[Updated Jan. 26, 2023] Mandatory employee benefits in the Netherlands include general old-age pension, surviving dependent’s pension, long-term care, child support, unemployment, work, and income protection, sick leave, and health insurance. Supplementary employee benefits include retirement, dependent’s pension, disability insurance, accident insurance, and health insurance. Perks range from transportation allowances to mobile phones to flexible leave models.

Asinta Partner
Hans Huizing

Schouten Zekerheid

More Info

Mandatory employee benefits in the Netherlands

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

Social security has two parts. The national insurance scheme (volksverzekeringen) and the employee insurance scheme (werknemersverzekeringen).

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

National insurances are due when you are:

  • Considered a resident of the Netherlands; or
  • Subject to payroll tax in the Netherlands in respect of employment carried out in the country.

National insurances are collected through the withholding of tax from the individual.

General Old Age Pensions Act (AOW)

All inhabitants of the Netherlands accrue rights to a state pension based on the General Old Age Pensions Act (AOW). The amount of this pension depends on the number of years that you live in the Netherlands prior to reaching the state retirement age. A maximum of 50 years is applied (2% of the maximum state pension amount is allocated for each year). The amount of state pension paid out also depends on whether the pensioner cohabits with anyone else. As of 2023, the gross annual amounts are:

  • State pension (AOW) for cohabiting couples (per partner): €12,241
  • State pension (AOW) for single people: €17,971

Surviving Dependents’ Pension (ANW)

All inhabitants of the Netherlands are insured for a surviving dependents’ pension based on the Surviving Dependents Act (ANW). The insured gross amount on an annual basis is €17,860 (2023). However, entitlement to this benefit depends on specific criteria. The surviving dependent must be:

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

If the surviving dependent meets one of these criteria, an additional income test is conducted that may lead to a reduction in the benefit amount.

Long-Term Care Act (Wlz)

If inhabitants need a lot of care or support on a daily basis, for example, because of mental or physical limitations, they may qualify 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 payment to help inhabitants with the cost of caring for a child. Inhabitants can get child benefits for:

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

The employee insurances are the Unemployment Insurance Act (WW), Work and Income Act (WIA), and Sickness Benefits Act (ZW).

Employee insurances are due when a person is employed in the Netherlands. Employers pay the premium for employee insurance.

Unemployment Insurance Act (WW)

If employees become unemployed in the Netherlands, they can be entitled to unemployment benefits under the Unemployment Insurance Act (WW, Werkloosheidswet). The conditions for a WW benefit include the following:

  • The employee lost at least 5 work hours a week and the associated pay (for employees who are employed for maximum 10 hours per week, the condition is to have lost at least half of the working hours)
  • The employee is available for work in the Dutch labor market
  • The employee has worked for at least 26 weeks in the 36 weeks before he became unemployed
  • The employee has become unemployed through no fault of his own

Employees receive 75% of their last salary. The salary is capped at €66956 (2023). One year in employment gives entitlement to one month of WW benefit receipt for the first 10 years. From the 11th year, one year of employment gives entitlement to ½ month of WW benefit (with a maximum of 24 months). If an employee does not meet the conditions to receive WW-benefit, he may qualify for social assistance benefits under certain conditions.

Work and Income Act (WIA)

Work and Income, according to Labor Capacity Act (WIA), emphasizes a partially disabled worker’s capabilities rather than what (s)he is incapable of doing. The WIA provides a benefit to disabled employees if they have a loss of salary of at least 35% for (all kinds of) acceptable employment after 104 weeks of disability. The WIA consists of two legal provisions: IVA and WGA. The WIA does not compensate for the loss of income up to 35%. As a result, disability will no longer be compensated. Loss of income from 35% up to 80% will be compensated up to a maximum of 70% of lost income for those who keep working based on their ability. Others will receive far less compensation. Only employees who are permanently disabled for more than 80% receive an income-related benefit of 75% of the income up to the age of 66 and 4 months. The maximum annual income covered under the WIA is €66,956.

Sickness Benefits Act (ZW)

The Dutch Civil Code stipulates that employers must continue to pay out the salary of sick employees for the first two years of sickness (with a minimum of 70%). After 104 weeks of sick leave, a review takes place to determine whether the employee qualifies for a disability benefit (WIA). After 104 weeks of sick leave, the employee will further be covered under the WIA if disabled for at least 35%.

The Sickness Benefits Act (ZW), although privatized, has continued to exist as a “safety net” for temp workers or employees who do not, or no longer, have an employer. Sick pay is also possible in the event of sickness resulting from pregnancy and childbirth, bankruptcy of the employer, and a few other specific circumstances. Social Security sick pay is 70% of the daily and is paid out as long as sickness continues, but for a maximum of 104 consecutive weeks. Female employees are entitled to a sick pay benefit of 100% of the salary (up to the maximum daily pay) when sickness or absence is in connection with childbirth.

Health insurance

Everyone who lives or works in the Netherlands is obliged by law to hold basic health insurance. This basic insurance covers standard care by, e.g., general practitioners, hospitals, or chemists. There is also the option of taking out voluntary supplemental insurance to cover those expenses not reimbursed by basic insurance.

Insurance companies have a duty to accept clients for basic insurance, which provides the same cover for all inhabitants. The basic insurance premium is an average of €1,700 on an annual basis. Children up to the age of 18 are exempt from this premium.  Insurers also offer supplemental insurance policies on top of basic insurance (e.g., dental insurance). The average premium for these is about €360 a year.


Supplementary employee benefits in the Netherlands

Employers may offer their employees benefits in addition to the system of social security insurance and benefits provided by the state since state benefits have restrictions such as maximum amounts or linked to specific criteria. These supplemental benefits come under the general term of employee benefits.

Retirement pension

If Collective Labor Agreements (CLAs) do not contain any mandatory arrangements, Defined Contribution (DC) pension schemes are the usual choice here. In DC schemes, employers make available an annual contribution to employees for the purpose of accruing a pension. The defined contribution depends on the age and salary of the individual employee. What is known as the AOW franchise is always deducted from the salary (in 2023, at least €16,322). What remains is the pensionable amount. The defined contribution is subsequently calculated by multiplying the premium percentage by the pensionable amount. The premium percentage is taken from a graduated scale for contributions (selected by the employer). The pension contribution is invested, and as of the employee’s retirement date, the lifelong payment of a retirement and partner pension is purchased using the accrued capital. A commonly used scale for contributions, based on a 3% notional interest rate, is:

Age                   Premium percentage

18 – 20                6.9%

21 – 24                7.7%

25 – 29                8.9%

30 – 34              10.4%

35 – 39              12.0%

40 – 44              14.0%

45 – 49              16.3%

50 – 54              19.0%

55 – 59              22.3%

60 – 64              26.5%

65 – 67              30.6%

Dependent’s pension

Pension schemes nearly always include supplemental cover in the form of partner and orphans’ pensions. The amount of the benefit depends on the employee’s salary and the total potential years of service at the employer. The insured amount of the partner and/or orphan’s pension is paid out in the form of an annuity. The partner’s pension has a lifelong payout. The orphan’s pension is paid out up to the age of 18 (max age 27 if the child studies). Employers may opt for a fixed benefit or one that increases.

Disability insurance

Based on the Work and Income Act (WIA), after two years of sick leave, employees may be eligible for a state disability benefit. All employees are automatically insured for the WIA. In the event of full disability, the WIA pays a benefit of at least 70% of the final income. In the event of partial disability, the benefit will usually be lower than 70% of the salary. The WIA benefit is calculated over a maximum salary (2023: €66,956).

The WGA gap insurance supplements the legal disability benefit (WIA benefit), up to 70% of the most recent salary. The benefit is based on a maximum gross annual salary of €66,956 (as of 2023) and is paid directly to the employee. The WIA surplus insurance covers 70% or 80% of the gross annual salary above €66,956 (as of 2023), and the benefits pay directly to the employee.

Accident insurance

An accident insurance policy pays out benefits in the event of an employee’s death or disability resulting from an accident.

Group health insurance

A health insurance policy covers the costs incurred by employees (and their children aged under 18 years) due to illness, such as expenses for medical care and treatment. Employees typically pay for the policy’s premium, although some employers choose to pay the premiums on behalf of their employees and sometimes for their partners as well.


Common Employee Perks

In addition to state benefits and (insured) employee benefits, employers will often provide a range of additional benefits to help recruit and retain employees. The most common fringe benefits are below:

  • Transport allowance: solely for business-related purposes up to €.21 per kilometer
  • Working from home allowance
  • Education Reimbursement:  for job-related training, in addition to providing time off to attend the course.
  • Mobile Phones/ Laptop / Company car:  based on business needs
  • Flexible working hours
  • Flexible leave models: the opportunity to buy extra holidays, extra leave arrangements, care-related leave
  • Employer-sponsored training (work-life balance, stress reduction)
  • Gym membership discounts
  • Bike plans
  • Financial support


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