PEO Netherlands

Professional Employer Organization (PEO)

Employer of Record (EOR) | Remote Work

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World Bank Ease of Doing Business Ranking

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  • DB Rank – 42
  • DB Score – 76.1

Rankings on Doing Business topics – Netherlands

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Topic Scores

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Global PEO in Netherlands

The Netherlands emerges as an exceptional choice for businesses considering a Professional Employer Organization (PEO). Renowned for its strategic location, advanced infrastructure, and highly skilled workforce, the Netherlands offers an inviting environment for companies looking to expand their global footprint. With its business-friendly policies and ease of doing business, the country provides an optimal setting for PEOs to deliver efficient HR and employment solutions. Navigating the intricacies of Dutch employment regulations becomes smoother with the assistance of PEOs, ensuring compliance while accessing a diverse pool of talent. As a PEO destination, the Netherlands not only streamlines administrative processes but also opens doors to a thriving market and unparalleled growth prospects.

What Is a PEO?

A PEO, or Professional Employer Organization, is a company that provides a range of HR and payroll services to small and medium-sized businesses. These services can include employee benefits, payroll, compliance with labor laws, and recruiting and training.

PEOs work by entering into a co-employment agreement with the businesses they serve. In this arrangement, the PEO becomes the employer of record for the business’s employees, taking on responsibilities such as payroll, tax withholding, and employee benefits. The business, however, retains control over its day-to-day operations and the supervision of its employees.

PEOs can help businesses streamline their HR and payroll processes, reduce costs, and free up time and resources to focus on their core business activities. They can also provide access to a range of benefits and resources that small businesses may not be able to afford or manage on their own.

PEOs are also understood as employer of record / EOR at times.

Netherlands – Country Overview

The Netherlands’ open economy is competitive, and thrives through it openness to global trade and investment. Also, the country’s independent judicial system provides strong protection of property rights and fosters the rule of law.

The Netherlands has thriving start-up businesses. In fact, the surge of successful entrepreneurial ventures has made the country one of the sought-after start-up hubs in the Europe. The country is also the second biggest agricultural exporter (after the US), and its combined value of exports and imports is equal to 161.2% of GDP.

Capital City




Principal Language



Constitutional Monarchy

Major Cities

Amsterdam, The Hague, Rotterdam, Utrecht

Employment Contracts in the Netherlands

Employers and employees can implement either a verbal or written employment contract. However, within a month of work commencement, employers must provide a written contract which includes the following:

  • Salaries / Wages
  • Hours of work
  • Job description
  • Location of work
  • Beginning and duration of the contract
  • Duration of probationary period
  • Pension benefits, and
  • Details of the collective labor agreement, if there is any.

Most agreements contain a probationary period, though it is not mandatory for employers to include this. The duration of probationary periods in employment contracts and collective bargaining agreements are usually for 1 to 2 months, depending on the type of contract.

Employers cannot hire the same employee to fulfill their temporary work requirements for more than 2 consecutive years. After 2 years of temporary contracts, the subsequent contract must be permanent. It is only possible to prevent a change from a temporary to a permanent contract if there is a minimum gap of 6 months between the 2 contracts. Otherwise, it is legally considered as 1 contract with consecutive days.

Working Hours in the Netherlands

Under the Working Hours Act, the maximum workday has 12 hours and the maximum workweek is 60 hours. Over a 4-week period, an employee’s average workweek cannot be more than 55 hours. Over a 16-week period, the average work hours cannot exceed 48 hours.

Any work done for more than an hour between midnight and 6:00 a.m. is considered as a night shift. Night-shift jobs have rules that are more stringent for employers. These rules are listed below:

  • The maximum duration of night shift is 10 hours
  • The average workweek must not be more than 40 hours over a 16-week period
  • After a night shift, employees must receive at least a 14-hour gap between their shifts
  • If employees work 3 or more night shifts consecutively, they must be given at least 46 hours off before their next shift.

In the case of a general shift, after a shift is completed, an employee’s next shift cannot start for at least 11 hours. However, it can be shortened to 8 hours once per week. Employees are entitled to 36 consecutive hours of rest after a 5-day work schedule. Workers may work longer in a week, provided they have a minimum rest period of 72 consecutive hours every 14 days.

Overtime Rules

The Dutch law does not specify any national standard as overtime rules. Overtime pay rates are typically included in employment contracts or collective bargaining agreements.

If employees work beyond the normal weekly work schedule under the Working Time Act, they may be entitled to overtime pay at a higher rate or receive compensatory time off in lieu of that time. The typical work hours per week are between 36 and 38 hours.

Employee Leave in the Netherlands


In the Netherlands, there are 2 national holidays: the King’s birthday, April 27, and Liberation Day, May 5, celebrating the end of World War II. Liberation Day is celebrated every 5 years; the next celebration will take place in 2020.

Other observed public holidays are:

  • New Year’s Day
  • Good Friday
  • Easter Monday
  • Ascension Day – the 40th day after Easter Sunday
  • Whit Monday (the day after Pentecost, which is the seventh Sunday following Easter)
  • Dec. 25: Christmas Day
  • Dec. 26: Boxing Day

Public holidays that fall on weekends are not moved to a weekday.

Annual Leave

Employees receive annual vacation at least 4 times the number of days they work every week. For example, an employee who works 5 full-time days per week receives 20 days or 4 weeks of paid vacation every year. Many collective bargaining agreements provide more than the minimum vacation allowance, which is often 25 days. In addition, employees are paid a holiday allowance each year that amounts to 8% of their gross annual salary. Unused leaves can only be carried over for 6 months.

Maternity Leave

Under the Work and Care Act, female employees are entitled to a minimum of 16 weeks as maternity leave. The leave may commence up to 6 weeks before the child is due and should start no later than 4 weeks before the child is born and can continue for at least 10 weeks after birth. The Working Time Act of 1996 provides mothers who resume working after giving birth the right to feed the infant on the job site for up to 9 months after birth.

Nursing mothers in the workplace will receive full pay. Women who are self-employed can receive pregnancy and maternity benefits through the Social Security Agency (UWV) for up to 16 weeks, usually beginning 6 weeks before the child’s birth.

Paternity Leave

According to the Work and Care Act, an employee whose wife or partner gives birth is entitled to 2 days of paid leave and 3 additional days of unpaid leave within the 4 weeks after the child has been brought home from the hospital. The employee can take emergency leave for the childbirth. Employers cannot deny a request for paternity leave.

Employee Benefits in the Netherlands

According to the Dutch law, the current legal retirement age is 66 years, and will be 67 years and 3 months by Jan.1, 2022. The General Old Age Pensions Act outlines that Dutch residents, who reach the retirement age are eligible to start receiving a flat-rate pension benefit based on the net minimum wage and the person’s living situation.

Both employees and employers contribute to the social insurance system which includes a workers’ compensation system administered by the Work and Income according to the Labor Capacity Act. An injured employee is entitled to paid sick leave for up to 2 years under the Work Plan for the Partially Disabled (WGA). If it is determined that an employee will be able to earn no more than 20% of pre-injury wages and there is no chance of recovery, the person will be placed under the Income Provision Plan.

Terminated employees aged less than 65 years may be entitled to an unemployment insurance allowance through the Institute for Employee Benefit Plans. To qualify for this allowance, a former employee must have worked for a minimum of 26 of the 36 weeks preceding the first day of unemployment.

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