Reduce your wage costs with subsidies and allowances
Are you employing someone with an occupational disability? Or someone covered by the Dutch Particpation Act? If so, you may be eligible for subsidies or allowances. This will reduce your labour costs. Find out more about labour costs compensation (LKV), subsidies, and allowances.
Receive a labour cost advantage (LKV) via the payroll tax return
Are you hiring someone from a target group that has difficulty finding work? Or must you hire people with an occupational disability because you have a business with more than 25 employees as set out in the jobs agreement? Then you may receive labour costs compensation (loonkostenvoordeel, LKV). The amount of the LKV depends on your employee's situation.
You get LKV for:
- new employees who have a disability
- employees with a disability who are relocated to your company
Read more about the level and duration of the LKV (in Dutch).
Target group statement
To apply for LKV, you need an LKV target group statement. With the target group statement, your new employee shows that they are in the target group register (in Dutch). Your employee can request the LKV target group statement (in Dutch) from UWV. Or they can authorise you to request it.
LKV for interns
Do you want to hire an intern? You can also apply for LKV for your intern under certain conditions (in Dutch).
Changes to LKV for older employees
Since 1 January 2026, you can no longer get labour costs compensation for employee(s) aged 56 and older. The LKV will continue to apply as usual for employees who started before 1 January 2024. The amount of LKV for older employees was reduced last year.
Entitlement to LKV transfers to new employer
Are you employing someone who was previously entitled to LKV with another employer? The remaining entitlement to LKV will, under certain conditions, be transferred to you as the new employer. This change takes effect on 1 January 2027.
LKV application
You can submit the LKV application when you file your payroll tax return. You can do this as soon as you have received an LKV target group statement from your employee. The Netherlands Tax Administration will automatically pay the LKV to you at the end of the calendar year.
Wage cost subsidy under the Participation Act
You can apply for a wage cost subsidy (LKS) from the municipality where your employee is registered if:
- your employee falls under the Dutch Participation Act
- and, due to an occupational disability, performs at a lower level than an employee without such a disability
The municipality will reimburse you for up to 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. You can combine the LKS with the LKV.
Reimbursement for a workplace modification
Do you incur costs adapting your employee's workplace because of an occupational disability? You can request compensation (in Dutch) for this from UWV or your municipality. For example, for a modified desk.
You can also apply for a subsidy to buy technology that helps people with disabilities to work. Such as reading glasses or an exoskeleton that helps people do physical work.
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.
Advantages of a trial placement:
- the employee can gain experience
- you can assess whether the employee is suitable
- the employee retains their entitlement to benefits
- you do not have to pay a wage
A trial placement lasts for 2 months. After that, you may not agree on a new probationary period.
A condition is that you offer the employee a contract of employment for at least 6 months. The UWV must give its approval for a trial placement.
Read more about trial placements (in Dutch).
Employee with a no-risk policy
If you take out a no-risk policy, you will receive benefits if your employee falls ill. These benefits include:
- you do not have to pay a higher premium for the Sickness Benefits Act, not even if your employee receives WIA benefits
You can take out a no-risk policy (in Dutch )if youy employ:
- a worker with an illness or disability
- a worker in the jobs agreement target group
You do not have to apply for the no-risk policy in advance
When you report your employee as sick to the UWV, you should indicate that the no-risk policy applies. The UWV will then assess whether your employee is entitled to sickness benefit. See what conditions apply to the no-risk policy (in Dutch) on the UWV website.
Request wage dispensation for an employee with a Wajong benefit
You can apply for wage dispensation (in Dutch) if you:
- have an employee receiving a Wajong benefit
- have an employee receiving an IVA benefit (WIA)
- your employee is unable to work as much as your other employees due to an illness or disability
This means you will temporarily pay a lower wage and the UWV will top up the wage. This 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
Check which financial schemes are available to you when you employ people with the Financial CV tool (in Dutch). You will also see how high your compensation is.