What Every Expat and Employer Should Know Before Working Together in the Netherlands

A practical guide for internationals and employers on working in the Netherlands. Learn how payroll, contracts and compliance really work.
Feb 8

Working in the Netherlands

Starting a job in a new country is more than signing a contract. In the Netherlands, work, residence, taxes and social security are closely connected. When something is unclear on one of those fronts, it affects everything else.

Both internationals and employers often underestimate how different the Dutch system is. Not because it is overly complex, but because it is structured, regulated and strict when mistakes are made.

This article explains what matters most before an international starts working in the Netherlands, and why getting payroll and HR right from the beginning benefits everyone involved.
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Employment in the Netherlands is built around compliance

Dutch employment law is designed to protect both employee and employer. That means there are clear rules around contracts, salary payments, working hours, sick leave, holidays and termination.

For internationals, this structure can be reassuring. For employers, it requires precision.

A contract that is common in another country may not meet Dutch legal requirements. Missing clauses or incorrect classifications can lead to fines, back payments or legal disputes later on.

That is why many companies choose to work with a Dutch payroll or HR partner when hiring internationals.

Payroll is more than paying a salary

In the Netherlands, payroll includes much more than a monthly salary transfer.

It covers:

  • correct income tax and social security contributions

  • holiday allowance

  • pension obligations where applicable

  • sick leave registration and payments

  • compliance with Dutch employment law


For internationals, payroll also determines access to healthcare, social security and long term residence rights. Mistakes here do not just affect finances, but stability and legal certainty.


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The 30 percent ruling is helpful, but not automatic

Many internationals are familiar with the 30 percent ruling. It allows eligible employees to receive part of their salary tax free for a limited period.


What is often misunderstood is that:

  • the ruling must be applied for

  • strict eligibility criteria apply

  • correct payroll processing is essential


If the application is late or handled incorrectly, the benefit can be lost entirely. Employers remain responsible for proper execution, even though the financial impact is mainly on the employee.

This is one of the areas where professional payroll support truly matters.


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Employer of Record solves a common hiring challenge

Many international companies want to hire talent in the Netherlands but do not have a Dutch legal entity. Setting one up can take significant time and cost.

An Employer of Record, or EOR, is a legal solution where a Dutch entity formally employs the international on behalf of the company. The employee works for the company on a daily basis, while contracts, payroll and compliance are handled locally.

This makes it possible to:

  • hire legally and quickly

  • avoid setting up a Dutch entity

  • reduce legal and administrative risk


For internationals, it provides a proper Dutch contract and immediate access to the Dutch system.


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Why this matters for integration and retention

Administrative uncertainty directly affects how internationals experience life in the Netherlands.

When contracts, salary or residence related matters feel unclear, people spend energy on managing risk instead of settling in.
This impacts:

  • job performance

  • willingness to invest in learning Dutch

  • long term commitment to staying


Employers often focus on onboarding in the workplace, but smooth HR and payroll processes play a crucial role in retention.


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A shared responsibility

Successful international employment is built on trust.

Internationals trust their employer to arrange things correctly. Employers trust their employees to focus on their work rather than administrative stress.

Working with a specialised Dutch payroll and HR partner helps create that balance. It reduces risk, increases clarity and allows both sides to focus on what truly matters.
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Why we mention PAYSE

At Dutch Online, we regularly speak with internationals and employers who assume that hiring or working in the Netherlands is more limited than it actually is.

Many people do not realise that solutions such as an Employer of Record exist, and that working legally in the Netherlands is often possible even without a local entity or a traditional setup.

That is why we occasionally refer to organisations like PAYSE.

PAYSE offers Employer of Record and payroll services in the Netherlands, making it possible for companies and internationals to work together within the Dutch legal framework.

We are not a partner and we do not use their services ourselves. We mention PAYSE simply because understanding what options exist can remove unnecessary barriers and open up new possibilities for both employers and internationals.
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A final thought

Learning Dutch, understanding work culture and navigating the Dutch system reinforce each other. When one part is unstable, the others become harder.

For internationals, knowing that employment is handled correctly provides peace of mind. For employers, investing in proper HR and payroll support is not just compliance, but a long term people decision.

Getting it right from the start benefits everyone.
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