Hiring in the Netherlands comes with a well-defined set of statutory obligations around leave and employee benefits. The Dutch system is generous by design, and getting the details wrong can be costly, both financially and in terms of employee relations. This guide covers everything foreign employers and HR teams need to know to stay compliant when managing Dutch employees.
Annual leave and holiday allowance
The Netherlands has two distinct leave-related obligations that often catch foreign employers off guard: statutory annual leave and the mandatory holiday allowance (vakantiegeld). Both are legal requirements, not optional extras.
Statutory annual leave
Dutch employees are entitled to a minimum of four times their contracted weekly hours in paid leave per year. For a full-time employee working a standard 40-hour, five-day week, that’s a minimum of 20 days per year.
There’s an important rule on expiry: statutory minimum leave must be used within six months of the end of the calendar year in which it was accrued. Leave accrued in 2025, for example, expires on 1 July 2026. Non-statutory leave (anything above the minimum) has a five-year expiry window. You can’t buy out unused leave with a cash payment while employment continues; the only exception is on termination, when outstanding leave must be paid out.
Holiday allowance (vakantiegeld)
In addition to leave days, employers must pay a holiday allowance of at least 8% of an employee’s gross annual salary. This accrues monthly over the period from June to May and is typically paid as a lump sum in May or June each year. If an employee leaves mid-year, any accrued but unpaid holiday allowance must be settled on their final payslip.
Public holidays
The Netherlands recognises 8 to 11 public holidays per year, including New Year’s Day, Good Friday, Easter Monday, King’s Day (27 April), Liberation Day (5 May), Ascension Day, Whit Monday, Christmas Day, and Boxing Day.
One nuance worth noting: Liberation Day is only a fully paid public holiday in years divisible by five for many employees, though a collective labour agreement (CAO) may state otherwise. Employers aren’t legally required to grant paid public holidays, but it’s standard practice across virtually all sectors. Check the applicable CAO for your industry, as it may impose additional obligations.
Sick leave
Dutch sick leave rules place significant obligations on employers. If an employee is unable to work due to illness or disability, you’re required to continue paying a minimum of 70% of their last-earned salary for up to 104 weeks (two full years). This is employer-funded: the state doesn’t cover it during this period.
Alongside the pay obligation, you’re required to have a re-integration plan in place. This means actively working with the employee and, in many cases, an occupational health service (arbo) to support their return to work. Failure to meet re-integration obligations can result in the sick leave period being extended by the UWV (the Employee Insurance Agency).
Importantly, you can’t dismiss an employee during the first two years of illness. The Dutch dismissal protection during sickness is one of the strongest in Europe, so it’s worth factoring this into workforce planning from the outset.
Parental and family leave
The Netherlands offers several categories of leave for new parents and employees with caregiving responsibilities. Each has different pay rules and funding sources.
Maternity leave
Pregnant employees are entitled to 16 weeks of maternity leave (zwangerschapsverlof and bevallingsverlof combined). The first six weeks are taken before the expected due date, with a minimum of ten weeks after birth. Pay is set at 100% of the employee’s daily wage, capped at the statutory daily maximum. This is funded by the UWV, not the employer directly. You advance the payments and then claim reimbursement from the UWV.
Paternity and partner leave
Immediately after the birth of a child, a partner is entitled to one full week of paid leave (geboorteverlof). You pay this at 100% of salary. Beyond that initial week, partners can take an additional five weeks of leave (aanvullend geboorteverlof) within the first six months of the child’s birth. During this additional leave, the UWV pays 70% of the employee’s daily wage. You’re not legally required to top up the remaining 30%, though some employers choose to as a benefit.
Parental leave
Each parent is entitled to 26 weeks of parental leave until the child turns eight. The first nine weeks, when taken during the child’s first year of life, are partially paid: the UWV covers 70% of the employee’s daily wage. The remaining 17 weeks are unpaid. Parental leave can be taken part-time, spread over a longer period, which gives both employers and employees some flexibility in how it’s arranged.
Care leave
Beyond parental leave, Dutch employees have the right to take time away from work to care for sick family members.
Emergency leave (calamiteitenverlof)
Employees are entitled to one fully paid day for urgent, unforeseen personal circumstances, such as a burst pipe, a sudden serious illness of a family member, or a comparable emergency. This is short-term and immediate in nature.
Short-term care leave
For situations that require ongoing attention rather than just one day, employees can take up to twice their weekly working hours in short-term care leave per year. For a full-time employee, that’s up to 10 days. Pay during this leave is 70% of salary. It applies to the care of a sick spouse, child, or parent.
Long-term care leave
Where a close family member has a serious illness, employees can take up to six times their weekly working hours per year in long-term care leave (up to 30 days for full-time staff). This leave is unpaid.
Additional benefits
13Th month and year-end bonuses
There’s no statutory requirement to pay a 13th-month salary or year-end bonus in the Netherlands. However, many employers do so through a CAO or individual employment contracts. If you offer this benefit, you must apply it equally across all employees in the same category. Consistency matters — unequal application can create legal exposure.
Health insurance
Dutch employees are individually responsible for purchasing mandatory basic health insurance (zorgverzekering) through a private insurer. As an employer, you contribute indirectly via the Zvw (Health Insurance Act) income-related levy, currently set at 6.10% of employee wages, paid to the government fund. Many employers also offer additional private health insurance as a supplementary benefit to attract and retain talent, though this isn’t required by law.
Working with an Employer of Record in the netherlands
If you’re hiring in the Netherlands without a local legal entity, working with an Employer of Record (EOR) is often the most practical route. An EOR takes on the role of the legal employer in the Netherlands, handling payroll, statutory benefits, sick leave administration, UWV filings, and compliance with Dutch labour law on your behalf. When evaluating your options, look for EOR services that have direct experience with Dutch employment law, including the re-integration obligations that come with long-term sick leave.
FAQ
Is the 8% holiday allowance on top of the regular salary?
Yes. The vakantiegeld is paid in addition to the employee’s regular monthly salary. It accrues throughout the year and is typically paid as a separate lump sum in May or June. It’s calculated on gross annual salary, so it includes base pay but excludes items like expense reimbursements.
Do we have to pay employees during public holidays?
There’s no statutory requirement to grant paid public holidays in the Netherlands, but it’s overwhelmingly standard practice. More importantly, if a collective labour agreement (CAO) applies to your business or sector, it likely requires paid public holidays. Always check the applicable CAO before setting your leave policy.
Can we require employees to use their annual leave before it expires?
Yes, you can designate specific periods as compulsory leave (for example, a company-wide shutdown over the Christmas period), provided you give reasonable notice. For statutory leave expiring at the six-month mark, you should actively encourage employees to use it and document that you’ve done so — courts have held employers responsible for failing to notify employees of the expiry risk.
What happens if a sick employee doesn’t co-operate with re-integration?
If an employee refuses to engage with re-integration without a reasonable excuse, you can, after following the correct procedure, suspend their salary. The key steps involve issuing a formal written warning and giving the employee a clear opportunity to comply. If they still don’t engage, salary suspension is permitted. However, the process is tightly regulated, and getting it wrong can invalidate the suspension, so taking advice from a Dutch employment lawyer or your EOR before acting is strongly recommended.
