Prinsjesdag 2025: How the New Budget Will Impact Your Wallet

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Gino Peters

Written By:

Gino Peters

Reviewed By: Belinda E.

June 3, 2026 5:49 pm

Category Tag: News

The rise of remote work made international expansion much easier in recent years, but hiring abroad still comes with legal and administrative complexity, as every country has its own labour laws and payroll rules that must be followed. In addition, not many companies can open a new entity in every new market that they are expanding into. That is when the Employer of Record (EOR) solution comes in handy.

The EOR serves as the legal employer on paper, while the client company manages important activities related to the employees responsibilities and performance.

In this guide we will cover what an employer of record is, how it works in detail, how much it can cost and which business should consider an EOR solution.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third party service provider that legally employs a person on behalf of another company in the country where the employee officially resides. As an official employer the responsibilities of EOR include issuance of an employment contract, processing payroll and withholding taxes and necessary social security contributions, as well as preparation of offboarding documents or any documentation that need to be signed by the employer. In addition, EOR ensures the compliance with local labour laws and serves as a first point of contact for any legal disputes.

The client company that hired the employee through an EOR also has a list of responsibilities. As an Employer of Record does not have the visibility on operational activities behind the scenes a client company needs to provide direction and ensure proper team integration.

In simple terms, the EOR provider acts as a legal employer in the country of the employee’s residence, while the client company takes on day-to-day manager work.

Responsibility	Employer of Record (EOR)	Client Company
Employment contracts & any other official documentation
Payroll processing
Income tax & social security contributions
Compliance with local labour laws
Statutory benefits administration
Managing daily work and projects
Setting goals and performance expectations
Providing equipment and tools
Leading the employee’s team and workflow

Employer of Record solutions gain more and more popularity in the field of global expansion as they allow businesses to hire best candidates fast and easy while staying compliant with local employment regulations. More information about EOR service are available if you would like to understand more.

EOR Meaning

The term “EOR” is the abbreviation for Employer of Record.

Employer in this instance stands for the company that hires the employee and takes on duties related to it, such as onboarding and offboarding process, payment of wages and compliance with other legal requirements.

“Record” from the EOR perspective refers to official registration with government authorities. The name of the EOR provider is stated in all payslips and tax filings, and should also be listed by the employee in any documents where employer must be stated, such as mortgage or loan applications.

One might ask a question of why this legal structure exists. As it is not possible to provide an employment contract directly to a person that legally resides in another country, the business expanding abroad typically needs to establish a local entity. That involves legal registration, arrangement of local bank accounts and organisation of payroll structure, as well as compliance with local law.

EOR allows to simplify the global hiring and reduce administrative burden through their existing legal entity.

There are some other hiring models that can be confused with EOR.

EOR and PEO

Many sources online refer to EOR as “international PEO”, which may create confusion as these models have 1 important difference.

A Professional Employer Organisation (PEO) serves as a co-employer of a client company. In other words, a business must already have an established entity in the country. The hiring tasks are, therefore, shared between 2 companies, while legal liability stays only with the client company. In the EOR model all legal risks are being taken by the official employer. Read more about the difference between PEO and EOR here.

EOR and staffing agency

Staffing companies mainly provide assistance for short-term projects by providing temporary workers. If the client wishes to employ a person for a longer time, EOR approach must be chosen.

EOR and contractor model

Contractor agreements assume the involvement of independent workers rather than employees. This model is also often used for temporary, project-based assignments. It is important to remember that there is a big misclassification risk between a contractor and an employee in the company which can lead to potential legal issues. An EOR ensures that employment is legally compliant with local labour law.

How does an Employer of Record work?

While it may sound complicated at first, a process behind the employer of record model is relatively straightforward.

The operating company selects a candidate

The client company recruits the employee they want to hire in another country

The EOR becomes the legal employer & local employment contract is issued

The Employer of Record uses its local legal entity to prepare and issue an employment contract that complies with labour law of the country where the employee is based. Depending on case-by- case situation, the work visa might need to be secured beforehand. Our company provides immigration services, more details can be found here.

Payroll and taxes are managed

The EOR takes on recurring responsibilities related to a payroll and ensures correct processing of income tax, social security contributions etc

Benefits are administered

Paid leave, sick leave, pension contributions and any other statutory benefits are being managed by the EOR.

Ongoing compliance and HR support

It is the responsibility of the EOR to monitor changes in local labour law and ensure ongoing compliance.

Example:

Imagine a UK-based tech company found a perfect candidate in Germany for a position of a software developer.

Instead of going through the administrative burden of opening a legal entity in Germany, the company chooses to work with an Employer of Record. The EOR hires the developer under a German employment contract and manages payroll and taxes. At the same time the UK company welcomes the new employee in the team and manages the daily work of a developer.

What services does an Employer of Record provide?

The Employer of Record does more than just providing an employment contract to the employee. Typically a wide range of HR and compliance services is included in the EOR offer. For example, read about the services included in our EOR package here.

Employment and HR administration

Locally compliant employment contracts and support with other documents requested by authorities
Employee onboarding
Employee record management. For example, control over PTO

Payroll and tax management

Regular payroll processing
Tax withholding and reporting of social security contributions with authorities
Payslip generation and creation of annual wage tax certificates

Benefits administration

Management of statutory benefits
Pension contributions (where required)
Support with benefits such as maternity leave allowance, sick leave allowance etc

Compliance and risk management

Insuring compliance with local labour law
Management of onboarding and offboarding processes
Representation in difficult legal and court cases

Additional services:

Some EOR providers ( such as ThisWorks EOR Services) provide additional services such as:

Work permit and dependent visa support
Background checks
Relocation support
Value added services: support with housing, company car, banking, etc ( depending on the country).

This vast list of services allows businesses to manage international teams, while staying compliant and avoiding complex local employment administration.

Benefits of using an EOR service

There are multiple advantages the businesses can get from working with an Employer of Record provider.

Faster global hiring

Setting up a new entity can take up to several months. With an EOR the hiring process can take several days.

Reduced compliance risk

A trustworthy EOR provider ensures the compliance with all local regulations. As the labour law varies greatly between countries, having a knowledgeable party to rely on can make a big difference.

Lower expansion costs

Establishment of a new entity is not only a time-consuming process, but also costly. With EOR services these costs can be avoided.

Access to global talent

The location of a remote candidate is not a problem if the company uses Employer of Record services. In other words, the best candidate for specific business purposes can be chosen.

Scalable hiring model

EOR services are ideal for organisations that want to scale international hiring quickly. They are particularly useful in the following situations:

Remote-first teams and organisations
Companies testing new markets abroad
Startups expanding internationally

How to choose the right Employer of Record

Choosing between several EOR providers is important, as it influences not only compliance, but also employee experience for new hires and how your company is perceived on the job market.

Here are some important things to keep in mind when deciding on your EOR partner:

Geographic coverage

Make sure that EOR provider can cover the country where you want to expand globally. Read about our EOR coverage here.

Pricing transparency

Check that EOR provider does not have any hidden costs and the pricing is clearly outlined in your MSA.

Compliance expertise

A strong EOR provider should have a team of experienced local HR specialists who understands all in and outs of a national labour law.

In-house vs partner model

Some EOR providers rely on their third-party partners, while others manage employment directly through their own local entities.

Customer support

It is important to find a EOR partner that helps with any questions or concerns in a quick and professional manner. That can be crucial when dealing with employee offboarding or any legal disputes.

Warning signs

Understanding the importance of choosing a right party, your company should be cautious of providers that lack local expertise and cannot give clear answers to your labour law questions. In addition, companies with slow response times can prove to be unreliable in critical situations. Furthermore, providers with complex pricing models with many hidden fees can create a lack of cost transparency and result in unforeseen expenses.

By selecting a provider with strong expertise in local labour law and reliable support from dedicated teams, your company can ensure a smooth international growth. Learn why companies choose ThisWorks as their EOR partner.

How much does an employer of record cost

The vast coverage of services the employer of record provides makes many businesses ask how much an EOR costs.

Pricing models vary greatly on the provider and the country of coverage, but most EORs use one or more of the following structures.

Flat monthly fee per employee.

The EOR provider charges a fixed monthly fee for each employee they have on the payroll from the client.

Percentage of salary

While not being a popular approach, some EOR providers charge a percentage of the employee’s salary, typically ranging between 5%-15%.

Setup fees

Some providers charge onboarding or offboarding fee for each employee.

The fee that the business needs to pay to an EOR provider also depend on the location of a service. Local labour law complexity of some countries can influence the fee. In addition, some countries have specific statutory benefits and payroll administration requirements. Furthermore, employee headcount in the specific location can influence the fee.

EOR vs setting up a legal entity

To establish a new entity the organisations needs to go through legal and tax registration. In addition, accounting support and ongoing compliance costs such as the fees for local labour lawyers can make setting up a legal entity significantly more expensive.

An EOR allows companies to expand globally without these upfront investments.

EOR vs hiring contractors

Some businesses decide to hire international workers as contractors. However, this approach can often lead to a misclassification risk, which can cause legal and tax liabilities.

A professional EOR provider ensures that the new starters are compliantly onboarded under local employment regulations.

EOR FAQs

Is an EOR the same as a PEO?

No. PEO model assumes co-employment and requires the business to already have established local entity, while EOR employs new talents through its own entity only.

Can an EOR hire contractors?

While some EOR providers can support hiring contractors, it is important to remember that main function of EOR is the employment of full-time workers legally in a country. A risk of misclassification between EOR and contractor should be also considered carefully.

Is an employer of record legal?

Yes, when established and structured properly, Employer of Record entities are legal and widely used for international expansion by many companies.

When should you use an EOR?

The most common reason for using EOR include:

Hiring employees located in another countries remotely
Testing new markets before establishing an entity
Expanding internationally

Can you switch from EOR to your own entity?

Yes. Many companies initially hire through an EOR for the ease and speed of expansion and later transition employees to own legal entities upon their establishment. It is important to remember that some countries require specific procedure to be followed in such a scenario.

Get in touch with ThisWorks

Expanding your team globally does not need to be long and administratively complex.

With the use of Employer of Record the businesses can have access to the best talent from around the world while ensuring full compliance with local labour laws.

ThisWorks can support your global expansion with our compliant Employer of Record services.

Contact our team to find our how we can help your international team glow fast and compliantly!

On the third Tuesday of September, every year, the Netherlands celebrates Prinsjesdag (Netherlands Budget Day) which dates back to the 18th century. This day, the Dutch King presents the financial plans of the government for the next year in the Ridderzaal (Hall of Knights) in The Hague. The ceremony is characterised by the pageantry that includes the Speech of the King, horse-drawn carriages and the opening of the parliamentary year. However, beyond the show lies the actual meaning; the release of the Dutch budget, which affects the citizens, residents and the economy at large.

In the case ofPrinsjesdag 2025, the announcements have a specific weight due to the failed Schoof I government and the unpredictable political situation preceding the elections in October. This does not only symbolise it to Dutch nationals, but also expats; it has a direct impact on expats ‘ income, taxes, healthcare, housing, education and long-term opportunities. TheDutch budget 2025 is thus significant for an individual intending to invest in the Netherlands’ budgetary prospects.

Political Context of Prinsjesdag 2025

The political situation predetermines this prudent and interim budget. The Schoof I cabinet collapse, led by Prime Minister Dick Schoof, had fallen earlier this year after coalition members PVV and NSC pulled out. The only thing that is left is a weak coalition of VVD and BBB, having only 32 seats in parliament. This small status allows only radical reforms, and the government is forced to introduce a safe budget, which is more focused on stability and consensus.

This was a sensitive moment that was recognized in the annual speech of the King, who said: “We cannot suspend the everyday worries of people. In Dutch politics 2025, this budget is like a transition – stable enough to continue the regular operations of the government, but able to change with the new political developments which will happen after elections on October 29, 2025.” To most people, it is a delicate balancing act of ensuring that the citizens are at ease without being embroiled in political wars that may undermine vital initiatives.

Purchasing Power and Income in 2026

Purchasing power is one of the most pressing issues for both residents and expats. The projected growth in dutch purchasing power 2026of the government is average +1.3% in 2026, which is divided into the following:

Workers: +1.2%
Benefit recipients: +1.3%
Pensioners: +1.5%

This implies that there should be a slight increase in the disposable income among the majority of households, though not significant. To the workers, the rise indicates continuous wage increment whereas recipients of the benefits will experience an increment in their allowances to offset the cost-of-living pressures. Pensioners who are challenged by the different problems associated with inflation and fixed incomes are the greatest beneficiaries.

This is an essential projection to the income growth Netherlands. Most expatriates move to seek employment opportunities, but also have to pay high prices of living in the Dutch cities. Even discretion in terms of purchasing power can serve to compensate for the rise in housing, utility and grocery costs.

Income Tax and VAT Updates

Taxes still dominate the budget. The good news is that one of the proposed increases in VAT in the Netherlands for 2025- 2026on cultural goods and services was scrapped. Books, concerts and museums will also be subjected to the lower VAT rate of 9 per cent, which will allow the Dutch cultural sector to flourish as it will still be affordable to the population. This is a relief to the families and the expatriates who know about culture.

On the revenue side, the image is more complicated. The government declared some changes to Dutch income tax 2026:

First bracket: EUR38,441 – EUR38,883
Second bracket: EUR76,817 – EUR79,137

These thresholds are on the increase, although the government is not fully implementing inflation correction. This implies that a large number of taxpayers will be subjected to the fiscal drag, in which their income grows, but the tax bracket does not keep pace with the inflation rate, causing the effective tax to rise accordingly. To middle-income earners and expats, this can offset the optimistic side of the salary increase.

Travel and Flight Tax Adjustments

In the case of internationally mobile individuals, the Netherlands’ flight tax 2026 is one of the most noticeable changes. The government is imposing a distance-based tax on long-haul travel tax Netherlands. The total departure tax charged to passengers flying to the United States, Mexico, South Africa and Asia would increase to EUR70.86, depending on the destination.

This is especially applicable to the expats as most of them travel often, either on work or family grounds. As an illustration, a Dutch-American family visiting family in the U.S. may face hundreds of euros of extra money spent every year. Although the government is making this decision sound like a move towards sustainability and lowering the level of emissions of the aviation sector, international travellers are left with the heavy financial impact.

Healthcare in 2026

Healthcare is already one of the foundations of the Dutch welfare state, and in 2026, it is proposed to make the following changes:

Healthcare premiums: Dutch healthcare premiums 2026 will increase by approximately EUR 3 per month.
Eigen risico (compulsory deductible): is kept at EUR385/year.

This combination brings predictability to residents and also to the expats. Although there is a rise in premiums, the eigen risico Netherlands is stable to make sure that the household will not experience any unexpected increases in the out-of-pocket expenditure. The changes are a continuum to the expats who have to maneuver through the health insurance in the Netherlands, which is obligatory as long as one resides in the country.

Education Investments

The government has reemphasized the issue of equal opportunity in education. The intended reductions to the Educational Opportunities Scheme are no longer, and thus, they still support disadvantaged families. The program is crucial to assist children from lower-income backgrounds in receiving quality education and other resources.

To the expat families, this is an indication of a greater support system in the Dutch schools. The Dutch education budget 2026 has been issued, so that Schools may offer more resources, tutoring and integration services with more spending. This will generate a situation in which children with an international background will be allowed to flourish with their Dutch counterparts, and social cohesion in the long term will be solidified.

Technology and Innovation Funding

One of the best aspects of Prinsjesdag 2025 is the risky investment of the government in the tech sector. The Netherlands tech industry budget is all set to become a European leader in technology, with 430 million to be allocated to innovation in 2026. The investments will focus on artificial intelligence, green technology, and other high-tech manufacturing.

This is a significant opportunity to the expat tech professionals. The Dutch innovation funding 2026 has been traditionally based on foreign talent to support innovation, and the new funds will win employment, research, and startups. Starting with high-tech campus at Eindhoven and fintech ecosystem at Amsterdam, expat tech jobs Netherlands will have more and more opportunities in the innovative industries.

Budget Debate and Next Steps

Whilst the King sets the agenda, it is in the Dutch budget debate 2025 that the details are analysed. The Prime Minister Schoof is going to defend the budget in parliament on September 18 and 19. However, as the elections in the Netherlands in October 2025 will take place on October 29, 2025, the destiny of the budget will likely be determined mainly by following the political realignments.

In the case of the expats, this implies that specific measures that are being articulated today might be changed or remodelled by a new government after being in office. Following political events in the Netherlands will be important in staying up to date with the changes that will occur in the future in terms of taxation, housing and immigration policy.

Work and Grow with ThisWorks

To the expats, the Dutch budget is not just a piece of paper, but a map of how to go through life and develop as a professional. At ThisWorks, we are aware of the difficulties in adjusting to a new country, including the tax issue and healthcare. This is why we are keen on the development of a multilingual and diverse workplace that would allow international professionals to succeed.

You are planning to expand to the Netherlands? Contact our experts today and get into a community of supportive people where your talent on a global scale can collaborate, innovate, and develop together.

FAQs about Prinsjesdag 2025 and the Dutch Budget

Q1. What is Prinsjesdag in the Netherlands?

Prinsjesdag (Budget Day) takes place every third Tuesday of September, when the King presents the government’s budget and opens the new parliamentary year.

Q2. Does the 2025 budget include major changes for expats?

No direct changes target expats, but adjustments in tax brackets, healthcare premiums, and flight taxes will indirectly affect them.

Q3. What happens to the 30% ruling for expats?

The 30% ruling remains unchanged in 2025 and 2026. From 2027, however, the benefit will be reduced to 27%.

Q4. How will income tax change in 2026?

Tax brackets are being raised slightly, but without full inflation correction, meaning some taxpayers may face higher effective rates.

Q5. What are the biggest benefits of the 2026 budget?

Expanded housing allowance, reversal of education cuts, significant funding for technology and innovation, and scrapping of the VAT hike on cultural services.

Q6. How will healthcare costs change?

Premiums will rise by about €3 per month, while the eigen risico remains unchanged at €385 per year.

Q7. Will travel from the Netherlands become more expensive?

Yes. Long-haul travellers will face new distance-based flight taxes, potentially adding up to €70.86 per ticket.

Q8. What’s next for the Dutch budget after Prinsjesdag?

The budget will be debated in parliament on September 18–19. The October elections could lead to revisions or new priorities.

Q9. How does Prinsjesdag affect expat salaries in the Netherlands?

With modest increases in purchasing power and fiscal drag from unindexed tax brackets, expat salaries may stretch slightly further in 2026, but not dramatically.

Q10. Why should internationals care about Prinsjesdag?

Because it directly affects the cost of living, from healthcare and housing to travel expenses and job market opportunities.

Conclusion

Prinsjesdag 2025 summary can be characterised as transitional, wary, and aimed at being stable when the country experiences political uncertainty. Its actions are not radical, yet far-reaching in real life. Key takeaways include:

Minor growth in the buying power of all groups.
An added long-haul flight charge increases the expenses of travelling for the expats.
Changes in moderate premiums of healthcare, yet a constant deductible
Increased housing allowance and subsidies to younger tenants.
More funding for education for low-income families.
Heavy investment in innovation and technology.

The Dutch budget 2026 is concerned with continuity pending the result of the elections. The Netherlands’ economic outlook has proved to be resilient despite a failed cabinet and dwindling coalitions as it invests in people, its publicly funded services, and the economy.

To expats, the message is simple: the Netherlands is still a land of opportunity with a balance between stability and prospective investments. As a student, as a business person or a family and you are constructing a future here Prinsjesdag 2025 outlines the challenges, opportunities and optimism that characterise the Dutch way forward.