When do I have to pay the Dutch payroll?

If you or your company have a registered office or workplace in the Netherlands with employed personnel, you must deduct the correct payroll tax from the employee’s wages. The payroll tax is based on income tax, employee insurance contributions, social security contributions, and health care contributions.

You are required to deduct Dutch payroll taxes when;

• Your company has its registered office in the Netherlands
• You have a permanent establishment in the Netherlands
• You send, hire or assign staff in / to the Netherlands.
• Your employee works on the Dutch continental shelf.
• Your employee is subject to the national insurance schemes of the Netherlands.

In some situations, you are required to deduct taxes; even if your company has its main registered office in another country.

If you employ staff, you must do the following;

• Register as an employer in the tax and customs administration. This will result in receiving a payroll tax number along with the required required forms. Your payroll tax number is then used when filing returns and with respect to other types of contact with tax and customs administration offices.
• Ask your employee to provide you with a written statement that includes their last name and initials, address and postal code, and their place of residence, country and region of residence along with their date of birth and citizen service number (burgerservicenummer) or number of social security and tax (also known as sofinummer).
• Check and record the identity of each employee with the case of foreign workers, including checking whether or not they are authorized to work within the Netherlands.
• Create a payroll record.
• Determine the salary elements for the employee and then calculate the correct associated taxes and any contributions required by law.
• File the tax return before the indicated deadline and pay the calculated taxes. The tax and customs administration office will inform you the date and how to file the declaration correctly.

In case the employer or the employee does not comply with the obligations related to the payroll tax or the confirmation of the identity of the employee, they must apply the “anonymous person rate”.

Under specific conditions, individuals can offset a VAT payment with a payroll tax return. However, to do this, the Dutch form must be used (verzoek loonheffingen verrekening met teruggaaf by the way).

If an organization hires temporary staff through a broker or subcontracts the work to a contractor or subcontractor, the people hired must pay payroll tax for these staff members. If the company does not follow these procedures, the Dutch authorities will hold the employer accountable and therefore respond.