Currently a lot of companies show ‘We are hiring’, so do we, as the Dutch economy is booming. Payroll in the Netherlands, what does that imply?
Payroll in the Netherlands
We have two types from a practical point of view.
One type is not the genuine employee, but you can earn money by subcontracting an employee at the site of another company. That is the type we cannot assist you with. The type the ABU collective labour agreement applies to. And if you have no presence in the Netherlands, we recommend you to look for an umbrella payroll company that can assist you. Such as Dutchpayrolling.
The other type is the genuine employee that is going to work for your company, not receiving instructions from another company. That is the type we can assist you with, no ABU collective labour agreement. A labour agreement can be applicable, but that depends on the type of work that is being done. It is working in shops, cleaning and that type of businesses that have an obligatory collective labour agreement. Desk jobs most of the time do not have an obligatory collective labour agreement.
If you have no presence in the Netherland, no office in the Netherlands and the employee cannot sign on your behalf, then we have a nonresident employer solution for you.
If you do have an office rented in the Netherlands, then you are having a presence in the Netherlands. Your company needs to be registered with the Chambers of Commerce, a Value Added Tax (VAT) filing obligation is issued by the Dutch tax office and corporate income tax will be due over the Dutch result.
The company also has a fiscal presence when you have no office, but the employee can sign on behalf of the company. That employee creates than the permanent establishment.
We can assist you with the payroll, and we can assist you with the VAT filing and corporate tax filing.
Alternatives for payroll that are not in fact alternatives
Often the employee is suggested to set up his or her business in the Netherlands and then invoice the foreign company instead of receiving a salary.
The definition of employment in the Netherland is that you work for a company, receive instructions and get paid. If the employee invoices instead, but only to one client and maybe some marginal number of other clients, the relation is regarded employment. Not entrepreneurship. The result for both the foreign company and the Dutch employee are not promising when the Dutch tax office makes a move.
Moreover, you make an employee an entrepreneur. Not only a value added tax administration and filing needs to be done, but also an entrepreneurs income tax return. All done, while the actual situation is employment.
We recommend not to follow this path.
Orange Tax Services
We can assist you with payroll in the Netherlands. We can assist you with your budget, or the gross to net calculations. Reporting to the Dutch tax office. We can even make the payments for you to the employee and the tax office, so you only need to make one payment to us.
Furthermore we can arrange for pension insurances, insurances to cover the costs of an ill employee and we work with one of the best labour lawyers to assist you with employment agreements and other legal assistance.
Our payroll team works on the basis of a two eye system to reduce the change for a mistake to nearly zero and the team is also scheduled in a manner that there is always someone to talk to, with the exception of the Friday. Our payroll manager is Laura Boon.
