How to hire in Netherlands through an EOR

Fixed-term contracts can't run forever in the Netherlands. After three contracts or three years total, they convert to permanent unless a collective labor agreement says otherwise. This chain rule catches a lot of companies off guard.

Most companies default to permanent contracts. They signal commitment and sidestep the strict fixed-term limits. Fixed-term arrangements are fine as a starting point, but you'll want a plan before the chain rule forces permanence anyway.

What has to be in the contract

Contracts don't have to be written down. Verbal agreements count, and regular work patterns like weekly shifts or 20 hours a month can create one automatically. That said, write it down. It's the easiest way to avoid disputes later.

If you do put it in writing, the law requires certain specifics: names and addresses for both parties, job title, work location, hours, salary details, start date, duration, any applicable CAO, and probation terms if you're using them. Add holiday entitlement, notice periods, and pension details where relevant. There's no language requirement, but Dutch or English both work fine.

Probation periods are capped at 2 months, and shorter for fixed-term contracts under 2 years. Either side can end employment during probation instantly, without giving a reason. If you want a probation period, spell it out clearly in the contract or it may not hold up. Notice periods vary by CAO, but employers typically give double the notice that employees are required to give.

Contractor vs. employee

Misclassification is a real risk. Courts look at control: do you set their hours, provide their tools, and integrate them into your team? If the answer is yes, they're likely employees regardless of what the contract says. Personal work, authority over how tasks are done, and a regular wage all point toward employment status.

If you're found to have misclassified someone, you can owe back taxes, social security contributions, vacation pay, and sick leave wages. Tax authority fines can run into thousands of euros per case. Employees can also claim years of benefits retroactively, plus full dismissal protections. Courts reclassify based on the facts, not the paperwork.

Non-competes are enforceable but come with conditions. They require compensation (half pay during the restriction period), can't exceed 1 year, and have to protect a genuine business interest. Courts will strike down anything too broad. On IP: employees own their inventions unless your contract says otherwise, but you can claim ownership of work created as part of their role if it's clearly stated.

For employees, stick to permanent or properly structured fixed-term contracts. If you're still figuring out your setup, an EOR can help you stay compliant while you get started. Either way, have contracts reviewed by someone local before you sign anything.

Dutch employees get a legal minimum of 20 paid vacation days for a standard five-day week, plus an 8% holiday allowance on top of their salary. That's more generous than many countries, and local candidates expect employers to go further.

Time off

Full-time employees working five days a week get at least 20 days of statutory annual leave. That works out to four times their weekly hours, so part-timers get a pro-rated amount. Leave accrues from day one and must be taken in the calendar year or by June 30 of the following year, or it expires.

On top of that, employees receive a holiday allowance of 8% of gross annual salary, paid as a lump sum in May or June. It's calculated on wages earned from June to May, including overtime but not bonuses. That adds up to close to a full extra month's pay before tax.

Public holidays aren't automatically days off. They only apply if they fall on a workday and your collective agreement (CAO) includes them. There are roughly 10 per year, and most employers do grant them as extra leave.

All leave types

Here's what the law requires. Pay is full salary unless noted, and all types carry job protection.

Mandatory benefits

You're required to withhold and pay social security contributions. The total rate is around 27% of gross salary up to a cap, split roughly 50/50 between you and the employee. This covers health, disability, unemployment, and survivor benefits.

Health insurance is mandatory for everyone. Employees pay around €140/month in premiums, but you're required to reimburse 50% if their income is under €39,000 (2024 threshold). There's no employer contribution beyond that.

Pension isn't universally mandated by law, but most sectors require it through industry collective agreements (CAO). Employers typically contribute 50-70% of the total premium.

There are no requirements for meal vouchers or transport passes. That said, many CAOs do include travel allowances of up to €0.23/km or group health perks.

What people actually expect

The legal floor is 20 days plus the 8% allowance, but 25-30 days is standard in most CAOs and contracts. If you're only offering the minimum, you'll find it harder to compete for good candidates. Factor in 8-10 public holidays and it's easy to reach 30+ total days off.

Sick pay at 100% for two years is common practice, not just the 70% statutory minimum. Private health top-ups are rare since public coverage is solid, but international employees often ask about global options.

Most Dutch workers expect hybrid or remote setups, often with a home office stipend of €50-100/month. Meal allowances and gym memberships come up more in tech and creative roles. If you stick to the minimums across the board, expect longer hiring timelines and higher turnover. Offering 25+ days, full sick pay, and flexible working will put you in a much stronger position.

Letting someone go in the Netherlands takes real care. It's one of the most employee-protective countries in Europe, and courts tend to side with workers when employers cut corners.

Firing someone

You can only dismiss for specific, recognised grounds: poor performance, long-term illness after two years, economic restructuring, or serious misconduct. Refusal to work or culpable acts also qualify. But you'll need to prove your case, usually through the Employee Insurance Agency (UWV) or a sub-district court.

Dismissal without a valid ground, or during a protected period, counts as unfair. You can't let someone go while they're ill in the first two years, pregnant or on maternity leave (including six weeks after), on parental or care leave, or serving as a works council member. Economic dismissals require you to show genuine business need, fair selection, and no suitable alternative role available. If a comparable position opens within 26 weeks, you have to offer it to the dismissed employee first.

Discrimination based on age, gender, disability, or union activity is illegal and carries serious penalties. If you're using mutual consent to end employment, get it in writing. The employee has 14 days to change their mind, or 21 days if you forget to include that right in the agreement. Non-compliance can lead to annulment, reinstatement, back pay, or additional compensation.

Follow the process carefully. An EOR can handle UWV requests and keep your documentation in order, which goes a long way toward avoiding disputes.

Notice periods

Notice periods for employers increase with tenure. Employees typically give one month's notice, unless their contract or a collective labour agreement (CLA) sets something different.

CLAs can extend these periods further. You're required to pay salary throughout the notice period, even if the employee isn't working. If approval is delayed, you'll owe pay in lieu.

Severance

Most dismissals you initiate trigger a transition payment, starting from day one of employment. That includes choosing not to renew a fixed-term contract. The main exceptions are serious misconduct or voluntary resignation.

The formula is 1/3 of monthly salary per full year worked, pro-rated for partial years. Monthly salary includes base pay, fixed allowances, and holiday pay. Use whichever is higher: the salary at the time of dismissal or the salary from one year prior.

In 2026, the cap rises to €102,000 gross, or one year's salary if that's higher. From July 2026, smaller employers may be able to access government support for long-term illness dismissals. Larger employers pay the full amount. It's worth budgeting for this early, especially since fixed-term contract endings catch a lot of companies off guard.

Work permits and visas

You can hire foreign nationals through an EOR. They act as the legal employer and can sponsor visa applications where needed. EU, EEA, and Swiss citizens don't need a work permit, but they do need to register for residency.

The most common routes are the Highly Skilled Migrant visa (for salaries over €5,000/month, with a lower threshold for under-30s), the Knowledge Migrant visa, or an intra-company transfer. Other nationalities may need a standard work permit (TWV), though labour shortages can ease that requirement. EORs manage sponsorship and handle applications through the IND (Immigration and Naturalisation Service).

Processing times run around 2-4 weeks for highly skilled migrants, and longer for other categories. You'll need a job offer, proof the salary meets the threshold, and relevant qualifications. There's no digital nomad visa in the Netherlands yet. Proposed EU talent schemes may introduce a three-year stay limit with specific salary and housing requirements.

An EOR handles the paperwork, runs labour market tests where required, and manages renewals. That removes the need for your own legal entity to take on sponsorship obligations.

Other things worth knowing

GDPR applies strictly. You're required to report data breaches within 72 hours, and employees have strong rights over their personal data.

Trade unions and CLAs cover around 80% of workers in the Netherlands. They often set higher standards on pay, hours, and notice periods than the statutory minimums. Check which sector CLA applies to your employees, because it's binding.

2026 brings several significant changes. Non-compete clauses are capped at one year, must include justification and geographic limits, and require you to pay 50% of salary during enforcement. Stricter rules on false self-employment take effect from January, including penalties for misclassification and a presumption of employee status for workers earning under €36/hour. Equal pay for temporary workers kicks in from January or July depending on the measure. Wage cost benefits for workers over 56 are being phased out. The severance cap is going up. Review your contracts now if you haven't already.

An EOR tracks these changes, drafts compliant documentation, and flags relevant CLA requirements. Missing them can mean fines, back pay, or more serious legal exposure.