How to manage a remote workforce in the Netherlands: legal and HR best practices

Remote work has moved from a trend to a global standard. Across Europe and beyond, companies embrace distributed teams to access top talent, increase flexibility, and reduce overhead. The Netherlands stands out among European countries as one of the most remote-friendly destinations, thanks to its digital infrastructure, high English proficiency, and strong professional workforce.

However, managing remote employees in the Netherlands isn’t as simple as signing a contract and sending a laptop. Whether local or international, employers must comply with Dutch labour laws, offer statutory employee benefits, handle tax and social security contributions, and align with specific HR practices that reflect legal expectations and cultural norms.

This guide’ll cover what businesses need to know to effectively and legally manage a remote workforce in the Netherlands. If you don’t have a Dutch entity, we’ll also show you how a Dutch Employer of Record can help you hire, pay, and manage Dutch remote employees compliantly.

The Netherlands: a remote work-ready destination

The Netherlands is a top choice for remote workers and international companies alike. With some of the best broadband coverage in Europe, a bilingual workforce, and a business-friendly regulatory environment, it offers everything remote teams need to succeed.

For businesses, the opportunity is clear. But to make the most of it, you must align with Dutch employment regulations, understand your obligations as an employer, and adopt people-first HR practices that reflect the country’s culture and legal framework.

Legal obligations when managing a Dutch remote workforce

Even if your business doesn’t have a legal entity in the Netherlands, hiring someone based there still triggers legal obligations. Dutch authorities expect companies to comply with national labour laws, especially when the worker operates under the employer’s direction and works primarily from the Netherlands.

Under the Dutch Civil Code, every employee must have a written employment agreement that defines the scope of work, salary, working hours, holiday entitlement, notice periods, and other key terms. This contract must also comply with mandatory Dutch labour standards and, where relevant, collective labour agreements (CAOs).

Employees vs. contractors

Incorrectly classifying an employee as a contractor is a significant compliance risk. In the Netherlands, the relationship, not the contract, determines employment status. If your remote worker only works for you, follows a fixed schedule, and uses your tools or systems, they will likely be seen as an employee under Dutch law.

Many sectors in the Netherlands are governed by CAOs (collectieve arbeidsovereenkomsten), which define minimum terms of employment, such as wages, working hours, leave entitlements, and bonuses. Employers must check whether a relevant CAO applies to their remote employees, even if they are not headquartered in the Netherlands.

If hiring directly, businesses may also be required to register as a recognised employer with the Dutch authorities, depending on the number and nature of the employees.

Payroll, taxes, and social security

Once you hire a Dutch employee, your business becomes responsible for handling a range of tax and social contributions.

Employers must withhold and remit Loonheffing (wage tax), which includes income tax and social insurance contributions. In addition, companies are responsible for employer-paid contributions for employee insurance schemes, including unemployment (WW), disability (WIA), and sickness (ZW).

While not legally required for all employees, pension contributions are often mandated through CAOs. In most cases, employers contribute between 10% and 20% of an employee’s pensionable salary to a pension fund.

Employees in the Netherlands are entitled to holiday pay (vakantiegeld)—an additional 8% of their gross annual salary, typically paid in May or June. This is a mandatory benefit and must be accounted for in payroll calculations.

All residents, including remote workers, must take out basic health insurance from a Dutch insurer. Employers don’t pay for this directly, but must ensure correct payroll deductions and inform employees of their responsibilities. Social security contributions made through payroll fund broader health and welfare benefits.

Remote work policies and employment conditions

Employers must create a clear and legally compliant remote work policy when managing Dutch employees from abroad. This policy should outline communication, performance, working hours, equipment, and reimbursement expectations.

The employer must comply with the Working Conditions Act (Arbowet) even for remote workers. This includes ensuring the employee has a safe, ergonomic home working environment and access to occupational health support.

Dutch employers are generally expected to provide or reimburse necessary home office equipment, including desks, chairs, and technology. Internet and utility cost contributions are not mandatory, but are common in practice.

Standard working hours in the Netherlands are 36 to 40 hours per week. Any overtime arrangements must comply with CAOs and should be clearly defined in the contract. Employee monitoring is allowed under strict GDPR rules, and employers must inform workers in writing about any tracking or data collection.

Data privacy is taken seriously in the Netherlands. Employers managing remote workers must follow GDPR regulations, including secure handling of personal data, clear privacy notices, and lawful grounds for any data processing or monitoring.

HR best practices for managing a remote team in the Netherlands

Complying with Dutch law is the baseline. However, to build a productive and happy remote team, you must adopt HR strategies that align with local work culture.

• Communication and management: Dutch workers value clarity, independence, and efficiency. Managers should encourage regular check-ins and transparent communication, while trusting employees to work autonomously.
• Cultural considerations: The Dutch are known for direct communication and a strong work-life balance. Respect for personal time and clear expectations around availability will go a long way in building trust and loyalty.
• Mental health and wellbeing: Remote workers in the Netherlands benefit from employers that invest in mental health resources, virtual team-building, and access to health and safety support. These programmes are good practices and help reduce absenteeism and improve retention.

How a Dutch Employer of Record can help

For companies without a legal presence in the Netherlands, an Employer of Record (EOR) offers a straightforward way to hire and manage Dutch talent legally and efficiently.

A Dutch EOR is a third-party provider that acts as the legal employer of your remote workers. Your business continues to manage the person’s day-to-day tasks, but the EOR handles everything related to local compliance and employment.

What the EOR takes care of:

• Drafting Dutch-compliant contracts based on local law and CAO terms
• Payroll processing, including taxes, holiday allowance, and bonuses
• Social security and pension contributions
• Leave management, including sick leave and vacation tracking
• Ongoing HR support for employment queries or updates

For example, a creative agency in Toronto wanted to hire remote graphic designers in the Netherlands to serve European clients, but had no local entity or knowledge of Dutch employment law.

By partnering with a Dutch Employer of Record, the agency quickly onboarded designers with compliant contracts, payroll, and social security contributions handled on their behalf. The EOR ensured all mandatory benefits, like holiday pay and statutory leave, were provided, allowing the agency to focus on projects while staying fully compliant without setting up a local office.

For international companies, an EOR offers:

• Speed to hire without setting up a Dutch BV
• Full legal compliance with minimal internal overhead
• Access to Dutch talent without permanent infrastructure
• Reduced cost and risk compared to launching an entire legal entity

Manage a remote team with ease

Managing a remote workforce in the Netherlands involves more than just hiring a qualified professional. It means aligning with Dutch labour law, understanding payroll and benefit requirements, and adopting remote-friendly HR practices supporting compliance and employee satisfaction.

If your company is looking to tap into Dutch talent but isn’t ready to open a local entity, a Dutch Employer of Record offers the best of both worlds – legal compliance and operational simplicity.

Want to hire Dutch remote talent without opening an entity? Contact us to explore how our Employer of Record in the Netherlands can help.