Payroll system in the Netherlands

12.09.2025

Payroll is a system created to help find employees for companies that do not have the status of a recognized sponsor or for other reasons cannot hire a foreigner. In this case, the payroll company officially becomes the employer (concludes a contract, pays salaries and taxes), but in fact the employee works for another organization – payroll company’s client. Thus, in this case, two levels of contracts are involved:

1. Between payroll company and a client (foreign employer). It is important to note that the employer must be a foreign legal entity, and the payroll company is a Netherland company that has a special license to employ foreign citizens;
2. Foreign employer and an individual (employee). It is important to note that the employee cannot hold the position of founder or CEO in the foreign employer company, since the payroll scheme excludes such direct dependence. In practice, there are cases when the employee was the ultimate beneficiary of a complex holding, and the foreign employer was a company from the group.

This system allows to legally obtain a residence permit (and subsequently permanent residence or citizenship) in the Netherlands.

Who and how can use this program, and what documents are needed for this?

Basic requirements

1. A candidate must be a highly qualified specialist (kennismigrant). At the same time, there is no list of professions determining a highly qualified specialist in the Netherlands (unlike Canada or Australia), and any profession can be suitable, subject to compliance with the other requirements. In addition, the length of service in the chosen field is assessed, as well as the correspondence of the position and education or work experience;
2. The candidate, being outside the Netherlands, must enter into an agreement with a payroll company;
3. The salary amount in the contract must correspond to the minimum salary level established for the following category:
   • for the persons of 30 years and older - 5,688 euros per month (excluding hidden bonuses, vacation allowance, etc.);
   • for the persons under 30 years old - 4,171 euros per month;
   • for the graduates of Dutch universities - 2,989 euros per month.

At the same time, requirements are also imposed on the payroll company. It must be a recognized sponsor, namely:

• registered in the trade register (KvK);
• be financially stable;
• be responsible and comply with industry standards

List of required documents

• passport (copy of the page with data and signature);
• employment contract and job description;
• resume (CV).

Procedure for obtaining a residence permit and terms

The payroll company submits all documents by itself.

• The payroll company submits an application to the Immigration Service (IND). The application is processed within 2-4 weeks, provided that a full set of documents was handled;
• Company obtains a residence permit card in the municipality where the individual is registered.

Costs

The approximate cost of such a scheme in the most “expensive” case (if an employee is over 30 years old) will be 6,100 euros per month (10,000 (payroll company services) - 5,688 (minimum salary of a specialist) x 0.7 (we subtract a 30% tax from the rate)). Plus, payment for one-time payroll company services.

It is worth noting that the payroll company expenses, taxes/social contributions and the monthly payroll company commission are paid by the foreign employer. The payroll company, in turn, pays the employee a salary and also pays taxes/social contributions. And in just 5-7 years, permanent residence (or, if a person prefers, Netherland citizenship) will cost approximately from 360,000 to 510,000 euros (provided that a person is over 30 years old).

This scheme is completely legal and has been tested in practice many times.

Features

If desired, a person can take advantage of the tax benefit for expats - 30% non-taxable income (30% ruling). To do this, the candidate must:

• Be hired from abroad, that is, live further than 150 kilometers from the Dutch border for 16 months over the past 2 years;
• Be a highly qualified worker with a salary above the established thresholds.

To receive this benefit, a person must submit a respective application within 4 months after starting work. The processing time is 8-12 weeks.

After 5 years, employee can apply for permanent residence or even naturalization. The procedure for obtaining a passport itself will take for about a year.

Advantages

• Allows a person to obtain a residence permit in the Netherlands simultaneously with employment and a work permit;
• This is a reliable option for acquiring permanent residence or citizenship of an European country in the future;
• No formal requirements for professions for obtaining a residence permit under this program;
• All paperwork is handled by a payroll company;
• All costs for obtaining a residence permit and a work permit are also borne by the employer (with the exception indicated earlier);
• Employment under the laws of the Netherlands

Authors: Aleksei Molchanov, Yaroslavna Zadesenskaya

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