Social Premiums in The Netherlands

Curious about how income security works in the Netherlands? Whether you're ill, unemployed, or pregnant, social insurance ensures you receive payments when you need them most. Discover the two main types of insurance and the key policies that protect employees. Read the full blog!
Social Premiums in The Netherlands
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In the Netherlands it is arranged that your income will be paid in the event of illness, unemployment or pregnancy.

This is possible because after the Second World War a system was introduced in which all employees in the Netherlands jointly bear responsibility for social security.

2 Types of social insurance

  • Volksverzekeringen (National social security)
  • Werknemersverzekeringen (Social security schemes for employees)

The insurance policies are required by law. National social security is mainly financed by national insurance premiums and by general taxes. Employee insurances are funded by employers who deduct a percentage from the wages of employees.

Your employer pays an amount to the tax authorities each month on the basis of your gross salary. New percentages, maximum percentages and thresholds are published every year by the tax authorities. To generate a correct pay slip, these are implemented in the payroll systems that calculate the deductions.

This is the way in which income is secured in the Netherlands to people who are temporarily or never able to work (for example if they are disabled).

The most important social insurance policies

  • Basic State Pension (AOW): Basic pension for people older than 66 and 4 months. The eligible age is occasionally increased.
  • Sickness Benefits Act (ZW): In the event of illness, you will receive at least 70 percent of your salary for 2 years, depending on the sector in which you work. In addition, sickness benefits are paid out during pregnancy and delivery.
  • Unemployment Insurance (WW): In the case of involuntary unemployment you are entitled to a partial benefit from the UWV. How long you are entitled to this depends on your employment history in the Netherlands.
  • Work Capacity Act (WIA ): You will receive this premium if you are unable to work anymore or as much as you used to after two years of illness.
  • National Survivor Benefits Act (ANW): This premium provides a basic income for people whose partner has died and are responsible for a child under the age of eighteen or with a disability, if they meet certain requirements.
  • Health Insurance Act (ZVW): Everyone who works in the Netherlands is obliged to have health insurance. According to these policies you are insured for standard medical costs and many prescribed medicines. A mandatory deductible of € 385 applies to everyone. It is also possible to have yourself insured for extra coverage.
  • Return to Work Fund (Whk): This premium is paid by the employer to cover the costs with which the government can earn income for employees who are sick or disabled. A part of this premium can be deducted from your salary as an employee.

With the exception of the Whk premium, all premium costs are for your employer on top of your gross salary. The employer therefore pays all costs for gross salary and premiums in total. So all premiums mentioned have no effect on your net income if you have agreed on a gross salary.

Do you have questions about social premiums? Contact us, and we’ll be glad to help!

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