Hiring in Europe as a US company means unlearning the US playbook: there is no employment-at-will, employer social costs are far higher, and you usually need either a local entity or an employer of record (EOR) to employ compliantly. This guide covers Italy, Switzerland, Germany, France and the Netherlands — the models, the real costs and what US employers most often miss.
Because European employment law is built on protection, not at-will flexibility. Every one of these countries requires a written contract, statutory notice and severance, mandatory employer social security contributions, and — usually — either a local entity or an employer of record to be the legal employer. The gross salary is only the starting number.
US companies are used to hiring fast, setting their own terms and ending employment at will. In Europe, almost none of that holds. Contracts must follow local law and, in several countries, a sector-wide collective agreement. Ending employment means notice periods, documented grounds and often severance pay. And the headline salary hides a second number — employer costs — that can add anywhere from the mid-teens to nearly half again on top of gross.
In the payrolls we run across these markets, that second number is what surprises US finance teams most: the same gross salary can carry mid-teens employer costs in Switzerland and over 40% in France. Plan for the total employment cost, the contract rules and the exit rules before you make an offer — not after.
US companies have four main routes: set up a local entity and run payroll yourself; use an employer of record (EOR) that employs the person for you; engage a genuinely independent contractor; or use a country-specific compliant model such as portage salarial in France. The right route depends on headcount, speed and how much risk you want to carry.
An employer of record is usually the fastest route for one or a few hires: the EOR is the legal employer in-country, runs local payroll and carries compliance, so you can hire in days without incorporating. Setting up your own entity makes sense once a market becomes strategic and headcount grows. A contractor arrangement can work where the person is genuinely independent — but treat it with caution, because misclassification is enforced. And some countries have their own compliant models: France’s portage salarial employs an independent professional through a portage company, while self-employment and local limited-company structures suit specific profiles in Germany and the Netherlands.
The principles are shared — no at-will, mandatory employer contributions, statutory notice — but the detail differs sharply. Italy is governed by sector collective agreements; France has the highest on-costs; Germany has strong dismissal protection and works councils; Switzerland is the most flexible but permit-bound; the Netherlands has a distinctive holiday allowance and expat tax ruling. The table summarises it; the sections below go deeper.
According to Germany Trade & Invest, the employer’s share of the four statutory branches comes to roughly 21% of the gross wage; only accident insurance is borne entirely by the employer. The headline rates are stable for 2026, but the contribution ceilings rose: €8,450 per month for pension and unemployment and €5,812.50 per month for health and long-term care, with the average health supplement up to 2.9%. Because contributions stop at those ceilings, the effective employer percentage is lower for high earners.
Italy’s defining feature is the CCNL — the national collective agreement for each sector — which sets minimum pay, working hours, leave and notice, so you cannot simply invent your own terms. Employer social security runs around 33% of gross through INPS, plus INAIL accident insurance, before the customary 13th (and often 14th) month salary and the TFR severance accrual. Dismissal is heavily protected, and employing staff means a local entity or an EOR/partner. For independent professionals, Access Financial offers a compliant self-employment solution in Italy.
Switzerland is outside the EU and has the most flexible labour law of the five — shorter notice, no general statutory severance — but salaries are high and social insurance runs through the pillar system (AHV/IV/EO, unemployment, occupational pension and accident cover). Employer on-costs are comparatively low, often in the mid-teens depending on the pension age bracket. Crucially, staff leasing requires a licence from the State Secretariat for Economic Affairs (SECO). Access Financial holds a SECO licence, is a member of swissstaffing, and offers a fully compliant employer of record solution in Switzerland.
Germany combines strong dismissal protection (Kündigungsschutz) with works councils (Betriebsrat) and employer social contributions of roughly 21% of gross, plus employer-only accident insurance. Labour leasing — the legal basis for an EOR — requires an AÜG licence (Arbeitnehmerüberlassung). Access Financial holds an AÜG licence and offers both EOR and self-employment solutions in Germany, plus immigration and relocation support; our Germany country guide covers the Skilled Immigration Act and EU Blue Card routes for non-EU hires.
France has the most codified labour law and the highest on-costs here — employer social charges typically add 40–45% on top of gross, per the official CLEISS schedule — alongside the 35-hour week, CDI/CDD contracts and CSE works councils. There is no at-will employment. For independent professionals, France’s own compliant route is portage salarial, where a portage company employs the consultant. Access Financial offers portage salarial and a limited-company (PSC) solution in France; see our France country guide for how each fits.
The Netherlands has no at-will dismissal (you go through the UWV or the court), a statutory transition payment, and a distinctive 8% holiday allowance on top of salary. Employer social costs are moderate at roughly 20% and up. The well-known 30% expat tax ruling still applies through 2026 but drops to a flat 27% from 1 January 2027 and is capped at the WNT norm. Contractor misclassification is enforced under the DBA rules. Access Financial offers EOR, self-employment and limited-company solutions (PSC) in the Netherlands, plus immigration and relocation; start with our Netherlands country guide.
Match the model to headcount, speed and risk. For one or a few hires, an EOR (or portage in France) is usually fastest and safest; for a growing, strategic team, a local entity earns its overhead; a contractor only fits a genuinely independent worker. Whatever you choose, budget the full employer cost and the exit rules up front.
A short checklist before you make a European offer:
If you are hiring a non-EU national or relocating a US employee, employment compliance is only half the job — they also need the right work and residence permits, which take time and often face quotas. Each country runs its own regime, so start the immigration track in parallel with the employment set-up, not after it.
Italy uses quota-based permits (the Decreto Flussi); Germany offers the EU Blue Card, the Skilled Immigration Act and the Opportunity Card; the Netherlands runs a highly skilled migrant scheme alongside the expat tax ruling. Access Financial provides immigration and relocation support in Germany and the Netherlands, coordinating permits, registration and the practicalities of a move so a hire can actually start on time.
Access Financial has been helping companies employ across borders since 2003, in 60+ countries, and we have always been more about people than a drive to automate everything. For US employers, that means one partner and one portal across these markets, with the right compliant model in each — and named specialists who cost and structure the hire properly before you commit.
| Country | AF employment options | Licence / membership | Immigration & relocation |
| Switzerland | Employer of Record (EOR) | SECO licence; swissstaffing member | — |
| Germany | EOR; self-employment | AÜG licence | ✓ |
| France | Portage salarial; Limited Company (PSC) | — | |
| Netherlands | EOR; self-employment; Limited Company (PSC) | NEN 4400-1 certified | ✓ |
| Italy | Self-employment | — |
Across the group we hold the credentials these markets demand: a SECO licence and swissstaffing membership in Switzerland, an AÜG labour-leasing licence in Germany, Dutch NEN 4400-1 certification, and membership of APSCo (the Association of Professional Staffing Companies). In practice that means EOR in Switzerland, Germany and the Netherlands; portage salarial and a limited-company (PSC) option in France; self-employment solutions in Germany, the Netherlands and Italy; and immigration and relocation support in Germany and the Netherlands. To scope a compliant, fully-costed European hire, talk to our team.
Yes. A US company can hire in Europe without a local entity by using an employer of record (EOR), which becomes the legal employer in-country, runs local payroll and carries compliance. In France, the equivalent route for independent professionals is portage salarial. Setting up your own entity only becomes worthwhile once headcount and strategic commitment grow.
Not always, but it is usually the fastest compliant route for a first hire. Without an EOR you need a local entity to be the legal employer, which takes time and ongoing administration. An EOR lets you employ someone in days. Access Financial offers EOR in Switzerland, Germany and the Netherlands, and portage salarial in France.
More than the gross salary suggests. Employer social costs alone add roughly the mid-teens in Switzerland, about 21% in Germany, a third in Italy and 40–45% in France, before benefits, 13th-month pay and severance accruals. Always budget the total employment cost, and confirm the exact figure for the country with a payroll calculation.
Yes, but they need the right work and residence permits, which vary by country and can face quotas, so start early. Access Financial provides immigration and relocation support in Italy, Germany and the Netherlands, coordinating permits and the practical side of a move alongside compliant employment.