Receive a labour cost advantage (LKV) via the payroll tax return
If you hire someone on benefits, you may receive 1 or more labour costs compensation (loonkostenvoordeel, LKV). The amount of the LKV varies and depends on the target group. There are 4 target groups:
- older employees (56 years and older)
- new employees who have a disability
- employees from the jobs agreement target group
- employees with a disability who are relocated to your company
Unlimited Labour Costs Compensation in 2025
Do you have more than 25 employees? It will soon become simpler and more attractive to employ people with an occupational disability. There is a . The LKV will then become unlimited. Currently, it is for 3 years. You will also no longer need a statement from UWV. The Lower and Upper Houses of Parliament still need to approve the proposal.
Target group statement
To apply for LKV, you need an LKV target group statement. Your employee can request the LKV target group statement (in Dutch) from UWV or authorise you. With the target group statement, your new employee shows that they are in the target group register (in Dutch).
As soon as you have an LKV target group statement from your employee, you can arrange the application for the LKV with the payroll tax return. The Tax Administration will automatically pay you the LKV after the end of the calendar year. Check the Payroll Taxes Handbook (in Dutch) of the Tax Administration under 'Loonkostenvoordelen' to see whether you are entitled to a wage cost benefit.
Reduce your wage costs through the low-income benefit (LIV)
The low-income benefit (lage-inkomensvoordeel, LIV) is a contribution towards your wage costs. You will receive the LIV if your employee works at least 1,248 hours on an annual basis and has an average hourly wage between 100% and 125% of the minimum wage. This allowance makes it easier for low-wage workers to find work.
The Tax and Customs Administration will automatically pay you the LIV after the end of the calendar year. Read more about the LIV under 'Loonkostenvoordelen' (wage cost benefits) in the Tax Administration's Handbook on Payroll Taxes (in Dutch).
Receive youth LIV as compensation for the increase in the minimum wage for young workers
The minimum wage for young workers has been increased every 6 months since 1 July 2017. As a result, you have to pay your employees aged 18, 19, and 20 more wages. You will receive an annual allowance for this through the youth LIV (Minimum youth wage increase compensation). You will receive the youth LIV for an employee who:
- is insured for 1 or more employee insurance policies
- was 18, 19, or 20 years old on 31 December of the previous year
- receives an average hourly wage that corresponds to the legal minimum youth wage for their age (in Dutch)
The Tax Administration will automatically pay you the youth LIV after the end of the calendar year.
Get wage dispensation through the Participation Act
Are you hiring an employee who falls under the Participation Act? And who, due to an occupational limitation, produces less than an employee without an occupational limitation? Then you can apply for a wage dispensation (in Dutch) from the municipality where your employee is registered. You pay the wage in accordance with the collective labour agreement, or in any case the statutory minimum wage. You will receive a maximum of 70% of the minimum wage and part of the employer's contributions from the municipality. The condition is that you pay wages according to the collective agreement or at least the statutory minimum wage.
Do you have a company with more than 25 employees? Then you are obliged to hire people with an occupational disability. This is agreed in the jobs agreement.
Offer a trial placement
You can offer a trial placement to someone who is on social assistance or who is entitled to benefits from UWV. They can gain work experience during this trial placement. A trial placement is for 2 months, and the employee keeps their benefits. That means you do not have to pay any wages.
The condition is that you intend to offer the employee an employment contract of at least 6 months afterwards. UWV must give permission for a trial placement. Read more about the trial placement (in Dutch) on UWV.nl.
Request labour costs compensation for an employee with a no-risk policy
A no-risk policy (in Dutch) is intended for employees with an occupational disability or illness, and employees from the jobs agreement target group. This means that if they become ill, you can receive sickness benefits from UWV (in Dutch) for these employees. You do not have to pay a higher premium for the Sickness Benefits Act. Nor if your employee receives WIA benefits. This will compensate you for the costs of continued payment of wages in the event of illness.
Request wage dispensation for an employee with a Wajong benefit
You can request a wage dispensation from UWV for an employee with a Wajong benefit if that employee performs less than other employees. This means that you temporarily pay lower wages and that UWV supplements the wages. This wage dispensation for employees with a Wajong benefit lasts for a minimum of 6 months and a maximum of 5 years. After that, you can apply for wage dispensation again.
Financial CV tool
There is a tool available that tells you which rules apply to you, based on several questions.
- Are you an employer and do you want to hire an employee? Check which financial schemes are available to you with the Financial CV tool (in Dutch). You will also learn how high your compensation is.