Working in the Netherlands through an HSM payroll company

Feb 27, 2024

If you want to work in the Netherlands as a non-EU national, you will most likely wind up in a Highly Skilled Migrant (“HSM”) employment situation. The HSM employment offers you, as a non-EU employee, the right to work and reside in the Netherlands. Under HSM, you are also allowed to bring your wife and children, and apply for a 30% ruling (if you meet those requirements). The main thing about the HSM visa is that it’s tied to your employment, and your employer must have a special HSM sponsorship status from the Dutch IND. This means that not anybody can hire you under an HSM visa, and also that you must remain in that employment if you want to keep working and residing in the Netherlands. If you want to switch to another employer, that employer must hire you either under the HSM visa (which requires them to have a HSM sponsorship status) or an EU Blue Card (which does not require that sponsorship status, but has higher criteria).

If you decide to terminate your HSM employment (or your employer has decided that for you), you have a 3-month grace period to find new HSM employment at another employer with HSM sponsorship status. If you want to switch to another visa, the 3-month grace period does not apply. If you made this mistake (and you’re not the only one) this does not mean you will be shipped out of the country, but your timer towards 5 years for permanent residency will be reset to zero.

If you find yourself in a situation where your current HSM employment or the subsequent grace period ends, and you do not have a new HSM employment lined up, your visa situation could be salvaged by entering into a so-called HSM payroll construction at an Employer of Record (EOR) or “umbrella company”. In this setup you would enter into the employment of the payroll company, where you are a salaried employee under the HSM visa. Here, you receive a salary and a 30% ruling can be applied to it. The payroll company of course needs to be paid for its services and your salary. Depending on your setup, this can be done in multiple ways. If you want to work as a private contractor, you can let the umbrella company invoice your clients and use those revenues to pay your salary. If you want to work for a foreign company that does not have a subsidiary in the Netherlands, you can let the payroll company invoice that foreign company.

So it’s important that you have a client or a foreign company paying your salary and payrolling costs. In addition to this, you of course need to meet the HSM requirements:

  • Sufficient monthly salary ( < 30 years: € 3,909 | > 30 years: € 5,331 | post orientation year € 2,801, all exc. 8% holiday allowance )

  • Bachelor or equivalent 3 year diploma (desired)

  • Specialized skills that are scarce in the Dutch market, such as IT, engineering or science. Notable exclusions are commercial, marketing and sales roles.

The HSM payroll situation is a very fast and flexible solution that may save your visa situation, your 30% ruling and your family life in the Netherlands. The downside is that it’s more expensive, because you need to pay for the payrolling costs, and you don’t have your own company in which you can expense your business expenses. If you’re okay with that, it’s worth looking into the HSM payroll construction.