PAYROLL WORKFLOW
With payrolling, you hire staff based on a payroll agreement, in partnership with a payroll company. A payroll agreement is an employment contract between three parties: the employee, the client (you) and the legal employer (the payroll company). In practice, this looks like this:
The client (you):
- Recruits and selects the employee.
- Makes work arrangements among yourselves (think salary, duties and work scope).
- Directs the employee on the work floor.
- Determines the duration of collaboration with the employee.
- Enters into a hiring agreement with the payroll company.
The emoployee:
- Works exclusively for your company.
- Enters into an employment contract with the payroll company.
- Is on the payroll at the payroll company.
- Is paid according to your company's compensation plan or applicable collective bargaining agreement.
- Benefits from additional secondary employment conditions with a good payroll company.
The payroll company:
The payroll company enters a hiring agreement with you and a payroll agreement (containing the work arrangements made by you and the employee) with the employee. Then, as legal employer, the payroll company takes over the associated employer tasks and risks, such as:
- Payroll.
- Wage payment and pre-funding.
- Premiums and payroll taxes.
- Providing paychecks.
- Contract Management.
- Pension accrual.
- Process sick and return-to-work notifications.
- Continued payment in case of illness.
PAYROLL FACTS
Originated on a beer coaster
Payrolling originated in 1992 on the back of a beer coaster in a soccer canteen in Spaarnwoude. Two friends at the time asked themselves the question, "How do we as a music band get paid faster and how does everyone get a fair share without too much hassle around administration and tax issues?".
Payroll service for artists The friends came up with the idea of a payroll service for artists. On the beer coaster they worked out the business plan and not much later they founded the company Payrolling Services (shortly thereafter Tentoo). The very first payroll provider in the Netherlands was born.
Freelance and MKB Payrolling quickly grew from a payrolling service for freelancers to a payrolling service for freelancers and SMEs. Now, 31 years later, hundreds of thousands of entrepreneurs in the Netherlands are relieved of their worries through payrolling and/or temping.
Confusing payroll
When you talk about payroll abroad, they also immediately think of a payroll or a paycheck.
Payroll Salary administration agencies in the Netherlands also often say they do "payroll". This might be true, but it sometimes causes confusion. With payrolling services, as explained at the top of this page, performing payroll administration is just one of many activities. Payrolling goes far beyond performing payroll for an employer; the employees actually end up on the payroll of the payroll company.
Freelancers Freelancers also often say they are using payroll services. In that case, they usually work on the basis of a contract of assignment, where the freelancer is also on the payroll of the payroll company. That's why this is still commonly referred to as payrolling in everyday language.
