For qualifying withholding agents a range of administrative obligations apply. The most important obligations relate to the following:

Registration as an employer

The withholding agent must register itself with the Dutch tax office, and (indirectly) with the Dutch social security office (UWV).

Depending on the nature of the business and the nature of the activities of the employees of the employer, Collective Labor Agreements may be applicable as a consequence of which the employer may have to register with a Sector Pension Fund(s).

To the extent an employer puts employees to the disposal of third parties (where they work under supervision of this third party), the employer has the legal obligation to register as such in the Trade Register of the Chamber of Commerce, the so-called “WAADI Registration”.

Identification of the employee

Any withholding agent has the legal obligation to identify its employee(s). This implies that the employer must gather the following information and documents at the start of the employment:
Information required:

• surname and initials
• date of birth
• BSN/Dutch tax registration number  
• address
• postal code and city
• country of residence and region if not residing in the Netherlands
• bank account in the name of the employee

Documents required:

• copy passport or another legally accepted identification document
• signed and dated wage tax statement (…. )
• if the 30% ruling applies: copy of 30%- ruling decree
• if the employee wants to opt for insurance in its country of origin: the A 1 statement or Certificate of Coverage.

Keeping payroll records

A withholding agent has the legal obligation to keep payroll records, unless this obligation is transferred to a third party. The latter requires a notification/ request to be filed with the Tax Administration.

Payroll records must contain the salary slips and all data relevant for the withholding of the payroll taxes and the payment thereof to the Tax Administration. This information is usually in digital format, and incorporated in payroll software.

The withholding agent is legally obliged to keep the payroll records in storage for a period of seven years. This storage obligation explicitly also applies to digital records, computer software and programs.

Producing employee salary slips

The withholding agent has the legal obligation to provide the employee(s) with monthly salary slips.
These salary slips list the data which are important for the withholding of salary taxes. The salary slip consists of two parts:

• sections with the static information such as the employee’s personal details, the personal details of  the withholding agent, the payroll taxes number, and data about the employment, and  
• section with dynamic information about the taxable basis (including the amount of the salary, allowances, benefits, etc) and the data relevant  for the monthly withholding, like applicable wage tax table, allowances and deductions applied, the wage tax and social security premium withheld, etc.

• the gross wages
• the composition of the wages, e.g. basic wages, guarantee wages, performance-related pay, commission, overtime allowance, allowances, contributions and bonuses
• tax free allowances and deductions, including the 30% allowance if applicable,
• income in kind, like the addition for a company car, lunches provided by the employer, housing provided by the employer, etc.
• the amounts withheld from the wages, such as the payroll taxes, the employed persons’ insurance scheme contributions, the income-dependent Care Insurance Act contribution, etc.  
• the hours worked
• the wage period 
• the minimum wages applicable to the employee in the period on which the wages are calculated
• the name of the employer and the employee
• wage tax number
• Dutch tax registration number (BSN number) of the employee
• tax credits applied  
• the withholding table applied  

Issuing an annual income statement

The withholding agent has the legal obligation to issue an annual income statement (‘jaaropgave”) to employee after the end of the calendar year. This statement should be provided to any person that is or was employed during the preceding calendar year.

The annual income statement must state specific data that are relevant for the levy of wage tax/social security contributions and the income-dependent Care Insurance Act contributions. In any event it must include: 

• personal data of the employee and the employer
• the wage received by the employee
• the wage tax/social security contributions withheld
• the tax registration number of the employee
• the wages for the purposes of the Care Insurance Act and the income-dependent Care Insurance Act contributions withheld.
• the code as to whether determining the wage tax/social security contributions no account (code 0) or account (code 1) has been taken of certain tax credits
• the total amount of the applied tax credits 

Go to >   The payroll service package of TAXci

Go to >    Index page - Payroll obligations in the Netherlands