If you need staff, but do not want to employ them yourself, you can hire them through a payroll company. To do so, you enter a contract with a payroll company. Payroll employees are entitled to at least the same working conditions as staff directly employed by you.
What is payrolling?
Payrolling (in Dutch) is a special form of hiring staff. The payroll company employs the payroll employees who work for you. The payroll company provides staff on loan and you borrow them, so to speak, as its client. You recruit the payroll employees yourself, determine their salary, and have complete supervision. The payroll company takes all the employers’ administrative duties out of your hands. It takes care of the labour contracts, annual income statements, salary administration, and pension.
Responsibility payroll tax payment
A payroll company pays the payroll tax and social insurance contributions. However, the Dutch Tax and Customs Administration (Belastingdienst) can hold you liable if the payroll company fails to do so. Some payroll companies have the SNA quality mark of the Dutch Labour Standards Association (Stichting Normering Arbeid, SNA). SNA periodically checks these companies, which limits the risks for all parties involved.
Terms of employment
Payrollers are entitled to at least the same working conditions as the employees you have on a fixed-term or permanent contract. If you hire staff through a temping agency or payroll company, you must inform the payroll company about the working conditions for your employees. This must be done before the payroller officially starts working for you. If you do not have any staff, the working conditions for similar work in your sector apply.
Payrolling and pension schemes
Payroll employees are entitled to sufficient pension schemes. There are 2 ways in which this can be done:
- Payroll employees join the company pension scheme where they work.
- The payroll company arranges its own pension scheme. This must meet certain conditions (in Dutch).
Dismissal of payroll employees
Payroll employees have the same protections against dissmissal (in Dutch) as employees with a fixed-term or permanent contract. When the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) or judge considers a proposal to dismiss a payroll employee, they look at the situation at the company where the employee is working. The cancellation of a payroll construction between the company and the payroll company is not grounds for dismissal.
Self-employed professionals and payrolling
Are you a self-employed professional and do you work through a payroll company? You are not their employee. The payroll company takes care of your invoices, salary administration and medical insurances, incapacity for work and unemployment. You arrange your assignments yourself. You will no longer be entitled to private business ownership allowance and VAT deduction.