The general response to your indication you would like to hire an employee is most of the time a negative response. All the issues you can have, true or not true, are brought to your attention with a strong recommendation not to start this process.
When you take the opportunity to learn from successful entrepreneurs, you will read in the articles about them that they could not have achieved their current position without a staff. You can do so much but you cannot be talented in every aspect of entrepreneurship. Hence successful entrepreneurs hired employees with better knowledge about a subject then they have, which supports the success. And if a lot of work needs to be done, you can simply not do it alone.
Besides the success you would like to achieve, you might want to go on holiday or be ill a few days per year and still guarantee continuance to your clients. Employ a staff.
First step: Contact a labour lawyer
You contact a labour lawyer and have yourself informed. On the internet you can find plenty of free employment contracts and free information about rules and regulations. Please do read them, take this information in, it will help you paint the picture, but you cannot determine whether this is up to date information or an up to date contract. Here the labour lawyer can assist. You need to spend some money on the meeting, but it can save you considerable over time.
Second step: Find an employee
My experience learned me that this is a process that matures over time. You might not have a full time job to offer now and or the budget for the best employee. Most of the time you then start with part-timers, not too expensive. Over time you learn not only to be busy yourself, but create work for your employees. The situation you are busy and your employees are sitting on their hands is the wrong way around. Over time you have learned to cope with this and then you can offer a genuine job to a full time employee.
Third step: Salary implications
The employee will either have a salary demand or requests you to make them an offer. How you handle this is up to you, but offering less then is requested results in demotivation.
The salary is one aspect, but on top of the salary the employer is due certain employers costs. Before you agree with the salary amount, you contact your tax advisor or payroll processor to make a mock calculation of the costs. On top of the gross salary are disability social insurances, unemployment and the healthcare insurance.
You can show the employee before he or she starts what is the outcome of the gross salary on their bank account. This can sometimes be a disappointing surprise and then the employee starts to become a creative wage tax expert apparently. Rather firm is stated that certain costs are tax free, or should be taxed at a different tax rate. Please note all the aspects mentioned and walk them by with you tax advisor. The Dutch tax office tries to simplify the system, which implies most tax free reimbursements no longer exist or have never existed.
Wage tax aspects
However, some tax advantages do exist. The most important one for expats is the so called 30% ruling. You can read plenty about this ruling on my blog. But besides the 30% ruling you could benefit from the WBSO discount. A wage tax discount that is granted to companies creating new products. An application needs to be made, but if you join a 30% ruling with a WBSO discount, your employers costs will reduce considerably.
Fourth step: illness of the employee and termination
If an employee becomes ill, you cannot terminate the employment. You need to continue paying the employee for the next two years. This is a burden and we recommend to take out an insurance for this type of risks. With this type of insurance it is like with any other insurance, the premium is less when you have not had an ill employee yet. The insurance will cover the costs of the ill employee, so you can spend money on a replacement employee.
Termination of an employment is a little complex and even though the Government started a campaign to make it less complex, it has become more complex. Your labour lawyer will have given you instructions what to do now already, when everybody is working perfectly, those instructions you need to start immediately to build a file.
Conclusion
Employing a staff does involves investigation from your site. You need to understand what you are getting into. Not only the employee has obligations, so has the employer. But if you have yourself well informed, you took advise from the correct persons and you show you are a good employer, you will find having employees is a relief.
Orange Tax Services
We process payrolls, we apply for 30% rulings, we work with the best labour lawyers and we have access to a solid illness insurance company. This we have done for at least 10 years now, hence the experience to process your payroll is available. From the language used in this article you might understand we focus on the non Dutch clients with employees in the Netherlands, as we understand that for these clients all is new and more time is involved to get the process starting.
If you are interested in our services and fees, please contact us.
