Check your employment contract first
First, read your employment contract. Many contracts have a clause under which you need permission for side activities ("nevenwerkzaamheden"). Some also have a non-compete clause ("concurrentiebeding"). If your business competes with your employer, or you breach a side-activity clause, you can get into serious trouble. If you are unsure, ask your employer in writing.
Registering at the KVK
You register your business at the KVK, the Dutch trade register, in the same way as anyone else. You may be an entrepreneur on the side while you are employed.
How tax works
Your salary is taxed as employment income, and your business profit is added to it. As a result, your business profit may be taxed in a higher bracket. You file one income tax return for both. Set money aside for the tax on your business profit, because tax is withheld only from your salary.
The hours criterion is harder to meet
To claim the self-employed deduction, you need at least 1,225 hours per year on your business, on top of your job, and you must spend more time on the business than on your job. That second condition falls away if you spent one or more of the previous five years outside entrepreneurship. For many part-timers, this is hard to reach, and they may lose that deduction. The small business profit exemption still applies.
The advantages
- You pay your living costs from your salary while you build up the business.
- You can test your idea with far less financial risk.
- You build clients and experience before going full-time.
Points to watch
- Energy and time: combining two roles is demanding.
- Contract clauses: permission and non-compete.
- Tax: a higher bracket, and you set aside the tax on your profit yourself.
A Dutch BV with staff or a director on the payroll has to file every month. We do the payslips, the payroll tax return and the yearly forms. See payroll and administration for a Dutch BV.
Which return is due when, and what happens if you miss a date? See running a Dutch BV: taxes, filings and deadlines.
Related articles
See also running a business as a student, running a business from home and starting a second business.