Payrolling highly skilled migrants in the Netherlands? Pros, cons & risks in 2026
Wednesday 7 January 2026
When hiring highly skilled migrants, employers regularly use payroll arrangements. In such arrangements, the employment contract is formally concluded with a payroll company, which then seconds the employee to a client, who is actually in charge. Why do employers do this? Is this something for me? What are the risks involved, and how do I select a good payroll company for this? In this article, solicitor Arend van Rosmalen LL.M., partner at Orion Immigration Law, answers these questions.
Why do employers use payrolling for highly skilled migrants?
Payrolling is not unusual in the Netherlands and is certainly not used exclusively for foreign employees. Dutch employees are also often hired through temporary employment or payrolling arrangements, and the reasons employers have for doing so – primarily the search for flexibility – may well apply when it comes to foreign employees. However, immigration law naturally imposes conditions on the employment of highly skilled migrants, and payrolling can be useful in meeting those conditions (quickly). That is why employers specifically use payrolling for hiring highly skilled migrants.
Payrolling company as a recognised sponsor "by proxy"
How does this work exactly? The Foreign Nationals Employment Act (Wav) requires employers to be a so-called recognised sponsor in order to employ highly skilled migrants. Recognised sponsors are companies whose reliability and financial stability have been assessed by the Immigration and Naturalisation Service (IND). We will write a separate article about applying for recognition as a sponsor. In many cases, the application process is relatively straightforward, but questions may always arise. In any case, the application procedure takes time.
When is payrolling highly skilled migrants useful?
Employers use payrolling when they cannot or do not yet want to become a recognised sponsor themselves. This often concerns the following situations:
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First-time higer of a highly skilled migrant: If you, as an employer, want to hire a highly skilled migrant for the first time, chances are you are not yet a recognised sponsor. A payroll construction can be very useful in this case. After all, you want to be able to offer an employment contract quickly and also be able to offer your candidate a real prospect of a residence permit as a highly skilled migrant. By using payrolling, your candidate can start working for you quickly, and you can prepare an application for recognition as a sponsor while your candidate is already beginning their career with you.
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Startup company: It is often more complicated for young companies to be recognised as a sponsor. They need more documents than established companies to demonstrate their financial stability. As long as you are not yet a recognised sponsor as a start-up, you may want to use payrolling if you need highly skilled migrants.
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Foreign company without a branch in the Netherlands: Payrolling is also possible internationally, although additional conditions do apply. If, as a foreign company, you temporarily need people in the Netherlands, for example to carry out preliminary work for a possible branch, payrolling can be very useful. Payrolling allows you to save on setting up a branch and enables your highly skilled migrants to start working in the Netherlands quickly.
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Revocation of recognition as a sponsor: Do you disagree with the IND about the revocation of your recognition as a sponsor? If the IND and you fundamentally disagree about, for example, your financial stability, you could find yourself in serious trouble. After all, once your recognition as a sponsor has been revoked, your highly skilled migrants must immediately cease their work, even if you initiate legal proceedings against the IND's revocation of your recognition as a sponsor. You could try to apply to court for an order allowing your employees to keep working with you, but such a procedure is time-consuming and inevitably causes stress among your employees. In such a scenario, payrolling your highly skilled migrants could be a better, more frictionless option.
When is payrolling highly skilled migrants not allowed?
Please take note that we strongly advise against payrolling highly skilled migrants in the following situations:
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Payrolling highly skilled migrants without economic substance: We advise against any artificial construction where, for instance, a highly skilled migrant's salary is effectively being paid back, or where the actual work done by a Highly Skilled Migrant does not genuinely justify the cost of their salary (and the payrolling charges). Such constructions can quickly become risky and may well be deemed fraudulent when they emerge during an IND inspection. Stay clear of schemes that are overly creative and just resort to the practice of payrolling highly skilled migrants who are genuinely skilled employees.
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Payrolling highly skilled migrants who are business owners: Similarly, the practice of payrolling highly skilled migrants should not be used to bypass the immigration mechanisms that apply to business owners. A highly skilled migrant must be an employee and must not be in a position to determine their own salary. Payrolling a highly skilled migrant for the purpose of operating a business they (co-)own themselves, is not advisable as such a scheme could be deemed fraudulent when this emerges during an IND inspection.
Payrolling companies should in fact have measures in place preventing these situations, but in practice we do see that, occasionally, payrolling is still being misapplied in these ways. If you are a business owner and wish to obtain a residence permit, please read our article on residence permits for business owners.
Risks of payrolling highly skilled migrants: costs, lack of transparency & liability
In addition to the advantages, payrolling also has some significant disadvantages and risks:
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Costs: Payroll companies charge administrative costs on top of wage costs and high employer's contributions. Payrolling is therefore often a temporary solution. You get quick results (a residence permit for a temporary employee), and while your employee is already working for you, you can work on your own accreditation as a sponsor, for example. , which are passed on to the client.
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Limited transparency: As a hirer, you have limited information about the financial health of the payroll company. The fact that the payroll company is recognised as a sponsor in no way guarantees that it will remain financially healthy. For this reason, too, our advice is to consider payrolling as a temporary option.
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Legal liability: As a client, you remain jointly liable for compliance with the Wav. Errors or shortcomings on the part of the payroll company can also have major consequences for you as a client. Experience shows that not all recognised payroll companies are always able to prevent errors in the payroll of highly skilled migrants. In our opinion, this is a very fundamental disadvantage. It is advisable to select your payroll company very carefully (see below).
How to choose a reliable payroll company: 5 key checks
It is therefore very important that you can trust your payroll company. In practice, you will not be able to immediately check whether (and how) the payroll company ensures compliance with the Foreign Nationals Employment Act, while you and your employee will be liable for any damage if the payroll company makes a mistake. What should you look for when choosing a payroll company for your highly skilled migrants?
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Registration with the IND. The IND maintains a public register of recognised sponsors. Naturally, payroll services for highly skilled migrants only work if your payroll company is included in this register.
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Registration with the Stichting Normering Arbeid (SNA). The SNA awards a quality mark to employers who comply with labour legislation. Temporary employment agencies and payroll companies that want to be recognised as references must have this quality mark. If your payroll company does not have this quality mark, this is a risk because the IND could withdraw the payroll company's recognition as a reference.
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Check the inspection results of the Dutch Labour Inspectorate. The Dutch Labour Inspectorate publishes all identified violations of labour legislation, including violations of the Foreign Nationals Employment Act. Do you find a violation by the payroll company you have in mind? That is not a good sign. At the very least, you could ask a few specific questions about this. Bear in mind that if your payroll company makes a mistake when processing your highly skilled migrant's payroll, you too can expect a fine, and your company may also be publicly shamed by the Dutch Labour Inspectorate.
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Do the Waadi check at the Chamber of Commerce. Here you can check whether your payroll company is correctly registered in the Trade Register. If this is not the case, it is a bad sign. You run the risk of being fined yourself if you hire highly skilled migrants from a company that is not correctly registered.
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Assess the payroll company's working methods. Does your contact person ask you or you and your highly skilled migrant critical questions? Do you have to provide the payroll company with a CV, diploma and other relevant information about the position and the recruitment process? That may seem annoying, but it is actually a very good sign. Critical payroll companies take their responsibilities seriously. You would rather not entrust your own compliance with the Foreign Nationals Employment Act to a party that quickly signs an employment contract without asking any questions.
Is payrolling highly skilled migrants the solution for you?
Payrolling highly skilled migrants can offer an effective and efficient solution, particularly for employers who are not (yet) recognised as sponsors. Foreign employers who do not (yet) have a branch in the Netherlands can also make good use of this arrangement. The speed with which you can apply for a residence permit is an important advantage. However, the higher costs and limited transparency you have as a hirer require careful selection of the payroll company you wish to engage. By thoroughly selecting your payroll company and working closely with them, you can manage your risks effectively. In general, our advice is to consider payrolling as a useful but temporary solution.
Need advice about payrolling highly skilled migrants?
If you require specific advice about the topic of payrolling highly skilled migrants, please feel free to contact Orion Immigration Law. We can discuss your timelines, needs, look for alternatives, and assist you in selecting a payroll company if payrolling is the best solution for you.
Arend van Rosmalen LL.M.
Arend van Rosmalen LL.M. is a partner and co-founder of Orion Immigration Law. He advises both business clients and private individuals. Arend advises and assists with applications, but is also a highly experienced litigator. Arend has represented clients in Dutch objection and (higher) appeal cases, and has even appeared before the Grand Chamber of the Court of Justice of the European Union.
