Establishing payroll in the Netherlands demands a total understanding of the employment laws and many levels of taxation regulations. The authorities strictly apply fines and sanctions for non-compliance with the legal aspects of payroll, taxation, and employment.
It is best to ‘play safe’ and outsourcing payroll services in the Netherlands will deal with the following:
- Registering with the tax authorities through the Dutch Tax and Customs Administration (Belastingdienst).
- Registering with the Social Security Bank (SVB) which coordinates the social insurance systems – national insurance for individuals legally living in the Netherlands and employee insurance for those working in the country.
- Registering with the Employee Insurance Agency (UWV), which operates under the Ministry of Social Affairs and Employment (SZW) and handles benefits covering such as unemployment and sickness.
- Obtaining the citizen service number (BSN) for all employees so they can interact and liaise with national, regional, and municipal authorities.
- Negotiating the 30% tax exemption for skilled expats (where applicable)
- Reconciling national and any local taxes to assess for refunds or extra payments
- Applying for employees’ special expatriation status (if applicable)
- Calculating employees’ monthly salary and sending their pay slips
- Researching for any available tax incentives
- Submitting employees’ and employers’ wage tax returns and social insurance forms
- Creating and submitting your company’s annual accounts and year-end statements
- Creating payment schedules for salaries and national insurance contributions
- Ensuring accurate personal income tax returns are filed for you and your employees, where required