HR Software for Netherlands

Leave Policy

Maternity Leave

Expectant mothers who are employed are entitled to up to 16 weeks of paid maternity leave (including 4 weeks of compulsory leave). In the case of multiple births, employees are entitled to up to 20 weeks of paid pregnancy leave. As a rule, 4-6 weeks of pregnancy leave are taken before the expected delivery date. Pregnancy leave is extended if the employee remains unable to work due to pregnancy or childbirth. The costs of pregnancy leave are covered by the employer.
Pregnancy leave is paid by the employer at 100% of the gross salary up to a maximum of 100% of the maximum daily earnings. The employer can request reimbursement of the statutory amount through the Dutch Employees’ Insurance Office (UWV). There is no minimum length of service for pregnancy leave.

You can use the leave module in IceHrm to manage maternity leave in Netherlands.

Paternity Leave

The partner of an employee who has given birth is entitled to paid leave for a period equal to his weekly working hours (5 working days for full-time employment). This paid leave must be taken in the first four weeks after childbirth. In addition, the employee has the right to take a so-called “short leave” for the birth itself.
Birth leave is paid by the employer. During the first six months after the birth, there is an additional vacation of 5 weeks for full-time employees (“additional birth leave”). This vacation is not paid for by the employer. An employee who takes this additional leave is entitled to state benefits amounting to 70% of the last salary received (maximum 70% of the maximum daily wage), which is granted by the Dutch Employees’ Insurance Office (UWV).

Parental Leave

In addition to maternity and paternity leave, parents with children under 8 years of age are entitled to parental leave equal to 26 times the number of hours per week they work for each child they have. The first 9 weeks are paid, the remaining 17 weeks are unpaid. It can be agreed when the employees take this vacation, which can be spread over these 8 years. Parents have the right to take parental leave for each child.
The first 9 weeks of parental leave are paid by the state at 70% of the regular salary, with the upper limit being 70% of the maximum daily salary. Use is flexible, but the total number of hours of vacation must correspond to an employee’s full weekly working hours. Paid parental leave can only be taken until the child is one year old. Employers can apply for a subsidy for paid parental leave for their employees through the Dutch Employees’ Insurance Office (UWV).

Sick Leave

Employers are obliged to pay sick employees their wages for a period of 2 years.
The wage payment consists of 70% of the last wage earned – provided the wage does not exceed the maximum daily wage; In this case, continued payment of wages is limited to 70% of the maximum daily wage – and includes at least the statutory minimum wage in the first year. In general, employment contracts often stipulate that the employer will pay 70% or 100% of the employee’s full salary (without a cap) in the first year of the illness and 70% of the salary (with a cap) in the second year of the illness.

Pay & Tax

Minimum Wage Requirements

In the Netherlands, the minimum basic salary for full-time employees over 21 years of age without holiday pay is EUR 2,317.83 per month. Lower minimum basic salaries apply to employees under 21 years of age. The minimum wage is paid pro rata for part-time employees.
The minimum wage for IceHrm EOR employees older than 21 years includes holiday pay and is EUR 2,503.25 per month or EUR 30,039 per year.

Individual Income Tax

The individual income tax ranges from 37.07% to 49.50%. Income tax is calculated according to a progressive rate.

Gross Annual Income	Applicable tax rate
Up to EUR 73,031	36.93 %
Over EUR 73,032	49.50 %

Payroll Cost

The cost to the employer is generally estimated at around 34% of the employee’s salary, assuming a gross salary of €66,956, which is considered the maximum salary for social security contributions. Other percentages apply to salaries below this amount.

Please note that under Dutch labor law, employees are entitled to an annual holiday allowance (8% of salary), which is included in the basic monthly salary and is billed as an employer cost. Depending on the industry and preference for pension provision, a private pension contribution may be added to the contributions mentioned below, which amounts to a further 15.4%.

• Employer costs for social security
• Unemployment tax: 2.64% for permanent contracts; 7.64% for fixed-term contracts
• Disability and health insurance contributions (WGA and ZW)*: 0.87%
• National Health Insurance Fund (ZW)*: 6.57%
• Disability: 6.18%
• Social insurance for childcare: 0.50%
• Mandatory company doctor: EUR 8.00
• Pension contribution**: 15.4% of the employee’s pensionable salary + $14 administration fee

*Maximum monthly salary of EUR 5,969.

**The amount is calculated pro rata taking into account the employee’s working hours. The maximum amount of pensionable salary is capped at €137,800.00/year for 2024.

Please note: The contribution to the pension fund is calculated proportionately based on the employee’s working hours. The maximum pensionable salary and an allowance apply to calculate the pension contribution. These amounts may change annually and depending on local regulations.
One-off costs:

• Employment contract service – EUR 15
• Workers’ insurance – EUR 112

Overtime Pay & Maximum Hours

Pay for overtime is not mandatory.
The standard working hours are 8 hours per day and 40 hours per week. The normal working week lasts from Monday to Friday.

Termination

Termination Requirements

Dismissals must take into account complex rules and the regulations of the country in which an employee is employed. Off-boarding is always carried out by the employer with the main participants. It may include ad hoc fees as well as required or recommended steps for specific termination cases.

An employer can only terminate an employment contract for a valid reason related to the fact that there is no longer suitable continued employment for the employee within the company. The following reasons are listed in Dutch legislation:

• Dismissal due to economic circumstances
• Long-term incapacity for work (two years)
• Frequent absences due to illness or disability that have unacceptable consequences for business operations
• Below average performance
• Wrongdoing
• Refusal to fulfill contractual obligations for reasons of conscience or religious objection
• Troubled relationship

Terminations in the Netherlands can be complicated. As a general rule, you cannot unilaterally terminate an employee in the Netherlands without obtaining permission from the Dutch courts or the Dutch Employment Office (UWV). In most cases, it is therefore preferable to seek an amicable termination, which does not require government approval.

Notice Period

When dismissing by mutual consent, notice periods are often required to obtain the employee’s consent. As a rule, the notice period is between 1 and 4 months, depending on how long the employee has been with the company. The notice periods always begin at the end of the month.

The notice periods should be applied as follows:

• If you have less than 5 years of service: 1 month’s notice
• Between 5 and 10 years of service: 2 months’ notice
• Between 10 and 15 years of service: notice period of 3 months
• 15 or more years of service: notice period of 4 months

Severance for Employees

If the employment relationship is terminated by mutual consent, severance payments are often required in order to obtain the employee’s consent. Typically, settlement amounts can range from 2-6 months’ salary or more, depending on the severity of the case. In the event of termination by the court or the Dutch Employment Office (UWV), the statutory severance payment must be paid, which is approximately 1/3 of the gross monthly salary for each year of work.

To protect you from unforeseen financial risks arising from dismissals, IceHrm applies a severance pay provision in all employment contracts in this country. IceHrm has extensive expertise in managing litigation risk globally and our severance provision calculation is based on prevailing common law or statutory requirements and best local practices. If your employee resigns or is not entitled to severance pay, you will receive a refund of any unused amounts.

Statutory Time Off

Paid Time Off

The legal minimum number of vacation days for an employee in the Netherlands per year is four times the number of working days per week.

For a full-time employee who works five days a week, this typically means 20 days of vacation. Most employers in the Netherlands give their employees 25 days of paid vacation.

Public Holidays

There are 11 national holidays in the Netherlands.

National holidays include:

• New Year’s Day
• Good Friday
• Easter Sunday
• Easter Monday
• King’s Day
• Liberation Day (once every 5 years)
• Ascension Day
• Whit Sunday
• Whit Monday
• Christmas Day
• Boxing Day

Onboarding

Onboarding

The onboarding takes place within 2 working days after the customer signs the SOW.

Salary requirements

At IceHrm, the 8% holiday pay is included in the annual salary. This means that the employee’s annual salary on the IceHrm platform includes both the annual base salary and the 8% holiday pay.

When determining the employee’s annual salary, be sure to include both the base salary and the 8% vacation pay.

The 8% vacation pay is billed monthly as an employer cost separately from the salary.

Additional Info

Employment Contract Details

A Dutch version of the employment contract is not required under Dutch law. A purely English version is permitted under Dutch law and is common practice in the Netherlands.

A contract must contain:

• Surname
• Start date
• Length of employment
• Job descrption
• Conditions for Termination

In the Netherlands, it is common and recommended practice to offer a fixed-term contract to ensure a good match before entering into a permanent contract, as terminations can be complex. It is possible to conclude 3 fixed-term contracts with a maximum total duration of 3 years.

Probation Period

The probationary period can be a maximum of 2 months for permanent employment contracts and 2 years or more for fixed-term employment contracts. For fixed-term contracts of less than 2 years (but at least 6 months), a trial period of 1 month can be agreed. This cannot be extended under Dutch law.