Social insurance schemes provide a temporary income during, for instance, unemployment, old age, illness, or incapacity for work. There are 2 types of social insurance schemes in the Netherlands:
Employee insurance schemes that are mandatory for every employee.
National insurance schemes that are compulsory for everyone who works or lives permanently in the Netherlands.
Note that when you are covered in the Netherlands, you will no longer be covered by your own country's social security system.
Employee insurance schemes
The employee insurance schemes insure employees during unemployment, illness, or incapacity for work. This way employees have a temporary income if they are unable to work.
In the Netherlands, the employee insurance schemes are compulsory for every employee:
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 who already received WAO before 1 January 2006
Paying employee insurance contributions
Employers pay contributions on behalf of their employees to the Netherlands Tax Administration (Belastingdienst). The Netherlands Tax Administration explains which contributions these are in chapter 7.1 Werknemersverzekeringen en premies of their 'Handboek Loonheffingen' (pdf, in Dutch). These contributions are part of the payroll tax. Employers need to register with the Netherlands Tax Administration (in Dutch) before employing staff in order to withhold payroll taxes.
If you are not established in the Netherlands, but you employ people who live or work in the Netherlands, you may have to withhold payroll taxes. In that case you must register as a foreign compay (employer) with the Netherlands Tax Administration.
You are not allowed to deduct these contributions from your employee’s wages. There is 1 exception. You may deduct up to 50% of the differentiated premium for the Return-to-work fund (Werkhervattingskas, Whk) from your employees’ net wages. You must report this on the payslip as 'premie Whk' or 'gedifferentieerde premie Whk'.
The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) arranges payment of employee benefits.
Insurance for self-employed professionals
Self-employed professionals do not pay any contributions for the insurances mentioned above, unless they make arrangements for their insurances themselves.
Becoming a self-insurer
With regard to the Sickness Benefits Act (ZW) and the WGA (part of the WIA, Capacity for Work Act) you can choose to be a self-insurer. Then you will pay less contributions for the employee insurances. If an employee falls ill or faces disability issues, you pay the benefits instead of the Employee Insurance Agency.
National insurance schemes
National insurances are compulsory for everyone who works or lives permanently in the Netherlands. The schemes are the following:
National Survivor Benefits Act (Algemene nabestaandenwet, Anw)
General Old Age Pensions Act (Algemene Ouderdomswet, AOW)
Long-term Care Act (Wet langdurige zorg, Wlz)
General Child Benefit Act (Algemene Kinderbijslagwet, AKW). You do not have to pay any contributions under the General Child Benefit Act.
Withholding national insurance contributions
The Netherlands Tax Administration collects the contributions for the national insurances. Employers withhold these contributions from their employees’ wages (payroll tax) and pay these to the Netherlands Tax Administration.
The Dutch Social Insurance Bank (Sociale Verzekeringsbank, SVB) pays the actual benefits.
National insurance contributions for self-employed professionals
Are you self-employed? Then you pay the contributions for national insurance as part of your income tax.
Contribution percentages and amounts
The employee insurance contribution percentages are set twice every year (1 January and 1 July) by the Ministry of Social Affairs and Employment. The Employee Insurance Agency (UWV) shows the current contribution percentages (in Dutch).
The national insurance contributions (in Dutch) are set every year. They depend on the rates and the age of the person that is paying.
The social insurance benefits (in Dutch) are set every six months.
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 their own country. In that case, however, they must apply for an A1 certificate (certificate of coverage). This also applies to self-employed professionals working 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 determine which country is responsible for the social insurances. For example, the number of hours somebody works in a country, the country of residence, or the country of the employer.
