Payroll in the Netherlands and labor law are going hand in hand. How does that work out, which law is applicable?
Payroll in the Netherlands and labor law
Payroll in the Netherlands can be part of your service needs, if you are an employer situated abroad. You do understand tax treaties dictate to tax income from employment in the country where the employment is done. The exception to this rule is the position of the director of the company. For that person most tax treaties have a separate article.
183-day-rule
The famous 183 day rule makes Dutch labor law is not applicable, if the 183 day rule is correctly executed. The latter is often the problem. Counting the days is the easy part. But this rule has three conditions to be met. And if all are met, indeed the income earned in the Netherlands for a period less than 183 days is not taxed in the Netherlands.
A result of that is, that the labor law of the home country rules, as the period worked in the Netherlands is disregarded as such.
Labor law and labor lawyers
We always recommend to connect to a labor lawyer, being the employer. Working with Boontje Labour lawyers, highly recommended.
We are tax advisors, so we know about tax. Labour law is a subject we come across, and within limits we can explain the rules. The moment it becomes specific or challenging, we are the first to refer you to a labor lawyer.
Working with Wouter Hes of Boontje Labour Lawyers learned me a lot over the years. The most recent fact is that you can employ an employee working for you in the Netherlands under your home country labor rules. The condition is that should the Dutch rules offer the employee an advantage over the home country rules, Dutch rules win.
Setting up Dutch payroll and labor law
You might have learned that the rules in the Netherlands are in favor of the employee. This should not stop you, the employer, from getting involved in a Dutch payroll. It does imply, as good behavior of a company, to learn more about the Dutch rules. To have someone at your side assist you with the Dutch rules and regulations.
Many companies in the Netherlands employee a staff, why would you not?
That said, most companies also take out an insurance. This insurance covers a period during which you are to continue the payment of salaries, while concerning employees are ill. That makes the risk smaller.
Most employers also take up a subscription with what we call Arbo related companies. Those companies can monitor for the employer how the well-being is of the employees in case of illness. And these companies can help the employer with complying of the formalities to the Dutch Government in case of illness.
Tax is exciting
We think tax is exciting. Runnig a payroll for you in the Netherlands gets us excited indeed. We will be pleased to introduce you to Boontje labour lawyers. Feel free to connect to our payroll team at payroll@orangetax.nl
