Self-employment or employment: which to choose?

Six key differences between self-employment and employment

The main difference between self-employment and employment lies in how parties work together and the contractual agreements they make. An employee works under an employment relationship. An employment contract covers authority, wages and protection against dismissal. A contract for services, on the other hand, covers the provision of specific services outside an employment relationship. The professional receives payment based on agreed terms and takes on more personal responsibility. This affects costs, risks, flexibility and intellectual property (IP) rights. Under an employment contract, rights to software, for example, often automatically belong to the employer. Under a contract for services, these rights need to be agreed separately.

Organisations looking to hire a self-employed professional or recruit an employee benefit from HeadFirst's expertise in connecting professionals, suppliers and clients. Through Vertage's network, more than 30,000 professionals work with clients across various sectors every day.

What rights does an employment contract automatically provide?

An employment contract automatically provides rights such as continued salary payments during illness, paid holiday entitlement and pension contributions. Employees also receive protection through minimum wage legislation and, where applicable, collective labour agreements (CLAs). These rights carry significant weight when choosing between self-employment and employment. They are required by law and cannot be freely negotiated. Dismissal is only permitted on statutory grounds or with the required authorisation. This provides security while limiting flexibility to some extent.

Freedom and personal responsibility under a contract for services

Under a contract for services, you decide how and when you work, without being subject to employer authority. This freedom also comes with personal responsibility. If you fail to deliver the agreed result, you may bear the financial consequences as a self-employed professional. An employee retains the right to receive their salary during illness or periods of underperformance. This balance between freedom and risk is an important factor when choosing between self-employment and employment.

False self-employment: the actual working relationship matters

When choosing between self-employment and employment, the risk of false self-employment is an important consideration. This occurs when a self-employed professional effectively works as an employee. The risk primarily lies with the organisation engaging the professional. In cases involving an intermediary or brokerage arrangement, the intermediary initially carries the risk because it is the contracting party. The Dutch Tax Administration (Belastingdienst) assesses the actual working relationship and how the parties work together in practice. It determines whether false self-employment is involved.

Whether someone qualifies as self-employed or is effectively an employee is assessed under the Dutch Civil Code and relevant case law, including the Deliveroo ruling. Since 1 January 2025, the Dutch Tax Administration has resumed full enforcement against false self-employment. From 31 December 2026, a legal presumption of employment based on an hourly rate will also take effect. Professionals earning up to €38 per hour can invoke this presumption. The client must then demonstrate that no employment relationship exists.

What does the legal presumption mean for hourly rates below €38?

Professionals earning less than €38 per hour can invoke the legal presumption that an employment relationship exists. This does not mean that everyone earning below this threshold automatically becomes an employee or is prohibited from working as a self-employed professional. If a professional invokes this legal presumption, for example in court proceedings, the client must demonstrate that no employment relationship exists. The court examines the actual working relationship, including the level of independence and entrepreneurial risk.

Is there a safe maximum hiring period?

No fixed maximum period exists. The actual working relationship matters, not the length of the contract. How long you can hire a self-employed professional depends on the nature of the work, the hourly rate, the duration and the professional's wider business activities. In March 2026, the clarification section of the VBAR legislative proposal was withdrawn. The legal presumption of employment for lower hourly rates continued as a separate measure. This is relevant when choosing between self-employment and employment.

What is your net income as a self-employed professional or employee?

Your net income as a self-employed professional or employee depends on more than your hourly rate or gross salary. Employees build up pension entitlements, receive continued salary payments during illness and benefit from employer contributions on top of their gross salary. Self-employed professionals arrange these matters themselves. They may also need to take out disability insurance due to the planned disability insurance requirement for self-employed professionals. This obligation is expected to require insurance against disability from 2030 onwards.

Comparing self-employment and employment based solely on hourly rates therefore gives an incomplete picture. Your net financial benefit depends on billable hours, potential disability insurance costs and the other expenses outlined in the cost comparison further down this page.

Why can't you compare an hourly rate directly with a monthly salary?

An hourly rate consists of different components from a monthly salary. This means the two cannot be compared on a one-to-one basis when choosing between self-employment and employment. An hourly rate threshold of €38, based on the price level of 1 January 2026, applies to the legal presumption of employment. The Dutch House of Representatives approved this measure on 21 April 2026. The Senate considered the proposal at the end of May 2026. Both chambers have since approved it, and it is due to enter into force on 1 January 2027.

Tax advantages of hiring self-employed professionals for employers

The main tax advantage comes from avoiding employer costs, such as continued salary payments during illness. However, this advantage does not outweigh the risk of false self-employment. That risk primarily lies with you as the client, rather than the self-employed professional. The exact allocation depends on whether an intermediary is involved. Organisations that assess self-employment and employment solely from a tax perspective may underestimate the costs of an incorrect employment classification.

Client and professional discussing the choice between self-employment and employment

Employer costs versus the costs of hiring self-employed professionals

Employer costs are expenses paid on top of an employee's gross salary. These include social security contributions, pension contributions, holiday allowance and statutory transition payments when employment ends. For self-employed professionals, these costs are not listed separately. They are incorporated into the hourly rate. The difference between employing someone and hiring a self-employed professional is not just about the total costs. It also concerns who carries the risks associated with illness, pensions and disability.

This allocation may change under the proposed legislation introducing basic disability insurance for self-employed professionals. The proposed premium is approximately €171 per month at most. An opt-out option applies to professionals who already have private insurance.

What does the disability insurance requirement cost for hired self-employed professionals?

The disability insurance requirement does not create direct costs for you as the client. However, the self-employed professional incorporates the premium, which can reach approximately €171 per month, into their hourly rate. Under the proposed Self-Employment Act, an opt-out option applies to professionals who already have private insurance. If a professional chooses a low hourly rate, they may also face risks associated with the legal presumption for lower hourly rates.

In which scenarios should you choose self-employment or employment?

Self-employment is suitable for short-term, specialist assignments with limited supervision. Employment is more suitable for permanent roles requiring knowledge retention and greater organisational involvement. A numbered decision tree with six questions brings these considerations together. It helps you decide whether to hire a self-employed professional, use a temporary employment arrangement or recruit an employee.

If knowledge needs to remain within your team, employment or temporary employment is a better fit. Under temporary employment, a third-party agency employs the professional and assigns them to your organisation. If you work with a self-employed professional for an extended period in a closely managed role, you may face chain liability. This means you become jointly responsible for certain obligations within the contractual chain.

Decision tree: six questions to find the right arrangement

Is the work a clearly defined project with a specific result? Yes: proceed to question 2. No, it is an ongoing responsibility: proceed to question 5.
Does the professional decide how, where and when the work is carried out? Yes: proceed to question 3. No, you provide direct supervision: proceed to question 5.
Is the hourly rate above €38? Yes: proceed to question 4. No: proceed to question 5, as the legal presumption of employment applies below this amount.
Does the professional also work for other clients? Yes: hiring a self-employed professional is suitable. No, they work exclusively for you: proceed to question 5.
Does the knowledge need to remain within your team after the assignment ends? Yes: employment is suitable. No: proceed to question 6.
Do you want to fill the role temporarily without becoming the employer? Yes: temporary employment is suitable. No: employment is suitable.

Decision matrix: self-employment, temporary employment or employment

Feature	Self-employment	Temporary employment	Employment
Employer	None; contract for services	Temporary employment agency	Your organisation
Supervision	No employer authority	Professional works for you; agency remains the employer	You determine how, where and when the work is done
Typical use	Short-term and specialist assignments	Temporary roles without becoming the employer	Permanent roles
Cost structure	Hourly rate, no employer contributions	Agency rate	Gross salary plus employer contributions
Main risk	False self-employment; primarily the client's responsibility	Chain liability in long-term, closely managed assignments	No hiring-related classification risk, but fixed employment costs
Knowledge retained after completion	No	No	Yes

How does HeadFirst ensure compliant hiring through an intermediary?

HeadFirst facilitates compliant hiring through an intermediary that connects clients with self-employed professionals. This involves documenting agreements on notice periods, the conditions under which an assignment can end early and confidentiality to protect business information. Since 1995, HeadFirst has connected independent professionals, suppliers and clients. With more than 20 years of experience in external hiring risks and related legislation, HeadFirst helps ensure that insurance arrangements and administration are properly organised. This differs from temporary agency work, where the agency remains the employer. With intermediary-based self-employment, the professional remains an independent entrepreneur.

Frequently asked questions about self-employment and employment

Is hiring a self-employed professional cheaper than employing someone?

Not necessarily. Self-employed professionals often charge higher hourly rates, but these rates do not include separate employer contributions, pension arrangements or continued salary payments during illness. With employment, you add these costs to the gross salary. Which option is more cost-effective depends on the assignment's duration and how frequently you need the professional. A calculation based on your specific situation provides the clearest answer.

When am I allowed to hire a self-employed professional?

You can hire a self-employed professional when the working relationship genuinely reflects independent entrepreneurship. The professional works without employer authority, determines their own working methods and carries entrepreneurial risk. A fixed legal assessment framework is not yet available. In spring 2026, the proposed Self-Employment Act had not yet been submitted. It therefore remained an announced future framework rather than applicable legislation. Until then, the actual working relationship determines whether self-employment is appropriate.

How long can I hire the same self-employed professional?

There is no fixed maximum hiring period under Dutch law. However, the longer a self-employed professional performs the same structural tasks under your supervision, the greater the risk that the Dutch Tax Administration classifies the relationship as disguised employment. If the working relationship is reclassified, the professional's self-employed status may be revoked retroactively. This can result in additional tax and social security payments. Regularly review the assignment and level of supervision to prevent false self-employment.

Who carries the risk in cases of false self-employment?

In cases of false self-employment, the risk primarily lies with the client, rather than the self-employed professional. The Dutch Tax Administration can reclassify the working relationship as disguised employment. This may result in additional payroll taxes and social security contributions. There is no safe number of months during which hiring a self-employed professional is automatically risk-free. That period does not exist, despite frequent suggestions to the contrary. Always assess the actual working situation, not just the contractual arrangement.

What hourly rate is too low for hiring someone as self-employed?

There is no fixed statutory amount that determines whether an hourly rate is too low. The legal presumption based on a low hourly rate means that a rate consistently below a reasonable level for the sector may indicate false self-employment. Combined with other factors, such as employer authority and personal work obligations, this presumption may contribute to the reclassification of the working relationship.

What changes in 2026 and 2027 for clients?

At present, no definitive legislative changes have been established for 2026 and 2027 that directly alter enforcement against false self-employment or the DBA Act. However, further development of the proposed Self-Employment Act is under discussion. This legislation aims to clarify the criteria for independent entrepreneurship. Monitor updates from the Dutch Tax Administration or consult a legal adviser. This helps you adapt your working relationships to new regulations in time.

What is the difference between an employment contract and a contract for services?

An employment contract is characterised by authority, wages and personal labour. The employer determines how, where and when the work is carried out. Under a contract for services, the contractor works independently, without this hierarchical relationship, and carries their own entrepreneurial risk. The difference lies not in the title of the contract, but in how the work is actually performed.

Can I hire a self-employed professional as an employee later?

Yes, there are no legal restrictions preventing this. However, pay attention to the actual working relationship. If the professional previously worked under direct supervision, at fixed times and as part of a permanent team, this may indicate disguised employment rather than a genuine transition. Document the transition in a new employment contract with clear terms and conditions. This helps establish clarity around the new working relationship.

Should I hire a self-employed professional or employ someone for this role?

It depends on the nature of the work. For a temporary project with a clearly defined result, an independent professional is often a better fit. If the tasks are expected to become a permanent part of your organisation, with fixed working hours and direct supervision, an employment contract is more appropriate. Also consider who determines the working methods. Does the professional manage their own schedule and approach, or do you decide these matters? This level of independence is a key factor in choosing the right arrangement.

What does it mean if a self-employed professional works exclusively for our organisation?

If a self-employed professional works exclusively for your organisation over an extended period, the relationship may be classified as disguised employment. Exclusivity and economic dependence are indicators of possible false self-employment. Reclassification of the working relationship may follow. This risk affects you as the client, not just the self-employed professional.

Choosing between self-employment and employment starts with your situation

Whether you hire a self-employed professional or employ someone depends on the role, the risks you are prepared to accept and the level of authority you need. Still unsure after completing the decision tree? Calculate the costs of employing someone and compare them with the costs and risks of hiring a self-employed professional. This helps you make an informed choice that suits your organisation.

Self-employment or employment: which should you choose and when?