✅ Pseudo self-employment: a serial about its consequences, Episode 1.

✅ The self-employment construction is allowed - if done right.

The Dutch Supreme Court has confirmed: within a single business, both employees and self-employed contractors may perform the same tasks — without this automatically resulting in an employment contract for the contractor. But everything must be correct — both on paper and in actual practice. And that’s where things can go wrong…

Imagine you’ve been working pleasantly with a freelancer for quite some time. Or maybe you are that freelancer. Nothing seems out of place. Until one day, a letter from the Dutch tax authority arrives — and it contains the word “reclassification.”

🔍 What is reclassification?

It means the tax office believes that there is actually an employment relationship, even if both parties assumed they were operating within a self-employed arrangement.

Everyone knows pseudo self-employment can be risky. But few people truly realize the range of consequences it can trigger — consequences that often affect both client and contractor. A court ruling that reclassifies someone as an employee can unleash a chain of legal and financial fallout. In this blog series, we explore these effects — and how to protect yourself as best you can.

This week:

What if your freelancer turns out to be an employee?

You thought you had everything in place: a contract, proper invoices, the freelancer manages his/ her own accounts. But then, months (or even years) later, the tax office concludes: this was not a contract for services — it was a disguised employment relationship.

🚨 Consequence? The principal becomes the employer.

For personal income tax purposes, the tax office has stated they won’t retroactively correct the freelancer in case of reclassification. But that leniency does not apply to the principal— who is suddenly treated as an employer. And employers have serious obligations.

So what happens?

The tax authorities go back several years and start issuing retroactive assessments for wage tax and social security contributions. That alone can add up to tens of thousands of euros. And wage tax is just the beginning. Here's what else may follow:

● Wage tax

Wage tax is a withholding tax on income. You might think: “But the contractor already paid his/her income tax, right?” Unfortunately, it’s not that simple.

• The tax office assumes you should have withheld wage tax from salary payments.

• So they charge you retroactively (up to 5 years back).

• Even though the contractor may have already paid income tax, it won’t be offset automatically — and only after the wage tax liability is established.

• In short: you have to pay up first.

● Social security premiums

This is where the real pain begins. If there had been a proper employment contract, you would have had to pay premiums for:

• Unemployment benefits (WW)

• Disability insurance (WIA)

• Sickness benefits (ZW)

These contributions were probably never paid — and they can’t be offset against what the contractor already paid. Double payment? Absolutely possible.

● Health Insurance Act (Zvw)

Freelancers pay their own health insurance contribution. For employees, employers are responsible. So if someone is suddenly seen as an employee, the client must:

• Pay the employer contribution under the Zvw,

• Possibly without being able to deduct it from the contractor’s fee.

● Interest and penalties

The tax office doesn’t like late payments. Expect:

• Collection interest, dating back to the year the payment was due,

• And in some cases: fines of up to 25% or more.

➕ Plus: multiple years of back-pay

This isn't just a one-off. The tax office will go years back in time. One single misclassification — or even just ambiguity — can cost a client tens of thousands of euros.

Bottom line

The Supreme Court has explicitly stated that self-employment is legitimate, as long as the arrangement meets the conditions set out in the Deliveroo ruling — and that self-employed and employed workers may even coexist within the same company.

However, the tax authorities assess not only the contract but also the actual working relationship. In fact, things can already go wrong if the contract alone raises doubts.

So maybe it's time to look for a good agreement - my model agreement, for example.

📌 Cliffhanger:

And that’s not the end of it…

In the next blog: an unpleasant surprise.