibilities
Personal Income Tax
The part of the annual income up to €75,518 is taxed at 37.07%, and the part exceeding this amount is taxed at 49.50%.
Overtime Pay and Maximum Working Hours
Overtime pay is not mandatory.
The standard working hours are 8 hours a day and 40 hours a week. The standard working week is from Monday to Friday.
Statutory Holidays
Dutch employees are entitled to a minimum of four times the number of working days per week as annual statutory leave.
For full – time employees working five days a week, this usually means 20 days of leave. Most employers in the Netherlands give employees 25 days of paid leave. Most employers or collective agreements (CAO) provide additional leave.
Treatment or Conversion Logic for Unused Annual Leave at the End of the Year
Statutory annual leave must be used up before July 1st of the following year, otherwise, it will expire. The validity period of non – statutory annual leave can be separately stipulated by the company. When the contract is terminated, unused leave will be converted and paid according to the daily wage.
Statutory Public Holidays
There are 11 national holidays in the Netherlands.
National public holidays include: New Year’s Day; Good Friday (not a mandatory holiday, but most employers choose to give a day off); Easter; Easter Monday; King’s Day; Liberation Day (once every 5 years); Ascension Day; Pentecost; Pentecost Monday; Christmas Day; Boxing Day.
Other Holidays
Maternity Leave: Female employees are entitled to at least 16 weeks of paid maternity leave, including a maximum of 6 weeks before birth and at least 10 weeks after birth. In the case of multiple births, the maternity leave is extended to 20 weeks. During maternity leave, the employer advances the salary, and then the UWV reimburses the amount within the legal limit. The employee actually receives 100% of the salary (not exceeding the reimbursement limit). Maternity leave rights are not restricted by length of service, and employees can take paid leave for prenatal check – ups.
Paternity Leave: The employee’s partner is entitled to paid leave equivalent to their weekly working hours (5 working days for full – time employees). This leave must be taken within four weeks after the birth. Within six months after the birth, full – time employees can take an additional 5 weeks of paternity leave. The employer does not pay the salary for this leave. Employees can apply for a subsidy through the UWV: 70% of the last month’s salary (with a maximum daily wage limit of €276/day × 70%).
Parental Leave: In addition to maternity and paternity leave, parents of children under 8 years old are entitled to parental leave equivalent to 26 times their weekly working hours, which can be taken once for each child. The first 9 weeks are paid leave, and the remaining 17 weeks are unpaid leave. The time for employees to take parental leave can be negotiated and can be spread over 8 years. Parents are entitled to take parental leave for each child. The first 9 weeks of parental leave are paid by the government, with an amount equivalent to 70% of the employee’s normal salary, but not exceeding 70% of the maximum daily wage. Employees can flexibly arrange parental leave, but the total leave duration must be equal to a full week of the employee’s working time. Paid parental leave can only be taken until the child is one year old. Employers can apply for a paid parental leave allowance for their employees through the Dutch Employee Insurance Agency (UWV).
Sick Leave: The employer is obliged to pay the sick employee’s salary for two years. The salary payment amount is 70% of the employee’s last year’s salary (provided that the salary does not exceed the maximum daily wage; if it exceeds the maximum daily wage, the upper limit of the continued salary payment is 70% of the maximum daily wage), and the salary in the first year should at least reach the statutory minimum wage. Generally speaking, employment contracts usually stipulate that in the first year of an employee’s illness, the employer will pay 70% or 100% of the employee’s full salary (without an upper limit on the amount); in the second year of the employee’s illness, the employer will pay 70% of the employee’s full salary (the amount can be capped).
Calculation Logic for Incomplete Attendance Salaries (Including Absence or Unpaid Leave)
If an employee has non – attendance situations (such as personal leave, unpaid leave, unauthorized absence, etc.) in a month, their salary will be calculated as follows: Payable salary = monthly basic salary ÷ number of working days per month × actual number of attendance days.
The number of attendance days is usually calculated according to the standard working days agreed in the employment contract.
For hourly workers or employees with flexible working hours, the calculation is based on the actual number of working hours.
No salary is paid during unpaid leave (such as the part exceeding statutory parental leave, personal leave).
During paid leave such as sick leave and annual leave, the salary is paid normally or in accordance with the sick leave regulations.
(In practice, most Dutch companies do not strictly enforce “attendance” for full – time employees. For example, if it does not affect the work, an employee can tell the team leader and make up the work progress later if they need to be out for half a day on a working day.)
Expatriate Employees
Local Minimum Wage Required for Split Payroll Work Permits: The Netherlands allows split payroll, but: 1. Employees in the Netherlands should legally declare their global income; 2. The employer needs to determine whether the Dutch wage tax withholding obligation is triggered; 3. Whether the tax exemption agreement applies depends on the dispatch structure and actual residence days.
Whether Local Social Welfare Can Be Withdrawn (Such as Housing Provident Fund): No.
4. Dismissal Rules and Compensation Arrangements
Dismissal (Legal Requirements and Best Practices)
Notice Period: If the employer unilaterally terminates the employment contract, it must comply with a notice period of at least 1 month, and the specific period can be extended according to the employment contract or applicable collective agreement. Common practices are as follows:
Service years < 5 years: notice period of 1 month.
5–10 years: notice period of 2 months.
10–15 years: notice period of 3 months.
≥15 years: notice period of 4 months.
If the contract stipulates that the employer has a notice period of more than 1 month, the employee’s notice period must be shortened to half of the employer’s notice period, or the employer needs to compensate for the difference in salary.
The notice of contract termination must be issued “before the last day of the previous complete month of the notice period”; otherwise, the notice period will be extended by one month.
Voluntary Resignation
Employees are allowed to resign at any time.
Reason: There is no legal requirement.
Compliance requirement: Employees must provide written notice through a resignation letter.
Statutory notice period: It is subject to the provisions in the employment agreement. If there is no employment agreement, it is at least 1 month.
Severance pay: There is no legal requirement.
Dismissal during Probation Period
Employers or employees are allowed to terminate the employment relationship at any time during the probation period without obtaining permission from the court or the Dutch unemployment office.
Reason: There is no legal requirement (not based on discriminatory reasons).
Compliance requirement: The termination of employment must not be due to prohibited discriminatory reasons.
Statutory notice period: There is no legal requirement, and it can be terminated on the same day.
Severance pay: No severance pay is paid for dismissal during the probation period. The employer has an obligation to pay severance pay after the probation period.
Negotiated Dismissal
Employers and employees are allowed to mutually agree to reasonably terminate the employee’s employment relationship.
Note: This type of termination allows the employer to avoid the formal procedure of seeking permission from the court or the Dutch unemployment agency and is the preferred course of action for any employer who wishes to dismiss an employee for any reason.
Reason: There is no legal requirement.
Compliance requirement: The agreement to terminate must be voluntary, clear, and confirmed in writing; it is strongly recommended to confirm in writing in the employee’s native language.
Statutory notice period: It can be negotiated, and the mandatory notice period does not apply.
Severance pay: The two parties can freely agree on the amount, which can be higher than, equal to, or lower than the legal standard (but in most cases ≥ the legal standard).
Termination for Business Reasons
Employers are allowed to terminate the employment relationship for business reasons.
Reason: Business (economic) reasons (such as company lay – offs, restructuring, organizational/technical reasons, business closures).
Compliance requirement: Permission from the Dutch Unemployment Agency (UWV) must be obtained to terminate the employment relationship. Detailed arguments must be provided, and relevant supporting documents must be submitted. In the case of economic reasons, financial statements, job cancellation descriptions, and other materials are usually required.
Statutory notice period: The employer can only issue a formal notice to the employee after obtaining approval from the Dutch Unemployment Agency and must comply with the notice period.
Severance pay: Dutch employees are entitled to a statutory transition payment (transitievergoeding) from the start of their employment. If the employer wishes to terminate the contract through negotiation, the two parties can agree on a compensation amount higher than the legal standard.
Dismissal for Just Cause
Employers are allowed to dismiss employees for improper behavior or continuous poor work performance.
Reason: Performance problems after implementing an extensive performance improvement plan; excessive absenteeism due to illness or disability, causing unacceptable consequences to business operations; refusal to work (after multiple warnings); improper behavior (any serious violation of the employment agreement, policies, or applicable laws); poor working relationship (documented, with a high legal threshold).
Compliance requirement: Permission from the Dutch court must be obtained. The basis for termination must be detailed, including performance improvement plans, arrangements, and other reasonable measures taken by the employer to avoid dismissal.
Statutory notice period: Unilaterally dismissing an employee cannot be done simply by issuing a notice. Only after obtaining approval from the Dutch court can a formal notice be issued and the notice period be applied.
In rare cases, if there is workplace fraud, theft, or violence, the employer can immediately terminate the employment contract (immediate dismissal).
Severance pay: Yes, it must be paid, unless extreme circumstances (such as fraud, theft, violence) constitute immediate dismissal. If the employer wishes to avoid court proceedings and reach a settlement, additional compensation usually needs to be negotiated.
Conversion of Unused Annual Leave for Departing Employees
The compensation amount is calculated by multiplying the employee’s daily wage by the number of remaining valid holiday days.
Official Websites for Labor Laws
There is no independent “official website for labor laws” in the Netherlands because labor law content is scattered across multiple government functional websites.
The Dutch Ministry of Social Affairs and Employment (Ministerie van Sociale Zaken en Werkgelegenheid, SZW): https://www.government.nl/ministries/ministry – of – social – affairs – and – employment, the legislative body for labor laws and the official publisher of policies.
UWV (Uitvoeringsinstituut Werknemersverzekeringen): https://www.uwv.nl, which is involved in the practical implementation of dismissal permit applications, sick leave subsidies, unemployment insurance, etc.
The Dutch Tax and Customs Administration (Belastingdienst) – Wage Tax Column: https://www.belastingdienst.nl, which covers salary tax, social security contributions, work permit salary requirements, etc.
5. Incentive Measures and Policy Analyses of Local Governments for Opening Companies and Hiring Local Employees
Incentive Policies
Local Employment Protection Policy: There is no limit for KM, while TWV needs to pass the “Labor Market Test” (Arbeidsmarkttoets) first.
Quota Ratio for Work Permits of Foreign Employees: None.
Funding Policy: There is no direct financial subsidy for hiring foreign employees.
6. Human Resources Analysis and Employment Suggestions in Different Regions
Number of Employed People
The total number of employed people in the Netherlands is approximately 9.5 million (data from 2024), and the labor participation rate exceeds 72%. The service industry (especially finance, logistics, healthcare, and technology) is the main employment area.
Unemployment Rate
The national unemployment rate in the Netherlands is approximately 3.6% (Q1 2025), which is one of the lowest in the EU. The labor market is tight, and the recruitment cycle is long.
Average Salary Trend
The average pre – tax monthly salary of full – time employees is €3,300–€3,600 (median), with a growth rate of 3–5% in recent years. Technical positions (IT, engineering) are significantly higher than the average, and entry – level positions have increased significantly due to the minimum wage.
Employment Suggestions
Specific considerations should be made according to the needs.
7. Cultural Adaptation in Different Regions
Language
The official language is Dutch. Most Dutch people are fluent in English, especially in the workplace. English can be used as a working language, which is particularly common in high – tech and multinational corporate environments.
Religious Customs
The majority of the population is Christian (Protestant/Catholic), but the society is highly secularized. There is tolerance for religious festivals, respect for diverse beliefs, and the influence of religion on public policies is weak.
Business Culture
It emphasizes direct communication, egalitarianism, and efficient execution. Meetings are result – oriented, employees have strong autonomy, and the management style is relatively flat. Punctuality, keeping promises, and written confirmation are highly valued. A good work – life balance is highly regarded.
