New starting employee tax obligations is about the obligations the employer needs to meet in order to correctly start the employment.
New starting employee tax obligations
The moment a new employee starts, the wage tax form needs to be completed. The wage tax form is a form in which is stated the contact details of the employee, the Dutch tax number, date of birth. The most important part is ticking the box yes or no. The yes or no is about yes open to general tax credits, or no, not open to general tax credits.
A regular employee with one employer always ticks yes. An employee that has another source of income next to this employment needs to think which organization can use them. A tax credit can only be used one time, so maybe a no should be ticked in a multiple source income situation.
The wage tax handbook states that this wage tax form cannot be signed later than the first day of employment. If done later, for the period the form was not completed the anonymous wage tax rate needs to be applied. Anonymous sounds nice, but it is absolutely not.
The employment agreement can be a verbal agreement or written agreement. Only a shareholder director does not have this choice, that always needs to be in writing.
A verbal agreement is in fact an indefinite employment agreement. Not many employers are brave enough for a verbal employment agreement, hence nearly all are in writing.
The moment the employee starts, you needs to make sure the agreement is signed. Not every employee meets the requirements. For that purpose the trial period exists, but if nothing was signed and the employee is gone during the trial period and maybe on a bad foot, the employer has issues.
Hence, make sure the employment agreement is signed.
The new employee started and it became quickly obvious, the employee is no match for the company. Employee is asked to leave not to return. Never a nice moment.
This unpleasant feeling the employer can stretch by not having the bank details. The employer is obliged to pay for the salary. Now this employer needs to connect to the dismissed employee for bank details.
Make sure the day the employee starts, the employer is aware of the IBAN bank details of the employee. Good for both parties.
Tax is exciting
We think tax is exciting. Hiring employees gets us excited as well, as that implies your company is in development. Employment implies formalities. We advocate the employers to be on top of their game. Have the wage tax form completed, employment contract signed and the bank details ready. That is a good start of a new employment.