Payroll tax and employer registration

This information is provided by

Netherlands Enterprise Agency, RVO

If you employ staff in the Netherlands, you are obliged deduct payroll tax from your employees' wages. Payroll tax consists of:

Before you employ staff, you must register as an employerExternal link with the Dutch Tax and Customs Administration. You may also have to register if your company has its registered office in another countryExternal link. Once you have registered, you will receive a payroll tax number and the forms you require.

Check your employee's identity

Your employee provides you with a signed statementExternal link that includes data such as name, address, date of birth and citizen service number (burgerservicenummer, BSN). You verify and record each employee’s identity. If verification of the employee’s identity is not, or not completely, possible, you will have to apply the so-called anonymous rateExternal link (anoniementarief). In the case of a foreign worker, you must also check whether they are permitted to work in the Netherlands. Make sure you have all the necessary information before they start working for you. If your company has been involved in fraud or illegal workers, the Dutch Tax and Customs Administration may require you to submit first-day registrationsExternal link for new employees for a period of 3 years.

Keep payroll records

You must keep your employees' data, such as their employment contract, in your personnel records. You use part of this data for your payroll recordsExternal link. You determine the elements of the employee’s wage, calculateExternal link the correct contributions and taxes, file a tax returnExternal link and pay what you owe by the due date. For this, you may want to use payroll software or hire a payroll office, accountant or financial advisor.

In the Payroll Taxes HandbookExternal link (pdf, in Dutch), issued by the Dutch Tax and Customs Administration, you can read everything you need to know about payroll tax. For instance, the handbook contains payroll tax and national insurance rates tables as well as a guide on how to calculate payroll taxExternal link (pdf, step 7 Handbook).

Set off VAT payment against payroll tax declaration

Under specific conditionsExternal link (in Dutch), it is possible to set off a VAT payment against a payroll tax declaration. If you file your VAT and payroll tax returns on time, and in the same period, and you have no outstanding tax debts, you can file a request to do so. Use the (Dutch-language) form Request setting off VAT refund against payroll taxExternal link (Loonheffingen verrekening met teruggaaf btw).

Payroll tax temporary staff or subcontracted work

If you hire temporary staff through an intermediary or subcontract work to a contractor/subcontractor, the intermediary or contractor/subcontractor must pay the payroll tax for these staff. If they fail to do so, the Dutch Tax and Customs Administration may hold you liable.

Premiums

You pay various premiums for employee and national insurance contributions: for unemployment, occupational disability and sickness. You also pay a sector fund premium: a contribution towards unemployment costs in the sector you are affiliated withExternal link. You can use the payroll tax number when you file your payroll taxesExternal link and whenever else you contact the Tax and Customs AdministrationExternal link.

When you register with the Dutch Tax and Customs Administration as a starting employer, they determine the sector to which you belong within 8 weeks. However, you can appeal against this decision, since the choice of sector determines the premium you have to pay.

Changes in labour and social security law

On 1 January 2020 changes took place in labour and social security law. This affects, among other things, the unemployment insurance premiums you have to pay. Read our Balance Employment Market Act checklist.

This information is provided by

Netherlands Enterprise Agency, RVO