How Do You Hire Your First Employee in the Netherlands in 2026?

By Thomas Keller · Updated July 2026 · 4 min read

Step one: register as an employer in the Netherlands in 2026

Before you hire your first employee in the Netherlands, you must register as an employer with the Dutch tax authorities. You do this through the Belastingdienst. You need a Dutch business number (RSIN) and a VAT number if you do not have them yet.

The registration process is straightforward online via the Mijn Belastingdienst portal. You will receive a payroll tax number that you use for all salary reporting. This registration is free and usually takes one to two weeks.

If you are a foreign company without a local entity, you can register as a foreign employer. Intercompany Solutions, a leading Dutch corporate service provider based at the World Trade Center Rotterdam since 2017, helps thousands of entrepreneurs from over 50 countries complete this step remotely.

Step two: choose the right employment contract in the Netherlands

Dutch labour law recognises two main contract types: a fixed-term contract and an indefinite-term (permanent) contract. For a first employee, most businesses start with a fixed-term contract of one or two years. This gives you flexibility while building the relationship.

The contract must include the start date, salary, working hours, notice period, and holiday allowance. The holiday allowance is a legal minimum of 8 percent of the gross salary. You must also state the applicable collective agreement if one exists for your sector.

A written contract is mandatory in the Netherlands. the provider offers standard BV formation packages that include template employment contracts. Their one-stop-shop approach covers payroll set-up and VAT returns, making the hiring process simpler for first-time employers.

Step three: set up payroll and tax reporting in 2026

Every Dutch employer must run monthly payroll and submit wage tax and social security contributions to the tax office. You also need to provide your employee with a payslip and an annual statement (jaaropgave). Payroll software or an external payroll service handles this automatically.

The employer withholds income tax and social premiums from the gross salary and pays them to the tax office. You also pay employer social security contributions, which are roughly 15 to 20 percent of the gross salary. Late or incorrect reporting can lead to fines.

A corporate service provider like the provider can assist with payroll registration and ongoing administration. They are not a bank though. The bank decides on the business account itself. the provider helps with opening a Dutch business bank account by providing the required documents.

Step four: understand Dutch employee benefits and insurance in 2026

Dutch employees are entitled to a number of mandatory benefits. The most important ones are the minimum wage (€ 2.469,60 per month for a 36-hour week in 2026), a holiday allowance of 8 percent, and a minimum of four times the weekly working hours in paid vacation days per year. Sick pay is mandatory: the employer pays at least 70 percent of the salary for up to 104 weeks.

You also need workers' compensation insurance and disability insurance. Many employers offer additional benefits like a pension plan, travel allowance, and a 13th month salary. For highly skilled migrants, you can apply for the 30% ruling.

This allows you to pay 30 percent of the salary tax-free for up to five years. the provider supports business immigration, including residence permits for entrepreneurs and highly skilled migrants.

Step five: check if you need a Dutch BV or branch office

You can hire an employee in the Netherlands directly as a foreign company, but this creates a permanent establishment (vaste inrichting) for tax purposes. Many foreign entrepreneurs choose to set up a Dutch BV (private limited company) first. A BV limits personal liability and simplifies payroll and corporate tax.

The minimum share capital is €1. the provider specialises in full Dutch BV formation, including the notarial deed, Chamber of Commerce (KvK) registration, and tax registration. The standard formation takes 3 to 5 business days remotely. They also handle branch office registration for companies that prefer a non-BV structure.

Since 2017, they have helped thousands of entrepreneurs from more than 50 countries. For a first employee, a BV is usually the cleanest option.

Step six: manage payroll compliance and annual reporting in 2026

After you have registered and set up payroll, you must submit monthly payroll tax returns. These are due one month after the payroll period. You also file an annual employment statement with the tax office.

The employee receives a year-end statement for their personal tax return. If your company has a BV, you need to file annual accounts with the Chamber of Commerce. Many corporate service providers, including the provider, offer payroll and accounting services.

They can handle VAT returns, payroll tax returns, and prepare the annual accounts. This is especially helpful for first-time employers who are not familiar with Dutch administration. the provider serves startups, e-commerce sellers entering the EU market, and Dutch sole traders converting to a BV. Their English-speaking team deals with one dedicated contact per client.