Hiring a freelancer or employee: false self-employment
Written by Ilias Aarrass7 min read · Published on · Last reviewed on 
In short
Hire a freelancer who in practice works as an employee and the payroll tax assessment lands with you: enforcement resumed on 1 January 2025 and aggravated penalties apply from 2026.
- Assessments can go back to 1 January 2025, and up to five years in cases of bad faith.
- Standard penalties are withheld in 2026, but intent or gross negligence still brings an aggravated penalty.
- Authority, the duty to do the work personally and the payment of wages are the three points the assessment turns on.
- The contract does not decide it: the actual working relationship is what counts.
If you need extra hands, you can take someone on staff or hire a freelancer. That choice has tax and legal consequences, especially now that the tax authorities have been enforcing on false self-employment again since 1 January 2025 and can impose aggravated penalties from 2026. This article explains what to watch for as a client.
What's the difference?
If you take someone on staff, you're an employer with all the obligations that come with it, such as payroll taxes and continued payment during illness. If you hire a freelancer, you work with an independent entrepreneur who arranges their own tax. The freelancer invoices you, including VAT.
What's the risk of false self-employment?
If you hire a freelancer who actually works like an employee, the tax authorities can see the relationship as employment. That's called false self-employment. The tax authorities have been enforcing this again since 1 January 2025 and can impose aggravated penalties from 2026. As a client you may then have to pay back payroll taxes; see the false self-employment criteria.
How do you prevent problems?
Make sure the freelancer you hire works demonstrably independently: own rates, multiple clients, and no authority relationship as with an employee. Record the agreements clearly, for example in a contract of assignment. The more the collaboration resembles genuine entrepreneurship, the lower the risk.
What's the best choice?
The choice depends on your need. If you have structural work and want to bind someone, employment fits better. If you have temporary or specialised work, a freelancer is more logical. Weigh the costs, the flexibility and the risk of false self-employment against each other.
How to reduce the risk
You need not stop hiring freelancers. The point is that in practice the relationship looks like client and contractor, not employer and employee.
- Agree on a result, not hours on a roster. Pay per assignment or project where possible.
- Let the freelancer use their own tools and their own workwear.
- Do not include a ban on substitution: allow someone else to do the work.
- Do not treat the freelancer as staff: no appraisals, no compulsory team days, no holiday requests.
- Record that the freelancer is liable for mistakes and repairs them at their own expense.
- If a collaboration runs full-time for years, review whether employment would not be fairer and safer.
What the tax authorities look at
Whether someone is genuinely independent depends not on the contract you sign but on how you actually work together. Three things weigh heaviest: is there a relationship of authority, must the person do the work personally, and do they receive wages.
| Points to independence | Points to employment | |
|---|---|---|
| Working hours | Set by the freelancer | You put them on the roster |
| Direction | Agreements on results | Day-to-day instructions |
| Substitution | May send someone else | Must do it personally |
| Tools and materials | Their own | Yours, including workwear |
| Clients | Several at once | Only you, for years |
| Risk | Bears their own risk for mistakes | Simply keeps getting paid |
What an assessment costs you
If it turns out afterwards that there was employment, you as the client receive the payroll tax assessment, not the freelancer. Over the whole period, including tax interest. You usually cannot recover that from the person you hired, since their invoice was long since paid and they paid income tax on it.
Frequently asked questions
When is hiring a freelancer risky?
When you set the hours and the way of working, the person must do the work personally, and there is effectively wage payment. Then it resembles employment, whatever the contract is called. That also applies when hiring through an agency; see freelancing through an agency.
Does a model agreement protect me?
Only if you act accordingly. A signed agreement that does not match practice offers no protection at all. See model agreements and the DBA Act.
Who receives the assessment for false self-employment?
The client. You should have withheld and remitted payroll taxes, so the bill lands with you, with tax interest and over the whole period.
Are penalties imposed in 2026?
Standard penalties no, those are still postponed. Assessments yes, retroactive to 1 January 2025. With intent or gross negligence an aggravated penalty can still be imposed.
Does it help if the freelancer has several clients?
Yes, that is a strong signal of entrepreneurship, as are their own tools and their own risk. It is not a guarantee in itself: the actual working relationship with you remains decisive.
What is the alternative if hiring is too risky?
An employment contract, possibly fixed-term or for a few hours, or hiring through an agency or payroll company. See hiring your first employee for what that involves.
Sources
- Enforcement on false self-employmentBelastingdienst · 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.
