National and employee insurance schemes (social security)

National and employee insurance schemes (social security)

Do you employ staff in the Netherlands? Then you must deal with social insurance schemes. These schemes can give people income or support. For example, in case of unemployment, long-term illness, or reaching state pension age. 

As an employer, you:

• pay contributions for employee insurance schemes
• withhold contributions for national insurance schemes from your employees’ wages

Employee insurance schemes

The employee insurance schemes provide employees with a temporary income if they are unable to work.

In the Netherlands, the following 4 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). The WIA includes 2 schemes: 

  • Fully Disabled Persons Income Scheme (Inkomensvoorziening Volledig Arbeidsongeschikten, IVA) 
  • Return to Work Partially Disabled Person Scheme (Regeling Werkhervatting Gedeeltelijk Arbeidsgeschikten, WGA)
• Sickness Benefits Act (Ziektewet, ZW)
• Invalidity Insurance Act (Wet op de arbeidsongeschiktheidsverzekering, WAO). The WIA replaced the WAO for new cases. Employees who already received a WAO benefit may still fall under the WAO.

Paying employee insurance contributions

As an employer, you pay contributions for employee insurance schemes to the Netherlands Tax Administration (Belastingdienst). These contributions are part of the payroll taxes. The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) pays the benefits to your employees. In chapter 7.1 Werknemersverzekeringen en premies of the Payroll Taxes Handbook (Handboek Loonheffingen, pdf, in Dutch), you can find out which contributions you must pay. You can also see the amounts.

Is your business not established in the Netherlands, but do you employ people who live or work in the Netherlands? Then you may have to withhold payroll taxes in the Netherlands. In that case, you must register as a foreign employer with the Netherlands Tax Administration.

You are not allowed to deduct employee insurance contributions from your employee’s wages. There is 1 exception for the Return-to-work fund (Werkhervattingskas, Whk). You may deduct up to 50% of the WGA part of this premium from your employees’ net wages. You must report this on the payslip as ‘premie Whk’ or ‘gedifferentieerde premie Whk’.

Becoming a self-insurer for the Sickness Benefits Act or WGA 

You can choose to become a self-insurer for the Sickness Benefits Act (ZW) or WGA. Then you pay less contributions for employee insurance schemes. Does an employee become ill or unable to work? Then you pay the benefits yourself, instead of the Employee Insurance Agency.

Insurance for self-employed professionals 

Are you a self-employed professional? Then you do not pay contributions for the employee insurance schemes mentioned above. You can arrange these types of insurance yourself.

National insurance schemes

National insurance schemes are compulsory for everyone who works or lives permanently in the Netherlands. These schemes give people:

• an old-age pension: General Old Age Pensions Act (Algemene Ouderdomswet, AOW)
• a survivor’s benefit: Surviving Dependants Act (Algemene nabestaandenwet, Anw)
• long-term care if someone has a chronic illness or a serious physical or mental disability: Long-term Care Act (Wet langdurige zorg, Wlz)

The General Child Benefit Act (Algemene Kinderbijslagwet, AKW) is also a national insurance scheme. You do not pay contributions for this scheme.

Withholding national insurance contributions

As an employer, you withhold national insurance contributions from your employees’ wages. You pay these contributions to the Netherlands Tax Administration as part of payroll tax.

The Dutch Social Insurance Bank (Sociale Verzekeringsbank, SVB) pays the benefits.

National insurance contributions for self-employed professionals

Are you self-employed? Then you pay national insurance contributions as part of your income tax. Read more about how to pay national insurance contributions with the Netherlands Tax Administration (in Dutch).

Contribution rates and amounts

Employee insurance contribution rates are set twice a year: on 1 January and 1 July. The Ministry of Social Affairs and Employment sets these rates. The Employee Insurance Agency (UWV) shows the current employee insurance contribution rates (in Dutch).

National insurance contribution rates are set every year. You can find the current national insurance contribution rates on the Tax Administration’s website (in Dutch). The rates depend on the person’s age.

Social insurance when working temporarily in the Netherlands

Is your business based outside the Netherlands? And do you temporarily send employees to the Netherlands? They can usually stay insured under the social security system of their home country. In that case, they must apply for an A1 certificate (certificate of coverage). This also applies to self-employed professionals who work temporarily in the Netherlands.

Social insurance when working in 2 or more EU Member States

Do you work in 2 or more EU Member States? Or do you have employees who work in more than 1 EU country? Several factors affect which country is responsible for social insurance. For example:

• how many hours someone works in a country
• where someone lives
• where the employer is based

If the Netherlands is responsible for someone’s social insurance, that person is no longer covered by their own country’s social security system.