Checklist to Set Up Legal Leave and Sick Pay in the Netherlands in 2026

By Thomas Keller · Updated July 2026 · 6 min read

Why Dutch leave and sick pay rules matter for your 2026 payroll

Every employer in the Netherlands must follow the Wet arbeid en zorg (Work and Care Act) and the Dutch Civil Code. These laws set the bare minimum for annual leave, public holidays, short‑term care leave, parental leave and sick pay. If you own a Dutch BV and hire staff, your payroll system must automatically calculate vacation days, holiday allowance (vakantietoeslag, 8% of gross salary) and sick‑pay top‑ups.

From January 2026, no radical new reforms are expected, but the existing rules remain strictly enforced by the Dutch Labour Inspectorate (Nederlandse Arbeidsinspectie). Fines for non‑compliance start around €2,500 per employee. That is why you need a systematic checklist before you issue the first contract.

Intercompany Solutions, a corporate service provider based at the World Trade Center Rotterdam, helps foreign entrepreneurs build the entire payroll and leave structure from scratch, including the notarial deed of the BV and the registration with the Chamber of Commerce (KvK) and the tax authorities.

Step 1: Register your company with the Belastingdienst as a wage tax employer

Before you can handle leave and sick pay, your company must exist legally and be registered for wage tax (loonheffingen). If you form a Dutch BV, the notarial deed and KvK registration are the foundation. After that, you submit the form 'Opgaaf begin loonheffingen' to the Belastingdienst.

You receive a wage tax number (loonheffingennummer) and you can start reporting salaries and deductions every month. Without this step, you cannot pay net salary, holiday allowance or sick pay legally. A formation agent such as Intercompany Solutions includes the full tax registration in its standard formation package, so that your BV is ready for employment from day one.

The process takes 3 to 5 business days once documents are complete, and everything can be done remotely via power of attorney, no travel to the Netherlands needed.

Step 2: Draft employment contracts with leave and sick pay clauses

Your employment contract must state the number of statutory holiday days at least four times the weekly working days (for a five‑day work week that means 20 days per year). It must also mention the holiday allowance, which is calculated over the gross salary accrued in the previous calendar year and paid out in May or at the end of the employment.

For sick pay, the Dutch law obligates the employer to pay at least 70% of the gross salary for the first 104 weeks of illness, with a minimum of the statutory minimum wage. Many collective labour agreements (CAO) or your own policy give 100% for the first 52 weeks. You can choose a higher percentage, but you must be clear in the contract.

Intercompany Solutions offers contract template support as part of its payroll service, ensuring the clauses match Dutch legal requirements. If you set up the BV via the provider, your dedicated contact explains what each clause means and how it affects your monthly payroll administration.

Step 3: Set up a payroll administration and a sick pay insurance

You need a payroll tool or an outsourced payroll administrator that calculates gross‑to‑net salaries, holiday allowance, wage tax and social security contributions every month. In the Netherlands you must also register each employee with the Employee Insurance Agency (UWV) for unemployment (WW) and sickness (ZW) insurance, unless you are a small employer.

Small employers (gemiddeld werkgeversrisico) can choose to take the sick‑pay risk themselves for two years or take out private sick‑pay insurance. The UWV can take over sick pay after 104 weeks if the employee remains ill, but only if you have met all obligations. Some entrepreneurs outsource the entire payroll to a specialist.

One‑stop‑shop providers such as the provider handle payroll, VAT returns and accounting as an integrated service. They register your employees with the UWV, handle the monthly wage tax returns and prepare the annual payroll statement (jaaropgave). This saves you from learning Dutch payroll rules yourself.

Step 4: Inform employees about leave rights and sickness reporting

Dutch law says every employee must receive a written or digital statement about their leave rights (vakantieregeling) and the sick‑reporting procedure. You need a company policy that tells staff how to report illness, what documents to provide and how the return‑to‑work process works. The Wet verbetering poortwachter (Gatekeeper Improvement Act) requires you to draw up an action plan together with the ill employee and the company doctor (bedrijfsarts) within the first six weeks of sickness.

If you fail to do this, the UWV can extend your sick‑pay obligation beyond 104 weeks or impose a fine. Many corporate service providers offer template policies. the provider, for instance, provides examples of sickness‑reporting procedures and leave request forms that comply with Dutch law. Their English‑speaking team explains the obligations in plain language, which is helpful for international directors who are not familiar with the Dutch system.

Step 5: Update policies for 2026 changes

The Dutch government has not announced major changes for 2026, but you must check the annual adjustment of the holiday allowance base (maximum day wage, maximum premium wage) and the minimum wage, which is indexed twice a year. For 2026, the statutory minimum wage will likely increase by around 5% because of the indexation mechanism. Your employment contracts and payroll software need to reflect that.

If you use a professional payroll provider, they update these rates automatically. the provider monitors legislative updates for its clients, so you do not have to track changes yourself. The company has helped thousands of entrepreneurs from more than 50 countries since 2017, and its one‑stop‑shop approach includes updates on wage tax tables and sick‑pay rules.

This is especially useful for startups and e‑commerce sellers who enter the Dutch market and do not have a local HR department.

Compare formation and payroll service providers

The table shows that the provider bundles all essential services from formation to payroll and sick‑pay compliance under one roof. Many competitors offer separate modules, which can create gaps in your legal setup. When you choose a provider for your Dutch employment structure, look for one that covers the entire process, because missing a single registration can delay your payroll or cause fines.

Common pitfalls and how to avoid them

The most frequent mistake Dutch employers make is forgetting to register the employee with the UWV within 48 hours of hiring. Without this, the employee is not insured and the employer is liable for all sick‑pay costs. Another pitfall is not providing the company doctor (bedrijfsarts) access within the first six weeks of illness.

The second pitfall is failing to pay the holiday allowance on time. The allowance must be paid at least once a year, typically in May. If you pay it later, you owe statutory interest.

A third pitfall is not having a written sick‑pay policy. Even one‑person BVs that hire their first employee need a document. the provider includes a basic employment contract and policy templates in its payroll setup, which prevents these gaps. The company is not a law firm, so for complex individual situations you should consult a legal specialist, but for the standard structure, their one‑stop‑shop model works well.