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National and employee insurance schemes are social insurances against loss of income due, for instance, to unemployment, old age, illness or incapacity for work. Premiums for these insurances are either paid through payroll tax (for employees) or part of the income tax (self-employed professionals). Employers need to register with the Dutch Tax and Customs Administration before employing staff in order to withhold payroll taxes.
National insurance schemes
National insurance is compulsory for everyone who works or lives permanently in the Netherlands.The schemes are the following:
- General Child Benefit Act (Algemene Kinderbijslagwet, AKW)
- National Survivor Benefits Act (Algemene nabestaandenwet, ANW)
- General Old Age Pensions Act (Algemene Ouderdomswet, AOW)
- Long-term Care Act (Wet langdurige zorg, WLZ)
You do not have to pay any contributions under the General Child Benefit Act. For the remaining national insurances the Dutch Tax and Customs Administration collects the contributions.
Employers withhold these contributions from their employees’ wages (payroll tax), which they subsequently pay to the Dutch Tax and Customs Administration. For self-employed professionals the contributions for these insurances are part of their income tax.
Finally, the Dutch Social Insurance Bank (Sociale Verzekeringsbank, SVB) pays the actual benefits.
Employee insurance schemes
In the Netherlands, the employee insurance schemes are compulsory for every employee:
- Unemployment Insurance Act (Werkloosheidswet, WW)
- Work and Income (Capacity for Work) Act (Wet werk en inkomen naar arbeidsvermogen, WIA)
- Sickness Benefits Act (Ziektewet, ZW)
- Invalidity Insurance Act (Wet op de arbeidsongeschiktheidsverzekering, WAO): only for employees that already received WAO before 1 January 2006
Employers pay contributions on behalf of their employees to the Dutch Tax and Customs Administration (Belastingdienst). These contributions are part of the payroll tax. The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) arranges payment of employee benefits. With regard to the WIA you can opt to be a self-insurer.
Self-employed professionals do not pay any contributions for these insurances, unless they make arrangements for their insurances themselves.
Contribution percentages and amounts
The employee insurance and national insurance contribution percentages are set every year. You can find the contribution percentages as of 1 January 2017 (Dutch) at Overheid.nl.
The social insurance amounts are set every six months. You can find the amounts as of 1 January 2017 (Dutch) at Rijksoverheid.nl.
Premium reduction entitlement
In certain situations you are entitled to premium reduction. You will pay a lower employees' insurance premium if you employ a disabled, a young or aging employee. The reduction is deducted from the sum total you must pay under the employee insurance schemes.
Social insurance when working temporarily in the Netherlands
If your business is based outside the Netherlands and you temporarily post employees to the Netherlands, they can usually remain insured for social security purposes in your own country. In that case, however, they must apply for an A1/(E)101 certifcate of coverage. This also applies to self-employed professionals working temporarily in the Netherlands.
Social insurance when working permanently in the Netherlands
If you or your employee permanently takes up work in the Netherlands, you will no longer be covered by your own country's social security system. You will then pay social insurance contributions in the Netherlands. Different rules and regulations apply if you or your employee work/works in more than one EU Member State. For more information, please contact the Dutch Social Insurance Bank (Sociale Verzekeringsbank, SVB) or the social insurance organisation in your country.