Starting a part-time business alongside a permanent job

Published by:
Netherlands Chamber of Commerce, KVK
Netherlands Chamber of Commerce, KVK
Netherlands Tax Administration, Belastingdienst
Netherlands Tax Administration, Belastingdienst

You want to start a part-time business alongside your regular job. Before you start, you need to arrange matters with your employer. And you must register your business with the Netherlands Chamber of Commerce KVK. This step-by-step plan tells you what you need to know to start a part-time business alongside a permanent job.

1. Check your contract

Read your employment contract and Collective Labour Agreement (CAO) carefully. They may contain agreements that could affect your business plans. For example, that you are not allowed to have any other paid work besides your job with your employer. Also check whether you have a non-compete or non-solicitation clause. If so, you are not allowed to compete with your employer. For example, by selling the same products as your employer’s company. You are also not allowed to contact your employer's customers.

2. Discuss your plans with your employer

You do not have to discuss your business plans with your employer. Unless it is stated in your employment contract. For example, that you are not allowed to carry out paid jobs (side activities) in addition to your work. However, it may be wise to discuss your plans with your employer to avoid (legal) conflicts. Especially if your plans include similarities with your employer's activities, region, or target group. Put the agreements you make together in writing.

3. Consider whether you want to work fewer hours

You can ask your employer in writing if you can work fewer hours (in Dutch). This is only possible if the company has at least 10 employees and you have been employed for at least 6 months. Request a reduction in working hours no later than 2 months before the desired starting date.

Does your company have fewer than 10 employees? Then your employer may have their own scheme. Your employer may refuse your request. but only with a good reason. For example, if there is no one who can take over the work. If your employer refuses your request, you must wait 1 year before you submit a new request.

Has your employer not responded to your request 1 month before the effective date? Then you may start working the number of hours requested.

4. Register your company with KVK

You must register your company in the KVK Business Register. First choose a legal structure. The legal form determines your liability, which taxes you must pay, and whether you receive tax benefits. Use the tool Which legal structure suits your company? to help you decide.

KVK passes on your details to the Netherlands Tax Administration (Belastingdienst). You do not have to register your company separately with them. If the Tax Administration considers you an entrepreneur for tax purposes, you will receive a VAT tax number and your VAT identification number (VAT ID).

5. Pay income tax

You pay income tax on your income from your employer and on the profits from your business. If the Tax Administration considers you an entrepreneur for income tax purposes, you can make use of deductions and tax schemes. Do you not meet the Tax Administration's conditions for entrepreneurship? Then you must file an income tax return as a private individual (in Dutch). You are then not entitled to deductions and tax schemes. You declare income from your business as 'income from other work' (inkomsten overig werk). You must file a tax return before 1 May each year.

Check whether you are entitled to entrepreneur deduction, KOR, or SME profit exemption

If you start a business alongside your job, it is unlikely you will be entitled to the entrepreneur allowance. This is because you must work a minimum of 1,225 hours per year for your business to qualify. You may, however, be entitled to the SME profit exemption. This is a deduction from your profits. Or you may be able to take part in the Small businesses scheme (KOR). You will then pay less or no VAT.

6. Consider extra insurance

When you start a business, it may be wise to take out insurance. By doing so, you cover yourself against business risks.

Important insurances are:

The Sickness Benefits Act does not cover entrepreneurs. If you are unable to work due to illness or accident, you will therefore only get paid for the hours you work for your employer. For the hours you work for your own business, you can take out disability insurance (aov). There are also alternatives. Such as donation circles and crowdsurance. You can take out disability insurance with the Employee Insurance Agency (UWV).

If you start working fewer hours as an employee, this will affect any unemployment benefits you may be entitled to. If you become unemployed, the UWV determines the amount of your benefit (in Dutch) based on the salary you received for the previous 12 months.

Clients may require you to have business liability insurance. Do you cause damage while you are working? Insurers usually ask for business liability insurance, even if your business is part-time alongside your job. Private liability insurance does not cover your business activities.

Some professions require professional indemnity insurance (BAV). For example, if you start out as a financial adviser.

7. Accruing a pension

Are you going to work fewer hours for your employer? Then you will build up less pension. You have to arrange your (additional) pension yourself.

9. Prevent false self-employment

You must prevent false self-employment. Check with your client whether you will do an assignment as an employee or as a self-employed person.

Statistics: part-time business alongside permanent job

The graph shows the number of employees who are self-employed in addition to their permanent job on a quarterly basis.