What does an employee cost in the Netherlands in 2026?

Start with holiday pay. Dutch law gives every employee at least 8 per cent of their gross annual salary as holiday allowance, according to the Dutch government. Only for someone earning more than three times the minimum wage can you agree in writing to pay less or none.

Then come the premiums you pay yourself as the employer. You do not deduct these from the salary. Wage tax and the national insurance contributions are deducted, so they are the employee's money and not a cost to you. For 2026 the Dutch Tax Administration lists these rates:

Unemployment premium (AWf). 2.74 per cent for a written permanent contract that is not an on-call contract, and 7.74 per cent for everything else. A fixed-term contract therefore costs five percentage points more.

Disability fund (Aof). 6.27 per cent for a small employer and 7.63 per cent for a medium-sized or large one. You count as small in 2026 if your total insurable payroll in 2024 was no more than 1,082,500 euros.

Return-to-work fund (Whk). This rate depends on your sector and is set out in your decision letter. For small employers in 2026 it runs from 0.76 per cent in insurance to 6.63 per cent for temporary staffing agencies.

The Ufo premium of 0.68 per cent, a childcare surcharge of 0.50 per cent and the employer's health insurance levy (Zvw) of 6.10 per cent.

You pay all of these on salary including holiday pay, up to the maximum of 79,409 euros a year. Pay above that ceiling carries no further premium.

A worked example for 2026: an employee on 4,000 euros gross a month, with a permanent contract, working for a small employer. Annual salary is 48,000 euros and holiday pay 3,840 euros. On that 51,840 euros you pay 1,420 euros unemployment premium, 3,250 euros disability premium, 353 euros Ufo premium, 259 euros childcare surcharge and 3,162 euros health insurance levy, which is 8,445 euros in premiums.

Together with holiday pay, that puts 12,285 euros on top of the gross salary, or 25.6 per cent. In this example the employee costs you 60,285 euros a year, a little over 5,020 euros a month. On a fixed-term contract the bill rises by about 2,590 euros a year.

The Eurostat average is higher because it also contains pension contributions, the Whk premium and other costs that differ from employer to employer. Add those yourself.

Pension first. The contribution is set in your pension scheme or collective agreement, and the employer's share differs per fund and scheme. Ask your fund or insurer for it and add it in.

Sickness is the second. According to the Dutch government, an employer keeps paying at least 70 per cent of salary for up to two years of illness, and at least the minimum wage in the first year. That is not covered by any premium, so set money aside or insure it.

Third, the work-related costs scheme. In 2026 you can spend 2 per cent of your taxable payroll up to 400,000 euros, and 1.18 per cent above that, on tax-free allowances and benefits. Beyond that free allowance you pay an 80 per cent final levy.

And then the hiring itself. A role that stays open for months has a price too; our business case for RPO shows how to calculate it. What actually makes a candidate say yes is covered in employment terms that count.

Is wage tax an employer cost?

No. You withhold wage tax and national insurance contributions from the gross salary and pay them to the Tax Administration, but it is the employee's money. It decides their net pay, not what the employee costs you. The employee insurance premiums and the health insurance levy are what you pay on top.

When do I pay the high unemployment premium?

On every contract that is not a written permanent one, and on every on-call contract. If a permanent employee contracted for 30 hours a week or less on average is paid for more than 30 per cent more hours in a year than agreed, the high premium applies retroactively. Keep the signed contract in your payroll records, or you cannot justify the low rate.

Does a young employee cost less?

The premium rates are the same, but the salary they apply to is lower while the youth minimum wage applies. That youth wage rises sharply on 1 January 2027; by how much is explained in our article on the Dutch youth minimum wage in 2027. Budget with next year's wage, not only today's.

SocialFind wrote this article from the rates published by the Dutch Tax Administration and the Dutch government, checked on 27 October 2026. It is a calculation aid, not payroll advice; your payroll provider has the final word. Why we do not publish our own cost per hire is explained on our figures page and in how we handle results. Want articles like this in your inbox? Subscribe to our newsletter.