Hiring in staff: what you are liable for and how to limit it
Written by Ilias Aarrass6 min read · Published on · Last reviewed on 
In short
If you hire in staff you can be held liable for payroll taxes and VAT the supplier fails to pay; a 25 per cent transfer to the blocked account indemnifies you for that part.
- With reverse-charged VAT you transfer 20 per cent instead of 25 per cent of the invoice amount.
- Record identity, timesheets and the agreement for every hired worker.
- Periodically request a payment-behaviour statement from the agency.
- With a genuine subcontractor it is not hirer's liability but chain liability that applies.
You are busy, you need hands and you call a staffing agency. A week later someone is on the job and you pay the invoice on time. What most business owners do not know: if that agency fails to pay the payroll taxes and VAT for that worker, the tax authorities can come to you. That is hirer's liability, and it applies to sole traders who occasionally hire someone too. This article explains when you are at risk, how to reduce it to almost nothing and how this differs from working with a subcontractor.
When are you a hirer?
You are a hirer when someone else makes staff available to you and you have direction and supervision over that work. Think of an agency worker, a secondee or a payrolled worker: you decide what they do and how, but they are on the agency's payroll. For the payroll taxes and VAT on those hours the tax authorities can hold you liable if the agency does not pay.
If you hire a genuine subcontractor who organises their own work and delivers their own result, you are not a hirer but part of the chain. Then chain liability applies, with similar consequences. If you hire a self-employed professional working at their own risk, neither applies, but the question of false self-employment comes into play. See also hiring a freelancer or an employee.
How to limit the risk
Three things together make the difference. First: choose an agency with the industry certification. Such agencies are periodically audited on their tax payments and records. Second: pay part of every invoice into the agency's blocked G account. That is an account from which the agency can only pay payroll taxes and VAT. Third: keep your own records in order.
Fixed percentages apply to the transfer: 25 per cent of the invoice amount including VAT, or 20 per cent if VAT is reverse-charged. Pay that amount into the G account and meet the conditions, and you are indemnified for that part, even if the money never reaches the tax authorities. How such an account works and how to apply is in the G account.
| Record | Why |
|---|---|
| Name, date of birth and copy of ID | To show who actually worked |
| Signed timesheets per week | Links the invoice to real hours |
| The agreement with the agency | Shows what you agreed |
| Proof of the transfer to the G account | Basis for your indemnity |
| Copy of the certification and payment-behaviour statement | Shows you checked the agency |
Worked example: one worker for three weeks
- Invoice from the agency
- € 6,800 including VAT
- Transfer to the G account: 25 per cent
- € 1,700
- Directly to the agency
- € 5,100
- Indemnity
- for the transferred part
Result: If the agency goes under without paying, you are not liable for that € 1,700. Without the transfer the tax authorities could have recovered the full payroll tax and VAT from you.
VAT when hiring in staff
When staff are hired out in construction the reverse charge applies: the agency invoices without VAT and you declare it yourself in your return, then deduct it in the same return. In other sectors the invoice simply carries 21 per cent. See reverse-charging VAT and reverse-charged VAT in construction.
Note that the percentage of your G account transfer follows from this: with reverse-charged VAT you transfer 20 per cent instead of 25 per cent, because there is no VAT in the invoice amount. So check per invoice which situation applies before you pay.
Frequently asked questions
Does this apply if I hire someone only once?
Yes. Liability attaches to the situation, not to how often. Even for one worker for two weeks you are at risk if the agency does not pay.
Am I liable when I hire a freelancer?
No, with a genuine self-employed professional hirer's liability does not apply. If it later turns out there was in fact employment, an additional payroll tax assessment can follow.
How much should I transfer to the G account?
25 per cent of the invoice amount including VAT, or 20 per cent if VAT is reverse-charged. State the invoice number with the payment, otherwise the transfer does not count towards your indemnity.
What if the agency has no G account?
Then you cannot cover your risk this way. That is a reason to choose another agency, certainly for more than a few days of work.
Sources
- Hirer's liabilityBelastingdienst · belastingdienst.nl
- Applying for and using a blocked G accountBelastingdienst · belastingdienst.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
