Payrolling under Dutch law: the payroll agreement, equal terms, pension and the 2028 changes

Payrolling is a form of temporary agency work in which a payroll company formally employs a worker who has been recruited by the client itself, and places that worker with the client. Dutch law gives payroll workers stronger protection than ordinary agency workers: the lighter agency regime does not apply to them (Article 7:692a of the Dutch Civil Code), and they are entitled to at least the same employment conditions as employees in equal or equivalent positions at the client, with an adequate pension (Article 8a of the Placement of Personnel by Intermediaries Act, Waadi). The Act on more security for flexible workers leaves this model largely intact, but its general rules on working hours and the chain rule also apply to payroll workers from 1 January 2028.

Payrolling in the Netherlands at a glance

• Definition: an agency contract where the payroll company did not bring worker and client together, and may only place the worker elsewhere with the client's consent (Article 7:692).
• No agency regime: no agency clause, and the ordinary chain rule applies from the start (Article 7:692a(1)).
• Equal terms: at least the same conditions as comparable employees of the client, or of the sector (Article 8a Waadi).
• Pension: an adequate pension scheme is required (Article 8a(4) to (6) Waadi).
• Continued pay: can only be excluded for the first six months in limited cases (Article 7:692a(2) and (3)).
• 2028: the new rules on fixed hours, bandwidth contracts and the 36-month chain rule also apply to payroll workers.

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What Is Payrolling Under Dutch Law?

A payroll agreement is an agency contract in which the contract between the payroll company and the client did not come about by matching supply and demand on the labour market, and in which the payroll company may only place the worker with someone else with the client's consent (Article 7:692 of the Dutch Civil Code).

In practice the client finds and selects the worker, and the payroll company takes over the formal employer role: the employment contract, the salary administration and the other employer obligations. The worker works under the client's supervision and direction. The Waadi uses a corresponding definition of payrolling (Article 1(1)(d) Waadi). Because the payroll company plays no part in bringing worker and client together, the law treats the arrangement differently from ordinary agency work.

How Does Payrolling Differ From Temporary Agency Work?

The special agency regime does not apply to payroll contracts. Article 7:691, which allows an agency clause and postpones the chain rule, and the general possibility to exclude continued pay for the first six months, do not apply to the payroll agreement (Article 7:692a(1)).

For ordinary agency work, see temporary agency work in the Netherlands.

Are Payroll Workers Entitled to the Same Conditions as the Client's Employees?

Yes. A payroll worker is entitled to at least the same employment conditions as employees in equal or equivalent positions employed by the client (Article 8a(1) Waadi). If the client has no such employees, the benchmark is the conditions of employees in equal or equivalent positions in the client's sector (Article 8a(2)).

This covers all employment conditions, not just pay, with a separate rule for pension. It is mandatory: the rule cannot be departed from to the payroll worker's detriment (Article 8a(7)). If the client participates in a sector fund that the payroll company cannot join, the payroll company must reserve an equivalent monetary contribution for the worker and pay it out at least once a year (Article 8a(3)). The rule also applies where the payroll company and the client belong to the same group of companies (Article 8a(8)).

The client must give the payroll company written or electronic information about the applicable conditions before the placement starts (Article 12a Waadi).

Do Payroll Workers Have a Right to a Pension?

Yes. A payroll worker must have an adequate pension scheme if comparable employees of the client, or in the client's sector, have a pension scheme (Article 8a(4) Waadi).

The scheme is in any event adequate if the payroll worker has the same basic pension scheme as those comparable employees (Article 8a(5)). It is also adequate if it meets requirements set by government decree on, among other things, the waiting or threshold period, the level of the employer contribution and the types of pension (Article 8a(6)).

Must a Payroll Worker Be Paid When There Is No Work?

As a rule yes: the employer must continue to pay wages if the worker does not work, unless the reason should reasonably be for the worker's account (Article 7:628(1)). For payroll workers this can only be excluded, in writing, for the first six months, and only if such an exclusion is customary in the position at the client or provided for in the collective agreement that applies to the client (Article 7:692a(2)).

For successive payroll contracts, the exclusion can be agreed for a maximum of six months in total (Article 7:692a(3)). The more general option of Article 7:628(5), which lets employers in other cases exclude continued pay for the first six months, does not apply to payroll contracts (Article 7:692a(1)).

How Can a Payroll Contract End?

Like an ordinary employment contract. Because the agency clause of Article 7:691 does not apply, a payroll contract does not end automatically when the client ends the assignment (Article 7:692a(1)).

A fixed-term payroll contract ends at the agreed date, subject to the chain rule for successive contracts, which applies to payroll workers from the start; see the chain rule. A permanent payroll contract can only be terminated on the statutory grounds, with the usual dismissal protection; see termination of the employment contract.

What Changes for Payroll Workers in 2027 and 2028?

The Act on more security for flexible workers (Bulletin of Acts and Decrees 2026, 205) makes mainly technical changes to the payroll article itself. The larger effect comes from the general rules for flexible contracts, which also apply to payroll workers.

The entry into force follows from the Decree of 13 July 2026 (Bulletin 2026, 206). For the overall picture of the new rules, see flexible workers and the 2028 rules.

What Should Clients Consider Before Using Payrolling?

• Cost: because payroll workers must receive the same conditions and an adequate pension, payrolling mainly saves administration, not employment costs.
• Information: the client must supply complete information on its employment conditions before the placement and, from 2027, when they change.
• Classification: whether an arrangement is payrolling or ordinary agency work depends on the facts, in particular who recruited the worker. The label in the contract is not decisive.
• Contract design: from 2028, contracts must meet the new rules on working hours; on-call or zero-hours arrangements will only remain possible for a limited group of workers.

Which Legal Sources Govern Payrolling?

• Article 7:692 of the Dutch Civil Code, definition of the payroll agreement
• Article 7:692a of the Dutch Civil Code, special rules for payroll agreements
• Wet allocatie arbeidskrachten door intermediairs (Waadi), in particular Articles 8a and 12a
• Wet meer zekerheid flexwerkers (Bulletin of Acts and Decrees 2026, 205) and its entry into force (2026, 206)