Smiling men wanting to know what the costs of hiring employees are.

How much does personnel cost?

That personnel cost money is certainly not surprising. When you hire someone, they earn a salary. But that’s not the only expense you have. In addition to the gross salary that you agree upon, there are about 25 to 30 percent of other personnel costs. So, what does an employer actually spend on an employee?

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How to calculate personnel costs?

Uncover the costs of hiring personnel in this FAQ. Explore direct wage costs, indirect wage costs, and mandatory premiums and contributions. Master the breakdown of personnel expenses for effective planning and budgeting.

How do you calculate direct wage costs?

The direct wage costs for the employer include salary, vacation allowance, commissions, and profit-sharing.

Note: you must comply with the legal minimum wage. Additionally, direct wage costs are often dependent on the industry’s collective labor agreement (CAO). It is also advisable to provide competitive compensation. The vacation allowance is at least 8% of the gross wage.

What are examples of indirect wage costs?

The indirect wage costs include pension contributions, travel expenses, other expenses, and secondary employment conditions.

What are mandatory premiums and contributions?

These mandatory premiums and contributions are income tax, national insurance contributions, and employee insurance contributions. These are the payroll taxes you need to remit. The actual amount you spend on personnel costs depends on the agreements with your employees. For example, you may agree on a 13th-month bonus, training allowances, or supplementary pensions. Additionally, there may be expenses related to facility management. Employees may require certain items to perform their work, such as a desk, a computer, and/or coffee.

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What are the costs of employing personnel through Tentoo?

When you employ a staff member through Tentoo, you don’t need to worry about mandatory premiums and contributions that need to be paid. You also don’t have to concern yourself with pension contributions, travel expenses, and other costs related to your employee. Tentoo takes care of all of these matters. You will receive a single invoice from us that covers everything. This saves you a lot of administrative hassle!

The benefits

  • No labor law risks
  • You don’t have to continue paying during illness; we take care of that
  • You can outsource salary administration
  • Salary payments are handled for you
  • We provide pre-financing of wage costs
  • You can directly manage your employees
  • You can employ the staff member on a flexible basis for an extended period

Please note: If you are hiring personnel for the first time, you must register as an employer with the Tax Authorities using the “Melding Loonheffingen Aanmelding Werkgever” form.

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Hiring personnel: when and why (not)?

Ready to optimize your business with new hires? Explore the essential FAQs surrounding personnel management and make informed decisions to unleash the true potential of your workforce. Discover how to increase engagement, loyalty, and knowledge while effectively managing personnel costs.

When do I have to hire personnel?

The decision to hire personnel varies depending on the company situation. Are you a freelancer and need someone to assist with all your tasks? Or do you run a sole proprietorship with a few employees and require additional manpower to facilitate growth? In these situations, hiring a new employee involves more considerations compared to an SME with dozens of employees. Additionally, there are different factors to consider when restructuring your company after a reorganization.

How to hire personnel?

If you want to hire personnel, how should you go about it? It starts with conducting a thorough search for a suitable candidate. ”Employer branding” can help you find the best candidate for your company and specific job vacancy. Once you have found this employee, make clear agreements about the work, working hours, and salary, and document them in an employment contract.

What are the advantages of hiring personnel?

By hiring an employee, you increase their engagement and loyalty. You reduce the risk of them leaving your company, taking away their knowledge and experience. It is beneficial to have employees who are familiar with your company, work methods, and processes inside and out.

What are the disadvantages of hiring personnel?

A long-term sick employee can incur significant costs, particularly for businesses with few employees. You are obligated to continue paying a sick employee for up to two years, and you may also need to find a replacement. These costs can be high. An employee on your payroll cannot be utilized solely when needed; the costs are ongoing. With a payroll or temporary worker or a freelancer, you can pay for the hours worked only. Terminating the employment of a permanent staff member is challenging (and costly). Finally, one reason not to hire personnel is the administrative burden it entails (such as maintaining accurate payroll records).

Streamline your personnel management with Tentoo

Tentoo specializes in providing solutions for employers to handle administrative and legal obligations related to personnel. By partnering with Tentoo, employers can benefit from the expertise of our experts. This enables employers to manage personnel more efficiently and effectively.

Smiling young woman discovering why she should hire personnel and why not.
An employee with a minimum wage?

What are the costs for the employer?

On January 1, 2024, the legal minimum wage will increase by 3.75%. In addition, one uniform legal minimum hourly wage will be introduced; the fixed minimum monthly, weekly and daily wages will disappear. Currently, minimum wage earners working 40 hours have a lower hourly wage than people working 36 hours; from 2024, all workers in the Netherlands will be entitled to the same hourly wage regardless of the number of hours they work per week. The legal gross minimum hourly wage for workers aged 21 and older will be €13.27 per hour in 2024. When you hire someone, you are therefore obligated as an employer to pay at least this minimum amount in salary costs. The minimum wage is linked to the average development of contract wages and is adjusted every year on January 1st and July 1st. Approximately 30 percent in additional personnel costs are added on top of the gross wage. As mentioned, the agreements you have with your employees can influence the costs.

If you pay an employee through Tentoo, you don’t have to worry about the mandatory premiums and contributions that need to be paid.


Reach out to us

Ready to hire personnel? We’re here to help! Whether you need information on employment costs or want to explore our services, reach out to us or fill out the form to see what we can do for you.

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