Hiring your first employee is a milestone. It’s also the moment the Dutch Tax Administration (Belastingdienst) starts treating you as an employer. From then on, you withhold payroll taxes from the salary and pay them over every month. Here’s what needs to be in place before the first payslip goes out, and what an employee really costs you.
What do you need to sort out before their first day?
- Register as an employer with the Belastingdienst. You do this online, no later than the day your first employee starts. You’ll then receive a payroll tax number and a letter setting out your filing periods and payment deadlines.
- Verify your employee’s identity. Check their original ID document and keep a copy in your payroll records.
- Have your employee fill in and sign a wage tax declaration (officially: opgaaf gegevens voor de loonheffingen). Among other things, this tells you whether to apply the payroll tax credit (loonheffingskorting).
- Draw up a written employment contract covering salary, hours, probation period and any holiday pay arrangements.
- Check whether a cao (collective labour agreement) or a mandatory pension fund applies to you. This depends on your sector, and it partly determines what you have to pay.
- Arrange an occupational health service or company doctor. Every employer in the Netherlands must have this in place, even with just one employee.
What exactly are payroll taxes?
Payroll taxes (loonheffingen) is the umbrella term for the tax and contributions due on wages:
| Component | Who pays it? |
|---|---|
| Wage tax and national insurance contributions | Withheld from your employee’s gross salary |
| Employee insurance contributions (WW unemployment, WIA disability) | Paid by you as the employer, on top of the gross salary |
| Income-related contribution under the Health Insurance Act (Zvw) | Paid by you as the employer, on top of the gross salary |
You withhold the employee’s share from the gross salary and pay it to the Belastingdienst together with the employer’s share. Your employee receives the net salary.
What does an employee really cost?
More than their gross salary. On top of the employer contributions, you pay at least 8% holiday pay and possibly pension contributions, and you carry the risk if they fall ill. All in, employer costs come to roughly twenty to thirty per cent on top of the gross salary.
Two things that often catch startups out:
- The WW contribution depends on the contract. For a permanent contract you pay the low rate; for a fixed-term or on-call contract, the high rate. The difference is five percentage points of salary.
- You keep paying when someone is off sick. In the Netherlands, a sick employee is entitled to up to two years of continued pay, at no less than 70% of their salary. For a small startup that can add up fast; sickness absence insurance covers the risk.
Factor in these costs before you hire anyone. Every extra salary has a direct effect on your runway.
What do you need to do every month?
You prepare a payslip, pay the net salary and file a payroll tax return with the Belastingdienst. Both the return and the payment are due within a month of the end of the period. Pass on changes such as a pay rise, a new starter or a leaver before the return is filed; correcting them afterwards takes far more time.
You also need to keep your payroll records for seven years: payslips, wage tax declarations, copies of ID documents and employment contracts.
Employee or freelancer?
If you hire someone as a zzp’er (self-employed freelancer), you don’t file a payroll tax return for them. But if in practice they work like an employee, with fixed hours, under your direction and without any business risk of their own, the Belastingdienst may still treat the arrangement as employment. You would then have to pay payroll taxes retroactively. Since 2025 the Belastingdienst has been actively enforcing this again, so if in doubt, have it checked beforehand.
How does your own salary work as a DGA?
If you have a BV (private limited company), then as a DGA (director-major shareholder) you’re an employee of your own BV too. The customary salary rule (gebruikelijkloonregeling) applies: in 2026 your salary must be at least €58,000, or more if that’s the norm for comparable work. Payroll for your own salary works exactly as it does for any other employee. Read more about choosing between a BV or sole proprietorship.
How do you keep it hassle-free?
Let us know before you hire someone, and we’ll handle your employer registration, the payslips and the monthly payroll tax return. At Matching Numbers, payroll always costs €20 per employee per month, on top of your package.
Sources
- Belastingdienst, Hiring staff and registering as an employer (in Dutch)
- Belastingdienst, Filing a payroll tax return (in Dutch)
— Elaudt
