Rules for payrolling

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 into a contract with a payroll company to handle the administrative tasks of an employer on your behalf. Payroll employees are entitled to at least the same working conditions as staff directly employed by you. 

What is payrolling? 

With payrolling (in Dutch) you recruit the payroll employees yourself, determine their salary, and have complete supervision of their work. The payroll company formally hires and employs the payroll employees you recruit. You then loan the recruited payroll employees back from the payroll company. The payroll company handles all the employers’ administrative duties, such as labour contracts, annual income statements, salary administration, and pension. 

Responsibility payroll tax payment 

A payroll company pays the payroll tax and social insurance contributions on your behalf. If the payroll company fails to do so however, the Netherlands Tax Administration (Belastingdienst) can hold you liable. 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. You can find certified companies with the SNA quality mark in the Labour Standards Register (in Dutch). 

Terms of employment 

Payrollers are entitled to at least the same terms of employment as any of your employees with a fixed-term or permanent contract. Do you want to hire someone through a temping agency or payroll company? Before they officially start working for you, you must inform the payroll company about the terms of employment for your employees. 

If you do not have any staff, the employment terms 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: 

• Your payroll employees join your company pension scheme.
• 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 dismissal as employees with a fixed-term or permanent contract (in Dutch). You cannot fire an employee without valid grounds for dismissal. The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) or a judge considers your proposal to dismiss a payroll employee. They will look at the situation at the company where the employee works. 

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 are not entitled to private business ownership allowance and VAT deduction for the work you do through a payroll company.