Setting up a Dutch payroll company

Permits payroll company in The Netherlands

On the basis of the law, a so-called Waadi (Labour Allocation by intermediaries Act) registration is mandatory, which means that the provision of the employees must be registered in the Commercial Register. This requirement applies both to companies that provide labour on a commercial basis (such as a payroll company) and to companies that provide non-commercial labour.

When do I provide employees?

In order to determine whether you provide employees as defined in the law, the following three elements are important:
– There is an enterprise that makes provides employees to another company;
– The enterprise providing the employees are reimbursed for this by the enterprise to which the employees have been provided;
– The provided employees operate under the supervision and direction of the enterprise to which they have been provided.
If the above requirements are met, there is a provision of employees and it is mandatory to register this activity in the Commercial Register.

Open a G-account

In addition, having a so-called G-account is mandatory. A G-account is a special bank account, where the borrower deposits the money for the expected costs of payroll taxes and/or VAT. The borrower can then limit his risk to the amount he deposits into the G account. This bank account can only be used to pay payroll taxes and VAT to the Tax Office.

Frequent customer demands
SNA-Hallmark

Labour contractors will often ask if you as a payroll company have a so-called SNA label. The Foundation for Labour Standards (SNA in Dutch) issues this mark to payroll companies that provide employees and meet the conditions. The label is specifically designed to prevent fraud and to reduce the risks for both borrowers and contractors. The SNA checks twice a year, but if they have a valid reason, this can be increased to four checks a year.

Safety & Certification

In order to ensure the safety of the provided employees, clients will often require you to have a VCA certificate. This certificate gives an indication that the payroll company that provides the employees considers it important that their employees can carry out their work safely and healthily and want to invest in it on a structural basis. Once you have obtained a VCA certificate, it is valid for three years, then a recertification must take place if you want to have another VCA certificate. This certification is particularly relevant for workers active in construction or maintenance work on construction sites.
Both the SNA mark and the VCA certificate are not required to set up a payroll company. On the other hand, it is advisable to have both, as many of your (potential) customers will not want to work with you otherwise.

Immigration natural persons

In addition to meeting the legal requirements of the payroll company as a legal entity, it may also be possible that you as a natural person have to meet some legal requirements, should you intend to run your company from the Netherlands. For EU citizens, this usually involves a few complications, due to the free movement of persons. For residents of countries outside the EU, a residence permit must be applied for through the Immigration and Naturalisation Service (IND). PLEASE NOTE: we do not make any applications from CompanyNL to or through the IND that relate to a stay, we can only put you in contact with a migration lawyer.
It is also important that there is a scarcity of people with this specific knowledge when recruiting migrants from outside the EU for their specific knowledge. It is therefore extremely important that it is determined in advance that there is a local scarcity with regard to workers with the required specific knowledge and that the hired labour migrant actually has this knowledge.

Changing legislation

In 2020, new legislation has come into force to reduce the gap between flexible working and permanent work. The government hopes to achieve this by taking measures that should make a fixed contract less ‘fixed’ and to make flexible working less flexible. Some reasons for this are the calculation of (financial) risks by employees instead of looking at the nature of the work and making a fixed contract more attractive. These measures will also aim to make flexible working less attractive so that fixed contracts are more likely to be chosen.
Some examples of measures arising from the Labour Market in Balance Act (Wet DBA) are facilitating the dismissal of employees and expanding the rights of payroll workers. Payroll workers were subject to the same, lighter rules as temporary workers, but have almost the same status as their own employees since 2020. Payrollers will have to be paid more, which makes this form of employment contracts less attractive. Laying off workers will be made less complicated by the introduction of the so-called cumulation ground. This means that one of the eight redundancies that apply under current law no longer has to be met, but a cumulation of circumstances – such as a disturbed relationship with and the dysfunction of the employee – can be sufficient grounds for dismissal.

Good advice

Before setting up a payroll company, it is wise to seek tax advice from an expert. Good tax advice can save you a lot of costs. Therefore, always contact a tax advisor before setting up a business.