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Term · Data, privacy & security

Data processing agreement

Does another party work with data of your customers or employees on your behalf? Then you set down agreements together in a data processing agreement.

Updated 7 October 20263 min read

In short

A data processing agreement is a written agreement between you and a party that processes personal data on your behalf, such as a software supplier or hosting provider. The GDPR makes it mandatory in Article 28. It sets out what that party may do with the data and how it secures it.

What is a data processing agreement?

A data processing agreement is a written agreement between you and a party that processes personal data on your behalf. That party is called the processor. You are the controller: you decide for what purpose and how the data is used.

The GDPR makes the agreement mandatory, in Article 28. If it is missing, you and the processor are both in breach.

What does a data processing agreement contain?

The processor may only use the data for your assignment, not for its own purposes. Among other things, the agreement sets out:

  • which data it concerns, what it is used for and for how long;
  • how the processor secures the data;
  • that its employees are bound by confidentiality;
  • whether it may engage other parties itself (sub-processors);
  • how it helps you in the event of a data breach;
  • what happens to the data when the assignment ends.

You remain responsible for the data, even if the processor drew up the agreement.

Example in an SME

Example

Say you have a customer portal built, and the builder also arranges the hosting. The server holds names and addresses of your customers, and the builder can access them. Then the builder is a processor and you sign a data processing agreement together. The same applies to an online accounting package or a CRM in the cloud. Many of those suppliers have a standard version for it.

When do you need a data processing agreement?

You need a data processing agreement when another party processes personal data for you. Think of software in the cloud, a hosting provider, a payroll administrator or someone who manages an integration for you.

Not every party is a processor. A party that decides for itself what it does with the data is itself responsible. The AP (Dutch Data Protection Authority) gives the example of a logistics service provider that delivers parcels. What counts is what happens in practice, not what is on paper.

For each assignment, you and I sign a data processing agreement. You can also read that in how I work.

Frequently asked questions

Is a data processing agreement mandatory?

Yes, if a party processes personal data on your behalf. That is in Article 28 of the GDPR. Both parties must make sure that it is in place.

Who draws up the data processing agreement?

Either party may. Often the client does it, but many suppliers have their own version. Read it carefully: agreements that go against the GDPR may not be included. The GDPR takes precedence.

Is there an example of a data processing agreement?

Your trade association may have one. The European Commission has also drawn up standard clauses. Do adapt an example to your own situation.

This is an explanation in plain language, not legal advice.

Source: Dutch Data Protection Authority (Autoriteit Persoonsgegevens): Data processing agreement (in Dutch), consulted on 7 October 2026.

Written by Bart van Engelenhoven Founder of Uniekaiconsultancy in Ede, the Netherlands. Bart analyses how SMEs work and builds software, integrations and AI applications himself. Last updated: 7 October 2026

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