What are Umbrella Services?

Umbrella services are services provided by a Dutch payroll company to foreign companies that have employees stationed in the Netherlands without having an official corporate presence here (yet). So the umbrella services provider acts as the formal employer and handles all administrative, taxation, payrolling and legal issues pertaining to employing workers.

What are Contracting Services?

Contracting services are basically the same as umbrella services, except that they are geared towards foreign freelancers and contractors (including agency contractors), rather than foreign companies.

Is there a difference between payroll and contracting?

Please note that payroll services are very different from contracting or umbrella services. Our payroll service consists of payroll administration for the client. Specifically, we provide the pay slips, annual statements, monthly payment instructions and any calculations relevant to the tax authority and pension funds.

With contracting, or umbrella services, we become your employees’ formal employer – we act as employer in the legal sense while you remain in complete control on the shop floor, so to speak. In other words, you decide who works when, where, how long and for what salary. And we invoice you on a monthly, weekly or hourly basis, depending on what suits the situation best.

Is there a difference between an umbrella company and an agency?

Agencies are known for the intermediary role they play in connecting workers with specialised skills to employers, or clients. They generally charge higher rates than those agreed directly between contractors and clients and they are not normally in the business of payrolling: they simply receive invoices from their contractors and forward them to the end client. In cases where contractors have a limited company but IR35 does not apply, agencies require contractors to use the services of an umbrella company.

What will it cost me?

Off course we have a standard fee per payslip but WePayPeople offers you custom made package: Including standard services such as payslips and other reports and optional services such as payment service and pension administration etc. The total costs will depend on the kind of packkage you choose.

Our umbrella/contracting services charge at a rate of 3% of the total wage. The fee includes the application for a social security number for EU residents.

I have people working in the Netherlands. Do I have to set up a Dutch company?

No, but hiring a Dutch payroll company is highly advisable, since your employees are subject to Dutch tax laws and other legislation. The easiest option is to use a Dutch payroll company that provides umbrella services, like WePayPeople, which acts as the formal employer of your employees and handles all administrative, tax and payrolling matters, including those related to sick leave. Depending on the type of contract we have with your employees, you pay for hours worked only.

What is the 30% ruling?

Expats in the Netherlands can apply for a tax-free allowance of 30% of their taxable gross income. This serves as compensation for (non-deductible) extraterritorial costs and expenses (ET costs), regardless of the actual costs involved.

To which part of my income does the 30% ruling apply?

It applies to your total gross income, including bonuses, company car taxes and typical Dutch income components such as the standard 8% holiday pay.

When am I eligible for the 30% ruling?

In the first place, you need to be a Knowledge Migrant Worker in the eyes of the Dutch Immigration and Naturalisation Service (IND). In addition, you are employed by a Dutch employer or Dutch umbrella company.

Are there any downsides to the 30% ruling?

Possibly. Since it reduces your taxable income, your entitlement to social benefits and the tax refund of any mortgage interest you pay may be reduced. Additionally, pension cannot be accrued over the 30% facility. The upside, however, is that you will pay a significantly lower effective tax rate than workers who are ineligible for the ruling.

What is a Knowledge Migrant Worker?

A knowledge migrant is a highly skilled foreign worker who works in the Netherlands on a salary in excess of € 54,289 (or € 39,800 if the employee is under 30). Moreover, the worker’s skills are scarce on the Dutch labour market. The status of Knowledge Migrant Worker is granted by the IND (Dutch Immigration and Naturalisation Service).

Do I qualify for the 30% ruling if I am self-employed?

No; one of the conditions is that you are employed by a Dutch organisation. But a workaround would be to set up a Dutch company (a B.V.) and put yourself on the company’s payroll. It is much simpler, however, to use an umbrella company such as WePayPeople to act as your formal employer.

What is BSN?

The BSN is a unique registration number for everyone who lives in the Netherlands. It is required for any interaction with the Dutch authorities: starting a job, opening a bank account, applying for a Dutch driving licence, deducting your taxes and social security contributions, taking out health insurance, applying for benefits and announcing a change of address. The Dutch Authorities use it also to combat identity fraud and misspelled names. With the citizen service number the Dutch government wants to improve the services it provides to you, combat fraud and also wants to improve the protection of your privacy.