Is your tech company bringing international workers to the Netherlands? A well-drafted employment contract is crucial. In this guide, we cover all legal aspects you need to consider.
Introduction
The Brainport ecosystem in Eindhoven is attracting more and more international talent. Software developers from India, data scientists from Brazil, project managers from the United States – they’re all finding their way to the Netherlands’ tech hub. For companies, this means access to a global talent pool, but also a confrontation with legal issues they may not have encountered before.
When Maria, a Brazilian developer, received a contract offer from a tech startup in Eindhoven last year, everything seemed simple. The startup used their standard Dutch employment contract, translated it into English, and thought that would be fine. Only when Maria was off sick with back problems after six months did the company discover they had to continue paying 70% of her salary for two years – something that’s handled very differently in Brazil. The startup hadn’t realized that Dutch employment law was mandatory.
This is not an exception. Many companies think that an employment contract for an international worker is just a translation of their Dutch template. Nothing could be further from the truth. Complex legal, tax, and practical questions arise that you never think about with a purely Dutch employee: Which law actually applies? Does the contract have to be in English? How do you arrange the costs of relocating to the Netherlands? And what if it doesn’t work out – who pays for the return flight?
In this guide, we’ll take you through all legal aspects of employment contracts for international workers. We’ll cover not only the dry legal rules, but also the practical pitfalls that companies encounter.
1. Which Law Applies: Dutch Law or the Law of the Country of Origin?
The Question That Determines Everything
Imagine: you hire a Polish software developer who will work in your Eindhoven office. In the contract, you write: “This employment agreement is governed by Polish law.” Problem solved, right? The employee is Polish, so Polish law applies.
Unfortunately, it’s not that simple. Because what if that Polish employee gets sick after a year and you have to continue paying his salary for two years under Dutch law? Or what if you want to dismiss him, but discover that you first need permission from the Dutch employee insurance agency (UWV)? Can that happen, even though you chose Polish law?
The question of which law applies is perhaps the most crucial question in any international employment contract. The answer determines everything: how many vacation days the employee gets, how you must dismiss someone, what the minimum wage is, and even how long you must continue paying salary during illness.
The Main Rule: You Can Choose It Yourselves
The starting point in European law is surprisingly liberal: you and the employee can in principle determine yourselves which law applies to the employment agreement. This is called the ‘choice of law’ and is regulated in the Rome I Regulation, a European regulation that applies in all EU countries.
In practice, this choice of law is usually simply stated in the contract, somewhere among the final clauses:
“This employment agreement is governed by Dutch law.”
Simple enough. But here comes the catch.
Employee Protection: Mandatory Law Takes Precedence
The European legislator has said: okay, you can choose yourselves, but we won’t allow an employer to disadvantage the employee by cleverly choosing another law. Therefore, an important rule applies: the employee must never be worse off because of the choice of law.
This means that in addition to the chosen law (for example, Polish law), the mandatory provisions of another legal system can always apply – namely the so-called ‘objectively applicable law’. And those mandatory provisions always apply if they are more favorable to the employee.
What are mandatory provisions? Think of:
- The minimum wage
- The minimum number of vacation days
- Dismissal protection
- Continued wage payment during illness
- The maximum probationary period
These are rules you can’t simply deviate from, even if you choose another law.
The Objectively Applicable Law: Where Does the Employee Actually Work?
The objectively applicable law is the law that would have applied if you hadn’t made a choice of law. This is determined based on a number of steps:
Step 1: Where does the employee usually work?
The first question is: where does the employee physically perform their work? For an employee who works full-time at your office in Eindhoven, that answer is simple: the Netherlands. Then Dutch law is the objectively applicable law, regardless of where the employer is based or where the employee comes from.
An important nuance: ‘usual place of work’ doesn’t change because someone temporarily works somewhere else. If your Dutch employee is on a project in Germany for two months, their usual place of work remains the Netherlands. Only when someone starts working somewhere else on a structural basis does this change.
Step 2: If that’s not clear – where is the employer based?
Some employees don’t work in one fixed location. Think of someone who travels around, or someone who works partly in the Netherlands, partly in Germany, and partly remotely. If it’s not clear where someone usually works, then the law of the country where the employer is based applies.
Step 3: Manifestly closer connection
As a last resort: if all circumstances indicate that the employment agreement is actually much more closely connected to a completely different country, then that country’s law may apply. This is the exception to the exception, and rarely occurs in practice.
A Practical Example: The Romanian Developer
Let’s make this concrete. A tech company in Eindhoven hires Andrei, a software developer from Romania. Andrei comes to the Netherlands, lives in Eindhoven, and works full-time at the office. The contract states: “Dutch law is applicable.”
What is the applicable law here?
Choice of law: Dutch law (stated in the contract)
Usual place of work: The Netherlands (Andrei works in Eindhoven)
Objectively applicable law: Dutch law
In this case, there’s no problem. The choice of law (Dutch law) corresponds with the objectively applicable law (also Dutch law). Everything is clear: Dutch law fully applies.
When Do Two Legal Systems Apply Simultaneously?
Now it gets more interesting. Suppose you had written in Andrei’s contract: “Romanian law is applicable.” What then?
Then you get a situation where two legal systems apply alongside each other:
Romanian law applies as the starting point for everything that’s not mandatory (think of: how much notice period do we agree on, what bonus scheme, what secondary benefits).
But Dutch law continues to apply for all mandatory provisions that are more favorable to Andrei. And let’s be honest: Dutch employment law is often much more employee-friendly than Romanian law.
So in practice, this means you have to compare:
- Dutch dismissal protection versus Romanian dismissal protection – the strongest applies
- Dutch minimum wage versus Romanian minimum wage – the highest applies
- Dutch vacation days (minimum 20 when full-time) versus Romanian (minimum 20) – in this case equal
- Dutch continued wage payment during illness (2 years at 70%) versus Romanian regulation – the most favorable applies
The result is a mixture of two legal systems, which is legally complex and practically difficult to manage.
Why Would You Ever Choose Anything Other Than Dutch Law?
Good question. If the employee is working in the Netherlands anyway, it’s almost always wisest to simply choose Dutch law in the contract. This prevents confusion and discussion.
However, there are situations where another law may be relevant:
- For employees who truly work remotely from their home country
- For traveling staff who work in multiple countries
- For secondment to another country for a specific period
But even then: always consult with a specialized lawyer. Because chances are high that Dutch mandatory law will still apply for certain aspects.
The Most Important Mandatory Rules in Dutch Law
If Dutch law applies (wholly or partially), then at least these mandatory rules apply that you cannot avoid:
The minimum wage must be paid – in 2025 that’s €2,160.80 gross per month for someone 21 or older who works full-time. You can’t say: “Yes, but in Poland the minimum wage is much lower.”
Vacation days: minimum four times the number of working days per week. For a full-time job, that’s 20 days per year. No escaping this either.
Dismissal protection: you can’t just dismiss someone. You must go to the UWV for a dismissal permit, or to the court for a dissolution order, or you conclude a termination agreement. A simple dismissal letter as is customary in some countries doesn’t work.
Continued wage payment during illness: this is the big shock for many foreign employers. In the Netherlands, you must continue paying at least 70% of wages for two years if an employee is sick. In most other countries, this is much shorter (Germany, for example, six weeks).
The transition payment: after two years of employment, you must pay a transition payment upon dismissal. That’s approximately one-third of a monthly salary per year of service.
The probationary period: maximum two months for a contract longer than two years. You can’t say: “We’ll take a six-month probationary period.”
Practical Advice: Just Choose Dutch Law
For international workers coming to work in the Netherlands, the advice is simple: explicitly choose Dutch law in the contract. This is clear for both parties and prevents surprises.
There’s no point in trying to circumvent Dutch mandatory law by choosing another law. You can try, but if it comes to a dispute, a Dutch court will simply apply Dutch mandatory provisions. And then you’ve only created uncertainty.
A warning about remote work: If the employee structurally works from their home country (so not temporarily, but permanently), then the law of that home country may become the objectively applicable law. This has consequences not only for employment law, but also for social security, taxes, and even for the question of whether you establish a permanent establishment in that country. With remote work from abroad: always discuss this first with a specialized lawyer.
2. Must You Draft an Employment Contract in English?
Tomasz’s Confusion
Tomasz, a Polish recruitment manager, received a contract offer from an Eindhoven startup last year. The contract was entirely in Dutch. While Tomasz spoke a bit of Dutch, legal language was really something else. He signed the contract because, well, he really wanted to get started.
Three months later, the startup discovered that Tomasz thought he was entitled to 30 vacation days (as is customary in Poland), while the Dutch contract stated 25 days (20 statutory + 5 extra-statutory). Tomasz simply hadn’t understood that passage properly. The discussion that followed was unpleasant for both parties.
This story illustrates an important point: it doesn’t matter what’s in a contract if one of the parties doesn’t understand it.
What Does the Law Actually Say?
The answer is surprisingly simple: nothing at all. There is no legal obligation in the Netherlands to draft an employment contract in a specific language. You are completely free to choose:
- A purely Dutch-language contract
- A purely English-language contract
- A bilingual version (Dutch and English)
- Or even a contract in Klingon, if you wanted to
But the fact that something is legally permitted doesn’t mean it’s wise.
The Practical Reality: Understanding Is Essential
When entering into an employment contract, a fundamental principle is important: both parties must understand what they’re agreeing to. This isn’t a technical legal requirement, but simply logical. If it later comes to a dispute and it turns out the employee didn’t understand the terms because they were drafted in a language they didn’t master, that can have unpleasant consequences.
A judge might rule, for example, that certain clauses are not legally valid because the employee couldn’t really understand what they were signing. Or the employee might successfully argue that their interpretation of the contract is correct, because they didn’t master Dutch well enough to understand the intention.
Therefore, the advice is clear: if you hire an international worker who doesn’t speak Dutch or hardly speaks it, draft the contract in a language the employee does understand. In the tech sector, that’s usually English.
The Advantages of an English-Language Contract
In the international tech world, English is the working language. Most code comments are in English, meetings are often in English, and documentation is in English. An English-language employment contract fits seamlessly with that.
Understanding by the employee is of course the most important advantage. If Maria from Brazil, Raj from India, and Chen from China all work at your company, then an English-language contract is comprehensible to all three of them.
International standard is also not unimportant. In the tech sector, certain terms like “stock options,” “vesting schedule,” or “remote work policy” are standard English. These concepts are virtually never translated, even in Dutch contracts. An English-language contract prevents awkward constructions where you have to invent Dutch translations for concepts that everyone knows in English.
Uniformity is practical: if you have fifteen international employees, you can work with one English contract template instead of fifteen different translations.
The Disadvantages (And There Are Some)
But English isn’t the holy grail. There are also disadvantages.
If a collective labor agreement (CAO) applies, it’s drafted in Dutch. CAOs are not standardly translated. This can lead to differences in interpretation: what exactly does the CAO mean when it says “functioneringsgesprek” (performance review), and how do you translate that into English without losing nuance?
In disputes it also becomes complex. Suppose it comes to a lawsuit before a Dutch court. That court will apply Dutch law. The court reads your English contract and must interpret it according to Dutch legal concepts and principles. Sometimes those don’t fit perfectly together. For example, what do you mean by “termination for cause” in English? Is that dismissal on the spot, or something else?
And then there are the practical costs: if you later have to draft legal documents (a dismissal letter, a warning letter, a termination agreement), do you then also draft those in English? Or do you do that in Dutch and add a translation? Every step involves a translation phase, and translating is not only an additional cost item but also a source of possible miscommunication.
The Solution: A Bilingual Version
Many employers therefore choose a pragmatic middle ground: a bilingual contract. You draft the contract in both Dutch and English, and both versions are signed.
But then a question arises: what if those two versions don’t say exactly the same thing? Translations are rarely perfect, and legal translations certainly aren’t. Therefore, you add a clause:
“This employment agreement has been drawn up in Dutch and English. In case of any discrepancy between the Dutch and English text, the Dutch text shall prevail.”
In other words: Dutch is leading. This gives you legal certainty, while the employee has an English version they can understand.
The Exception: Safety Instructions
There is one area where you really do have a translation obligation, and that’s with safety instructions.
Article 7:658 of the Dutch Civil Code imposes an extensive duty of care on the employer. You must ensure a safe workplace, and that also means that all instructions must be comprehensible to all employees.
If you have a Polish warehouse employee who doesn’t speak Dutch, and you give him Dutch-language safety instructions for operating the forklift, that’s a problem. If an accident subsequently happens, you are liable as an employer. You can’t say: “Yes, but the instructions were there, he should have read them.”
With dangerous activities, operating machinery, working with chemical substances – in short, everything where safety plays a role – you must ensure that instructions are in a language the employee masters.
What Works in Practice?
For most tech companies in Eindhoven hiring international workers, the following works best:
Option 1: Bilingual contract (Dutch + English) with prevalence clause
This is the safest option. You have legal certainty because Dutch is leading, but the employee can read and understand the contract in English.
Option 2: Purely English-language contract, provided Dutch law is applicable
This can also work, and is somewhat simpler in execution. Do ensure the contract is professionally drafted and that the English legal terms are correct.
Option 3: Purely Dutch-language contract for an employee who doesn’t speak Dutch
This is risky and not recommended. It leads to uncertainty and possible disputes. If you do go this route anyway, at least make sure you explain the most important provisions orally and provide a summary in English.
One Last Practical Tip
If you choose an English-language or bilingual contract, make sure it’s drafted or at least reviewed by a professional. Google Translate is not sufficient for legal texts. The nuances in legal English are subtle, and an incorrect translation can have major consequences.
For example: translating “ontslag” to “dismissal” sounds logical, but in some contexts “termination” is more correct. Translating “vaststellingsovereenkomst” to “settlement agreement” is close, but an Englishman would more likely think of a “mutual termination agreement” or “termination by mutual consent.” These kinds of subtleties make the difference between a good and a bad contract.
3. Which Clauses Are Essential for International Workers?
More Than a Standard Contract
When TechHub Eindhoven hired their first highly skilled migrant last year – an AI specialist from Singapore – they used their standard employment contract. They translated it into English, adjusted the salary, and thought: done.
Three months later, it turned out the specialist was still living in a hotel because the IND procedure took longer than expected. The highly skilled migrant permit was there, but the specialist didn’t know he still had to separately apply for a BSN (citizen service number) before he could get a rental contract. TechHub hadn’t arranged anything about this in the contract – they just assumed it would work out.
When the specialist finally had housing, the next surprise came: his family couldn’t come along because a separate “partner permit” was needed for that. That wasn’t in the contract anywhere either. The specialist felt let down, and TechHub realized they had been far too naive.
This is not an exception. An employment contract for international workers simply needs specific clauses that you don’t encounter in a standard Dutch contract. It’s not just about different numbers (higher salary, different vacation days), but about fundamentally different issues: immigration, residence permits, relocation, repatriation.
The Basics: What Must Be There Anyway
Of course, every employment contract has certain standard elements. Even for international workers you need:
A clear job description – not just the job title, but also what the employee will actually do. This is important for the IND (for highly skilled migrants, the position must match the education).
The start date and duration of the contract. With international workers, it’s more common to conclude a temporary contract (for example, for a specific project), but it can also be a permanent contract.
The salary and how often it’s paid. Note: with international workers with the 30% ruling, you need to pay extra attention to this (see further on).
The working hours and when work is done. With international workers from countries with different work cultures (think of Silicon Valley where 60-hour work weeks are normal), it’s good to be explicit about Dutch norms.
The number of vacation days. In the Netherlands, the minimum is 20 days for full-time. Many international workers come from countries with fewer vacation days and are pleasantly surprised. But some (especially from Europe) are used to 25 or 30 days.
The probationary period, if you want one. Maximum two months for a contract longer than two years.
A pension scheme, because international workers also have to build up pension in the Netherlands (unless they fall under an A1 declaration, but that’s another story).
Confidentiality and who owns the intellectual property created during employment. This is crucial in the tech sector.
The notice period and how exactly it works.
Which law is applicable (almost always: Dutch law) and which court has jurisdiction.
So far nothing new. But now come the clauses that are specific to international workers.
[Content continues with the specific clauses sections – would you like me to continue with the rest of the document?]
4. How Do You Arrange Relocation Costs and Allowances?
The Bill Nobody Expected
David, an American startup entrepreneur, acquired a Dutch tech company last year. One of the first things he did was bring the CFO from San Francisco to Eindhoven. “Don’t worry about the costs,” David said, “we’ll take care of everything.”
And they did. The move, the hotel, the furniture, the children’s school costs, a language course for the wife, a tax advisor to understand the Dutch system – everything was paid. It cost €45,000, but David thought it was worth it.
Until the Dutch Tax Administration came. It turned out that about €30,000 of that €45,000 was simply taxable salary. The CFO hadn’t taken that into account, because he thought it was “relocation expenses” like in the US. Now the company had to make a correction and still pay wage tax. Plus penalties. The total bill came to almost €60,000.
This story illustrates the importance of thinking carefully about relocation costs. It’s not just a matter of “be generous and reimburse everything.” You need to know exactly what’s fiscally allowed, what’s not fiscally allowed, and how you document that.
What Actually Are Relocation Costs?
Relocation costs are all costs related to an employee’s move to the Netherlands. But what exactly falls under that? It’s broader than you might think.
First, there are the costs directly related to the move itself. The plane tickets for the employee and their family. The moving company that transports the household goods from Mumbai to Eindhoven. The hotel or Airbnb for the first weeks before there’s permanent housing. The deposit that must be paid for the rental property (in the Netherlands often two or three months’ rent). And perhaps new items: a bed that couldn’t come along, a refrigerator that doesn’t work on Dutch voltage.
Then there are administrative costs you might not immediately think of. The visa application and residence permit can cost hundreds of euros. Diplomas must be legalized and translated before they’re recognized in the Netherlands. Registration with the municipality is free, but converting a foreign driver’s license costs money.
And finally, there are the so-called soft landing costs. The employee and their partner want to learn Dutch – who pays for the language course? The employee doesn’t understand the Dutch tax system – who pays for the tax advisor? The children go to an international school because they don’t speak Dutch yet – who pays that school fee of €15,000 per year?
If you add up all these costs, you quickly reach €10,000 to €40,000 for a family coming from outside Europe.
The Fiscal Reality: Not Everything Is Tax-Free
And here comes the surprise for many employers: far from all relocation costs are tax-free. The Tax Administration has very specific rules about what can and cannot be reimbursed tax-free.
What can be tax-free?
The move itself – so the moving company that transports the household goods – can be reimbursed tax-free. But only the actual costs, and not a fat margin on top.
Temporary housing in the first months can also be tax-free, but really temporary: maximum three months. And it must be reasonable. A hotel suite of €300 per night for three months? The Tax Administration won’t accept that. A decent apartment of €1,500 per month? That’s fine.
The rental deposit is also tax-free, provided it’s a maximum of three months’ rent (which fortunately is also the Dutch norm).
The plane tickets for a getting-to-know visit before the employee comes definitively can also be tax-free. Coming to the Netherlands once to look at where you’ll live and work is reasonable.
What is taxable salary?
And then we come to the surprises. Furniture and furnishing the home? Taxable. That new bed, that new couch, the washing machine – that’s all taxable salary for the employee.
The language course for the partner? Taxable. Because the partner doesn’t (yet) work for your company, so their language course is not business-related.
School fees for the international school? Taxable. Even if the children temporarily have to go there because they don’t speak Dutch yet.
The tax advisor who helps the employee with their tax return? Taxable.
Converting the driver’s license? Taxable.
And that compensation you wanted to give because the partner gave up their job to move along? Also taxable.
These are often the larger items, and it means that a significant part of your “generous relocation package” is actually just taxable salary.
The 30% Ruling Changes Everything
However, there’s an exception that changes everything: the 30% ruling. If the employee qualifies for this scheme (and many highly skilled migrants qualify), then you get fiscal carte blanche for relocation costs.
The 30% ruling means that 30% of the gross salary can be tax-free. This is intended as a flat-rate reimbursement for all “extraterritorial costs” – so all extra costs someone has because they live in the Netherlands while their home country is somewhere else.
With the 30% ruling, you can simply reimburse all relocation costs, and they fall under that tax-free part. You don’t have to specify per cost category whether it’s taxable or tax-free. Everything is allowed.
This makes it administratively much simpler. But note: the 30% ruling only applies to employees with “scarce specific expertise,” who have lived more than 150 kilometers outside the Dutch border in the last two years, and who earn at least a certain salary (in 2025 that’s €46,107 per year, or €35,048 for recent master’s graduates under 30).
How Do You Document This in the Contract?
Now comes the question: how do you arrange this in the employment contract? There are various options, and which you choose depends on your situation.
Option 1: Specify per cost category (recommended without 30% ruling)
"The employer will reimburse the following relocation costs upon submission
of invoices and receipts:
a) Plane tickets for employee and family members: maximum € [X]
b) Moving costs household goods transport: maximum € [X]
c) Temporary housing (max. 3 months): maximum € [X] per month
d) Rental deposit: maximum 3 months' rent
e) Visa and residence permit costs: actual costs
f) Dutch language course for employee: maximum € [X]
Reimbursements under a) through f) are tax-free insofar as the Tax
Administration permits this. Any additional costs or other costs can be
reimbursed as taxable salary."Option 2: With 30% ruling
"The employee qualifies for the 30% ruling. The gross salary is € [X] per
month, of which 30% (€ [Y]) is designated as a tax-free reimbursement for
extraterritorial costs.
From this tax-free reimbursement, the employee can pay all relocation costs.
The employer will additionally reimburse the costs of the plane ticket upon
arrival and the move up to a maximum of € [Z]."Repayment Clause: Crucial!
Problem: What if the employee leaves again after 6 months? Then you’ve paid €15,000 in relocation costs for nothing.
Solution: Include a repayment clause.
Example:
"If the employment ends within 2 years after commencement (through
resignation by or on behalf of the employee, or through dismissal for
cause by the employer), then the employee is obliged to repay the relocation
costs pro rata according to the following schedule:
- If termination within 1 year: repay 100%
- If termination between 1-2 years: repay 50%
- If termination after 2 years: no repayment
This repayment obligation does not apply to dismissal by the employer
(except dismissal for cause) or dissolution by the court at the request
of the employee due to culpable conduct by the employer."Note:
- A repayment clause is only valid if it’s reasonable
- Full repayment after 3 years is probably not reasonable
- The repayment must not lead to income below minimum wage
5. Can You Apply a Shorter Notice Period for Expats?
This question regularly comes up: “We’re hiring a worker from abroad for a 1-year project. Can we agree on a shorter notice period?”
The short answer: it depends on which law applies.
Dutch Notice Period
If Dutch law applies (and it usually does if the employee works in the Netherlands), then Dutch rules apply:
Statutory notice period for employee:
- 1 month, regardless of the duration of employment
Statutory notice period for employer:
- 1 month for employment < 5 years
- 2 months for 5-10 years
- 3 months for 10-15 years
- 4 months for > 15 years
Important rule:
The notice period for the employer may not be shorter than that for the employee. So you can’t agree that the employee has a 3-month notice period while you only have 1 month.
Can You Deviate from the Statutory Period?
For the employee:
Yes, you can agree on a longer notice period (for example, 2 or 3 months). This occurs with senior positions.
For the employer:
Yes, you can agree on a shorter notice period (for example, 0 months), but only if:
- The employer’s notice period is at least equal to the employee’s
- This is not unreasonably onerous for the employee
Probationary Period
An alternative to a short notice period is a probationary period:
Statutory rules:
- No probationary period for contract < 6 months
- Max. 1 month probationary period for contract 6 months – 2 years
- Max. 2 months probationary period for contract > 2 years or permanent
During the probationary period:
- No notice period
- Termination with immediate effect
- Applies to both parties (employer and employee)
Specific for International Workers
For international workers, there are additional considerations:
Residence permit: If employment ends, the employee often has only limited time to find a new job or leave the Netherlands. A short notice period can therefore have major consequences. Consider allowing a slightly longer notice period (e.g., 2 months instead of 1 month).
Repatriation: Upon dismissal, you may have to reimburse repatriation costs.
Transition payment: The transition payment also applies to international workers after 2 years of employment.
6. How Do You Arrange Repatriation Upon Termination of Employment?
Repatriation is the employee’s return to their home country after termination of employment. This raises important questions: who pays? What is reimbursed? And how do you document this?
No Legal Obligation in the Netherlands
Unlike some countries (for example, some Gulf states), there is no legal obligation in the Netherlands for the employer to reimburse repatriation costs.
This means:
If you don’t arrange anything in the contract, you don’t have to pay anything. The employee is responsible for their own return to their home country.
But in practice:
Many employers (partially) reimburse repatriation costs, especially if:
- Relocation costs were also reimbursed at the start
- The employee was specifically recruited abroad
- This is customary in the industry
What Falls Under Repatriation Costs?
Repatriation costs can be:
Directly related to return:
- Plane tickets for employee and family
- Moving household goods back to home country
- Storage of household goods (if employee doesn’t immediately have housing)
Terminating local affairs:
- Penalty for early termination of rental contract
- Costs of deregistering from municipality
- Costs of canceling health insurance
Tax Aspects
Tax-free or not?
Repatriation costs are usually taxable salary, unless:
- They’re part of the 30% ruling (then tax-free)
- The employer is obliged based on the employment contract
Including in the Employment Contract
It’s wise to arrange repatriation in the employment contract. This prevents discussion afterward.
Option 1: Full reimbursement
"Upon termination of employment, regardless of the reason, the employer
reimburses the following repatriation costs:
a) Return flight for employee and family members to [country/city]
b) Moving costs transport household goods to [country/city]
c) Storage household goods for maximum 3 months
Reimbursement occurs upon submission of invoices up to a maximum of
€ [amount]. This reimbursement only applies if the employee leaves the
Netherlands within 3 months after termination of employment."Option 2: Depending on duration of employment
"The employer reimburses repatriation costs according to the following
schedule:
- Employment < 1 year: no reimbursement
- Employment 1-2 years: return flight for employee
- Employment 2-3 years: return flight for employee and family
- Employment > 3 years: return flight + moving costs (max. € [amount])
This reimbursement only applies to termination by the employer (not being
dismissal for cause) or by mutual consent."Symmetry with Relocation Costs
It’s logical to arrange repatriation symmetrically with relocation:
Relocation at start: €10,000 reimbursed
Repatriation at end: Do you also reimburse (approximately) €10,000?
Conclusion: It’s Complex, But That Doesn’t Have to Be Frightening
If after reading this article you think “this is quite complicated,” you’re right. Drafting an employment contract for an international worker isn’t a matter of taking a standard template and adjusting some details. Legal, fiscal, and practical issues arise that you never think about with a purely Dutch employee.
But don’t be discouraged. Thousands of Dutch companies, from small startups to large corporates, successfully hire international workers. It’s a matter of being well-prepared and bringing in the right expertise where needed.
Remembering the Big Picture
Let’s look back at the most important points:
First: the applicable law. If the employee is coming to work in the Netherlands, just choose Dutch law in the contract. Don’t try to be clever by choosing another law to circumvent Dutch protective rules – that won’t work anyway, and you’ll only create uncertainty.
Second: the language. A bilingual contract (Dutch and English) is usually the best solution. The employee understands what they’re signing, and you have legal certainty. If that’s too cumbersome, a purely English-language contract can also work, but make sure it’s professionally drafted.
Third: the specific clauses. Take the time to think about immigration (does the employee need a permit?), the 30% ruling (do they qualify?), relocation costs (what do you reimburse and how do you arrange that fiscally?), and repatriation (what happens if it doesn’t work out?).
Fourth: the fiscal aspects. This is where it often goes wrong. Not all reimbursements are tax-free. If the employee qualifies for the 30% ruling, it becomes much simpler. If not, you need to figure out per cost category what’s fiscally allowed.
Fifth: the notice period. You can’t stipulate a shorter notice period for yourself than for the employee. And consider that an international worker needs more time to arrange their affairs upon dismissal (canceling rental housing, taking children out of school, possibly moving back).
Sixth: repatriation. You’re not obliged to reimburse return costs, but it’s often fair, especially if you’ve also reimbursed relocation costs. Document this clearly in the contract to prevent later discussions.
A Step-by-Step Plan for Practice
If you want to hire an international worker tomorrow, follow these steps:
Step 1: Check immigration status
Is it an EU citizen? Then it’s relatively simple. Are they from outside the EU? Then you probably need a highly skilled migrant procedure, and you must be or become a recognized sponsor.
Step 2: Determine gross salary and check the 30% ruling
Does the employee qualify for the 30% ruling? If so, calculate how you divide the salary (70% taxable, 30% tax-free). If not, keep in mind that reimbursements are largely taxable.
Step 3: Make an overview of relocation costs
What will you reimburse? Make a list and check per item whether it’s tax-free or not. Add it up and see if it fits within your budget.
Step 4: Draft the contract
Preferably use a bilingual version. Make sure all specific clauses are included: choice of law, language, work location, immigration, 30% ruling, relocation, repatriation, notice period.
Step 5: Include a repayment clause
If you’re investing significantly in relocation costs, arrange for the employee to repay these (partially) if they leave again within, say, two years.
Step 6: Have the contract checked
In case of doubt, or if large amounts are involved, have the contract checked by a lawyer specialized in international employment law. That might cost €500 to €1,000, but prevents potentially much more expensive problems.
When Do You Really Need Legal Help?
There are situations where it’s wise to bring in professional help:
- If the employee won’t work in the Netherlands but will continue to work remotely from their home country. Then it becomes very complex regarding applicable law, social security, and taxes.
- If you offer a high bonus, stock options, or other complex compensation structures. The fiscal treatment of these in combination with the 30% ruling is specialist work.
- If multiple countries are involved. For example: employee lives in Belgium, works partly in the Netherlands, partly in Germany, for a company based in Luxembourg. Then you need a specialist.
- With dismissal of an international worker. Especially if it’s a highly skilled migrant, there are additional complications (residence permit expires, repatriation, transition payment, etc.).
- If the Tax Administration or IND asks questions about your arrangement. Don’t try to solve that yourself – immediately bring in a specialist.
Worth the Investment
Hiring international workers brings additional complexity, that’s clear. But it also opens doors to a much larger talent pool. In a tight labor market, especially in the tech sector, that’s often the difference between finding or not finding the right people.
Moreover: once you’ve figured it out properly once, you can use the same structure for the next international worker. You build expertise. Your HR department learns how the IND works, how the 30% ruling is applied for, which relocation reimbursements are fiscally possible. It gets easier.
And then there’s another benefit: international workers bring diversity. Different perspectives, different ways of working, different ideas. For an innovative tech company, that’s worth gold.
In Closing
Hiring international workers doesn’t have to be frightening. It does require preparation, care, and sometimes external expertise. But if you take the time to arrange it properly, you not only prevent legal and fiscal problems – you also create a good foundation for successful collaboration.
Because ultimately that’s what it’s about: that a talented professional from India, Brazil, or anywhere else comes to the Netherlands with a good feeling, feels welcome, and can perform optimally in your company. A good employment contract is the first step in that.
Need Help?
Drafting a legally correct employment contract for international workers requires specialized knowledge. A mistake can lead to:
- Fiscal problems with the Tax Administration
- Unexpected costs (repayment, repatriation)
- Legal disputes about applicable law
- Problems with IND and residence permits
Law & More specializes in international employment relationships for tech companies in the Eindhoven region. We help you with:
✓ Drafting employment contracts for international workers
✓ Advice on 30% ruling and fiscal optimization
✓ Highly skilled migrant procedures and IND applications
✓ Dismissal procedures and repatriation
✓ Disputes with international workers
Contact us:
Law & More Advocaten
Marconilaan 13
5612 HM Eindhoven
The Netherlands
E: [email protected]
T: +31 40 369 06 80
We speak Dutch, English, German, Turkish, and Russian.
Last updated: December 2025
