What taxes does an employer need to pay on behalf of an employee?
First of all, an employer withholds pay-as-you-earn tax, as well as the employee share in Dutch social security contributions (if applicable) on the income of the employee. This tax is then remitted to the authorities. Even when an individual is on a US payroll, a formal obligation remains in the Netherlands to operate a ‘shadow payroll’. Also, when the employer is employing individuals, covered by Dutch social security, the company needs to pay the employer share in social security contributions to the government.
