General

Registration for payroll tax only

In case a company doesn’t have a representative or an office space in the Netherlands, the company can register in the Netherlands for payroll tax purposes only. For all employees working in the Netherlands the company will be liable for payroll tax and employers’ social security contributions. If the employee has a so called E 101 statement, social security contributions can be paid in the home country.

Since the employer is liable for payment of the payroll tax and contributions, it is not recommendable to have the employees make the payments.

Employment in the Netherlands

If a company is registered in the Netherlands and has employees, the company is obliged to withhold payroll tax on their wages. Furthermore, the company is obliged to pay employers’ contributions for social security to the tax authorities. The contributions consist of unemployment- and disability benefits and health care premiums. The employers’ contributions depend on the employee’s salary and will amount to approx € 7,000 per annum per employee.

Obligations employer

If the company doesn’t have a permanent establishment in the Netherlands, nor have they registered themselves voluntary for payroll tax purposes, the company is not obliged to withhold Dutch payroll tax on your salary.

However, if the employee is living in the Netherlands and is liable to income tax in the Netherlands, this means that the employee is entitled to Dutch social security benefits. The employer is obliged to pay employers’ contributions for social security. The company should register for employers’ contributions with the tax authorities. Without this registration, the tax authorities can impose a fine that can go up to 50% of the outstanding amount and levy the contributions retroactively.

Registration for payroll tax

In case the company registers for payroll tax, there will not be any consequences for them, other than to pay the payroll tax and employers’ contributions on time. For their employee however, it will make a difference, since instead of having to pay his tax obligation in a lump sum, it will then be taken out of his salary on a monthly basis.

The registration of the company, as well as running a Dutch payroll, can be outsourced to Finsens. By outsourcing the payroll, the employee will receive a salary slip on a monthly basis and the employer will be informed how much net salary the employee is entitled to and how much payroll tax and contributions have to be paid and before which date.