Netherlands

Mandatory Employee Benefits in the Netherlands

The Dutch social security system is one of the most comprehensive in Europe.

It consists of two main components:

1. the national insurance schemes (volksverzekeringen)
2. the employee insurance schemes (werknemersverzekeringen).

The national insurance schemes include the General Old Age Pensions Act (AOW), the Surviving Dependents Act (ANW), the Long-Term Care Act (Wlz), and Child Benefit (Kinderbijslag).

You are subject to national insurance contributions if you:

• Are considered a resident of the Netherlands, or
• Are subject to Dutch payroll tax for work performed in the Netherlands.

National insurance contributions are collected through payroll tax withholding from the individual’s income.

General Old Age Pensions Act (AOW)

All residents of the Netherlands accrue entitlements to a state pension under the General Old Age Pensions Act (AOW). The amount of this pension depends on the years you have lived in the Netherlands before reaching the state retirement age. A maximum of 50 years is considered, with 2% of the full state pension amount accrued annually.

The state pension you receive also depends on your living situation—whether you live alone or with a partner. As of 2025, the gross annual amounts are:

• State pension (AOW) for cohabiting partners (per person): €13,856
• State pension (AOW) for single persons: €20,201

Surviving Dependents’ Pension (ANW)

Under the Surviving Dependents Act (ANW), all residents of the Netherlands are insured for a surviving dependents’ pension. The gross insured amount for 2025 is €20,354 per year.

However, entitlement to this benefit is subject to specific conditions. The surviving dependent must either:

• Be the caregiver of children under the age of 18 or
• Have a disability of at least 45%.

If one of these conditions is met, an additional income test is applied, which may reduce the benefit amount.

Long-Term Care Act (Wlz)

Individuals requiring substantial daily care or support due to physical or mental limitations may be eligible for care under the Dutch Long-Term Care Act (Wlz). Most people who live or work in the Netherlands are automatically insured under the Wlz scheme.

Child Support (Kinderbijslag)

Child benefit is a financial contribution to help residents with the costs of raising a child. Individuals can receive child benefits for:

• Their own child
• Their partner’s or ex-partner’s child
• A foster child
• A child they care for as if it were their own

Employee Insurance Schemes

The employee insurance schemes in the Netherlands include the Unemployment Insurance Act (WW), the Work and Income (Capacity for Work) Act (WIA), and the Sickness Benefits Act (ZW).

Employee insurance contributions are required for anyone employed in the Netherlands. The employer pays these premiums.

Unemployment Insurance Act (WW)

Employees who become unemployed in the Netherlands may be entitled to benefits under the Unemployment Insurance Act (WW, Werkloosheidswet). To qualify for WW benefits, the following conditions must be met:

• The employee has lost at least 5 working hours per week and the corresponding income (for those working fewer than 10 hours per week, at least half of the hours must be lost)
• The employee is available for work in the Dutch labor market
• The employee worked for at least 26 weeks in the 36 weeks before becoming unemployed
• The employee became unemployed through no fault of their own

Employees receive 75% of their last earned salary, up to a maximum annual salary of €75,864 (2025). For the first 10 years of employment, each year entitles the employee to one month of WW benefit. From the 11th year onward, each year of employment entitles the employee to half a month of benefits, up to a maximum of 24 months.

Employees who do not meet the conditions for WW benefits may be eligible for social assistance under certain circumstances.

Work and Income (Capacity for Work) Act (WIA)

The WIA focuses on what partially disabled employees can still do rather than what they cannot. WIA benefits are available to employees who, after 104 weeks of illness, have a wage loss of at least 35% for any suitable type of work.

The WIA consists of two schemes:

• IVA (Inkomensvoorziening Volledig Arbeidsongeschikten) – for employees who are permanently and fully (80–100%) disabled.
• WGA (Werkhervatting Gedeeltelijk Arbeidsgeschikten) – for employees who are partially (35–80%) or temporarily fully disabled.

The WIA does not compensate for income loss below 35%, which means mild disability is not covered. For income loss between 35% and 80%, compensation can be up to 70% of the lost income if the employee continues to work within their remaining capacity. Those who do not work may receive considerably less.

Employees who are permanently disabled for more than 80% are entitled to a benefit of 75% of their last earned income up to the retirement age of 67. The maximum annual income covered under the WIA is €75,864.

Sickness Benefits Act (ZW)

Under the Dutch Civil Code, employers must continue paying sick employees at least 70% of their salary during the first two years of illness. After 104 weeks of sick leave, an assessment is made to determine eligibility for WIA disability benefits.

Although mostly privatized, the Sickness Benefits Act (ZW) continues to serve as a safety net for employees who no longer have an employer—such as temporary workers or in cases of employer bankruptcy. It also applies in specific situations, such as illness related to pregnancy or childbirth.

ZW benefits typically amount to 70% of the employee’s daily wage and are paid for a maximum of 104 consecutive weeks. Female employees are entitled to 100% of their salary (up to the daily wage cap) in case of absence due to childbirth-related illness. Employee insurances are due when a person is employed in the Netherlands. Employers pay the premium for employee insurance.

Health Insurance

Everyone who lives or works in the Netherlands is legally required to have basic health insurance. This insurance covers standard medical care, such as services provided by general practitioners, hospitals, and pharmacies.

In addition, individuals can choose to take out voluntary supplementary insurance to cover healthcare costs not reimbursed under the basic plan.

Health insurers are obliged to accept all applicants for basic insurance, which offers the same level of coverage to everyone. The average annual premium for basic insurance is approximately €1,920. Children under the age of 18 are exempt from paying this premium.

Insurers also offer supplementary policies on top of the basic plan, for example, dental coverage. The average annual premium for supplementary insurance is around €400.

Supplementary employee benefits in the Netherlands

Employers in the Netherlands may offer supplementary employee benefits in addition to the social security system provided by the state. This is often necessary because state benefits are subject to restrictions such as maximum amounts or strict eligibility criteria. These additional benefits fall under the general category of employee benefits.

Retirement Pension

For Dutch employers, it is essential to determine whether they are subject to a Collective Labour Agreement (CAO) or fall within the scope of a mandatory industry-wide pension fund. If so, pension accrual must comply with the applicable sectoral agreements. Employers not bound by a CAO or industry fund may establish their own pension schemes.

Before the introduction of the new pension law on July 1, 2023, employers could choose between a defined benefit (DB) plan and a defined contribution (DC) plan. As of that date, only defined contribution plans are permitted. The new law also significantly changes the structure of DC plans.

Previously, contribution rates often increased with age. Under the new system, contributions must be age-independent (a flat rate). Employers establishing a new pension plan after July 1, 2023, must comply immediately with the new rules.

The contribution is based on the employee’s salary, reduced by the AOW franchise—a threshold amount that is not pensionable (€18,475 in 2025). The pensionable salary is calculated by subtracting the franchise from the gross salary. The contribution is then determined by applying the chosen premium percentage (up to 30% of the pensionable salary—the fiscal maximum). Contributions are invested, and upon retirement, the accumulated capital is used to purchase lifelong retirement and partner pension benefits.

Pension Reform

The introduction of the new pension law on July 1, 2023, marks a significant shift in Dutch pension legislation. Employers with existing pension schemes on that date have until January 1, 2028, to align their plans with the new legal framework.

Under the new system, all defined contribution plans must be based on a fixed premium percentage. Existing defined benefit plans must be converted to defined contribution schemes by January 1, 2028. Existing DC plans with age-dependent contributions may continue for current employees (those hired before December 31, 2027). From January 1, 2028, new employees must enroll in a flat-rate contribution scheme.

It is expected that most employers will choose to retain the age-based contribution table for existing employees (known as grandfathering). As a result, many employers will operate two pension schemes:

• A transitional scheme for current employees, maintaining the age-dependent contribution scale
• A new scheme for employees hired on or after January 1, 2028, based on a flat-rate contribution

Another key change concerns the partner’s (survivor’s) pension. Under the new rules, this will be calculated as a percentage of the pensionable salary, regardless of the number of years of service—unlike the current system. This change will apply to both schemes during the transition.

Dependent’s Pension

Pension schemes almost always include additional coverage in the form of partner and orphan’s pensions. Under the new system, the insured amount is calculated as a percentage of the employee’s salary. Employers may choose a benefit of up to 50% of the pensionable salary.

The partner’s pension is paid out as a lifelong annuity. The orphan’s pension is paid until the child reaches the age of 25. Employers may choose either a fixed benefit or an increasing benefit over time.

Disability Insurance

Under the Work and Income (Capacity for Work) Act (WIA), employees may be eligible for a state disability benefit after two years of sick leave. All employees in the Netherlands are automatically insured under the WIA.

In cases of full disability, the WIA provides a benefit of at least 70% of the employee’s last earned income. For partial disability, the benefit is usually lower than 70%. WIA benefits are calculated based on a maximum salary (€75,864 as of 2025).

To supplement the statutory WIA benefit, employers can offer WGA gap insurance, which tops up the disability benefit to 70% of the employee’s most recent gross salary, up to the maximum salary (€75,864 in 2025). This benefit is paid directly to the employee.

WIA surplus insurance provides additional coverage for income above the WIA maximum salary. It typically covers 70% or 80% of the gross annual income exceeding €75,864 (2025) and is paid directly to the employee.

Accident Insurance

An accident insurance policy provides a payout in the event of an employee’s death or disability resulting from an accident.

Group Health Insurance

A group health insurance policy covers medical expenses incurred by employees and their children under 18 due to illness or injury. Employees typically pay the insurance premium themselves, although some employers choose to cover the premium—either partially or fully—and sometimes extend it to employees’ partners.

Common Employee Perks

In addition to statutory and (insured) employee benefits, employers in the Netherlands often offer a variety of additional perks to attract and retain talent. Common fringe benefits include:

• Transport allowance: for business-related travel, up to €0.23 per kilometer
• Working-from-home allowance
• Education reimbursement: for job-related training, often combined with paid time off to attend courses
• Mobile phone, laptop, or company car: provided based on business needs
• Flexible working hours
• Flexible leave options, such as the ability to purchase extra vacation days, additional leave schemes, or care-related leave
• Employer-sponsored training, including programs focused on work-life balance or stress management
• Gym membership reimbursements
• Bicycle schemes
• Financial support, such as allowances or subsidies, depending on company policy

This information about employee benefits in the Netherlands is provided by Schouten Zekerheid, Asinta’s employee benefits consulting Partner in the Netherlands.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.