Disguised self-employment is a situation in which a self-employed person formally operates as an independent contractor, but in practice their work resembles full-time employment. In practice, this means that the Belastingdienst may classify such cooperation as an employment relationship, which imposes additional financial obligations on your client. In such a situation, the client may be required to pay outstanding social security contributions, taxes, and penalties, and your business activity may be treated as employment.
To assess your current working relationship with your client, please answer the following questions, which will help determine whether you meet the criteria for an employment relationship or independent entrepreneurship.
Does the client determine how you should perform the work or what the working hours are?
If the client controls the manner of work performance or sets the hours, this may suggest an employment relationship.
Is the work performed over an extended period of time?
Long-term cooperation may indicate a permanent employment relationship.
- Do you perform tasks that are also carried out by employees at this company?
If you perform similar tasks to salaried employees, this may indicate that you fulfill a role similar to that of an employee.
- Are your tasks an integral part of the organization’s operations?
Examples include construction work at a construction company or teaching lessons at a school—such tasks may indicate an employment relationship.
- Must you perform the work personally, and is substitution only possible with the client’s consent?
If you do not have freedom in choosing a substitute, this indicates greater dependence on the client, which is a characteristic of an employment relationship.
- Is the remuneration fixed in advance per hour (or month) and paid at a specified time?
A fixed rate and regular payment are typical of an employment relationship.
- Is the amount of remuneration comparable to the salary of employees for similar work?
If your remuneration is at the level of salaried wages, this may suggest that the relationship resembles full-time employment.
- Do you not bear financial risk related to the work, and does the client cover costs when the work is not performed correctly?
The absence of financial risk on your part is another characteristic feature of an employment relationship.
- Do you have only one assignment at all times and do not work with different clients?
Working for one main client may suggest greater dependence.
- Are you obliged to perform tasks according to agreements, but does the outcome of the work depend on your effort?
If the result of your work is measured based on commitment rather than achieving a specific outcome, this may indicate an employment relationship.
If you answer negatively to most of the questions above, this means that your work meets the requirements of an independent entrepreneur.
It is important to:
- have business liability insurance and independently bear the risk for the services you provide;
- set a rate for the service significantly higher than that accepted for an employee under an employment contract.
- perform assignments on various projects or for different clients throughout the year, so that the same work does not last too long;
- invest in your own business by purchasing professional equipment, tools, or materials used when providing services;
- advertise externally through a website or online advertisements;
- be responsible for the final result of the assignment arising from the contract with the client; the self-employed person decides on the manner of performing the work.
Pay attention to these principles to avoid being classified by the Belastingdienst as a salaried employee during an inspection.
A self-employed person who has a contract with an intermediary agency for self-employed persons has a contract that excludes the rules of salaried employment. What such a contract should specify is established by the Belastingdienst; sample contracts for intermediary agencies for self-employed persons are available at: https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/themaoverstijgend/brochures_en_publicaties/algemene_modelovereenkomst_bemiddeling_nbbu
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