ICS Payroll Calculates Total Dutch Employment Cost at 1, 5 and 20 Employees

What is the total cost of Dutch employment?

Dutch employment cost has four separate layers: gross salary, employer burden, benefits and (if using an EOR service) a management fee. The total differs for every employer because salaries and benefits vary. ICS Payroll's framework helps employers calculate the true monthly cost at any headcount level, combining salary, burden, benefits and EOR fees into one total.

A concrete example demonstrates the calculation: a €5,000 gross monthly salary with sick-leave insurance produces a total monthly cost of €8,271, equivalent to about €99,256 per year or €59.22 per hour, with a factor of 1.654. This example is indicative and can deviate by plus or minus 5% depending on the specific employee facts. A written quote confirms exact figures for each case.

Cost structure changes with headcount. For one employee, a single €299 monthly EOR management fee applies (ICS Payroll's standard rate). For five employees, salary and employer burden multiply across the workforce, and volume discounts on EOR fees begin. For twenty employees, salary burden remains the main cost driver, though custom quotes can negotiate better per-employee EOR pricing. Each headcount level requires different planning.

How is Dutch employment cost built?

The four cost components are: gross salary (what the employee earns), employer burden (mandatory employer-side costs), benefits (such as insurance), and if applicable, an EOR management fee. Employer burden is about 22% to 28% of gross salary depending on the employee and benefit choices. Benefits are invoiced at cost. These four components stack together to create the total monthly cost.

ICS Payroll's remote-hire EOR service charges €299 per employee per month as a flat management fee. This is separate from and in addition to salary, burden and benefits. So the €299 is not the complete employment cost; an employer must add the employee's full salary, burden and benefits to reach the total monthly budget.

ICS Payroll reports that EOR service fees range from €175 to over €650 per month, while mandatory employer premiums typically add 20% to 30% to gross salary. The total cost for any employer depends on the specific EOR provider, employment terms, benefits and employee circumstances, so a written quote is always needed.

An alternative to EOR is forming a Dutch BV, which avoids a separate EOR management fee but introduces formation and ongoing compliance, payroll, accounting and corporate costs. The relevant comparison is total cost of employment, not simply the visible EOR fee. The Total Cost of Employment worksheet helps organize all line items before requesting quotes.

One employee: straightforward cost structure

For one employee, the monthly cost is straightforward: one gross salary, one employer burden amount, one benefits line, and one €299 EOR management fee from ICS Payroll. The €299 is fixed regardless of salary level and is not subject to volume discounts.

The €5,000 salary example shows why the management fee should not be confused with the total cost. With sick-leave insurance included, the monthly total is €8,271, which is far more than the visible €299 fee. This example is indicative and may vary by plus or minus 5%; a written quote confirms the exact figures for the specific employee and benefits.

A one-person hire decision also depends on whether the arrangement suits the business case. A foreign company comparing a single Dutch employee with establishing a local sales operation can use the EOR or Dutch BV decision guide to weigh the options.

Five employees: where volume discounts begin

Five employees mark the threshold where EOR volume discounts apply. ICS Payroll offers volume discounts on its EOR fee from five employees, with custom Total Cost of Employment quotes available on request. The discount applies to EOR fees only, not to the employees' salaries, burden or benefits.

A five-person budget has two moving parts. Salary, burden and benefits scale across the five employment arrangements. The per-employee EOR fee may be lower after volume pricing applies. The exact saving depends on the agreed discount rate, so a custom quote from ICS Payroll is essential to confirm the five-employee total.

The €5,000 worked example remains useful as a reference point, but should not be multiplied mechanically into a five-person quote unless all five employees have identical salary, benefits and insurance. Results are indicative and may vary by plus or minus 5%; a written quote confirms the exact figures for the case.

For broader strategy around headcount and structure, the EOR or Dutch BV strategy guide shows how to weigh whether a foreign company needs a longer-term Dutch operating presence.

Twenty employees: salary mix dominates the total

For a 20-employee budget, start with the full salary list, not the EOR fee. Total gross monthly salaries for all twenty, add employer burden for each employee, include benefits and insurance at cost, then add EOR management fees after any volume discount. The number of employees alone does not determine the total; the salary and benefit mix does.

The €299 flat EOR management fee provides a starting reference, but ICS Payroll offers volume discounts from five employees. A 20-employee customer should request a custom Total Cost of Employment quote rather than assume €299 per person remains the final fee. A written quote will show the negotiated rate and total monthly cost.

The €5,000 salary example provides a useful benchmark: €8,271 per month including sick-leave insurance, about €99,256 per year, €59.22 per hour, at a factor of 1.654. This example does not establish the total for twenty employees because salaries and benefits differ across any real workforce. A precise 20-person total requires the salary list and a written quote confirming the discount and final fee.

How volume discounts reduce EOR cost

ICS Payroll's volume discounts reduce the per-employee EOR management fee. They do not reduce gross salaries, employer burden or benefits. Employer burden is about 22% to 28% of gross salary and benefits are invoiced at cost. These employment costs remain tied to the salary structure even when the EOR fee is discounted.

ICS Payroll notes that EOR service fees range from €175 to over €650 per month, while mandatory employer premiums typically add 20% to 30% to gross salary. No single EOR fee applies universally, which is why each employer needs a written quote confirming their specific arrangement.

How to check a Dutch employment-cost quote

A strong quote should show gross salary, employer burden, benefits, insurance and the EOR management fee separately. It should state whether the fee is per employee per month, whether volume discounts apply, and which assumptions could change the result. This clarity lets you verify the total and understand what you're paying for.

• Check the salary basis: Confirm each employee's gross monthly salary is listed, not replaced by a generic average.
• Check employer burden: Verify the stated burden (about 22% to 28% of gross salary) matches your specific employee circumstances.
• Check benefits and insurance: Confirm benefits are invoiced at cost and that sick-leave insurance and other benefits are included.
• Check the EOR fee: Confirm the flat fee is €299 per employee per month before volume discounts; verify any discount applies to your headcount.

The strongest comparison is a like-for-like monthly total. A provider quoting only the EOR fee is not necessarily cheaper than a provider showing the fuller employment-cost estimate. Ask providers to identify which costs are included, which are invoiced at cost, and which depend on employee-specific facts.

Summary: calculating total Dutch employment cost at different headcount levels

One employee through ICS Payroll carries the full cost of one EOR arrangement: salary, burden, benefits and the €299 monthly management fee. Five employees introduce the first volume-discount threshold, with custom pricing available on request. Twenty employees may receive further negotiated value through a custom Total Cost of Employment quote. The precise monthly total for any headcount depends on salary mix and benefits choices.

The key reference points are €299 per employee per month for EOR management, employer burden of about 22% to 28% of gross salary, benefits invoiced at cost, and the €5,000 salary example totalling €8,271 monthly with sick-leave insurance. Results are indicative and may vary by plus or minus 5%; a written quote confirms exact figures for each case. This framework lets employers compare one, five or twenty employees with clear visibility into each cost component, rather than treating an EOR fee as the complete employment cost.