16 February 2023 Add expertise tag Add service tag Add country tag
Payroll & HR services Global Mobility Services International labor and cross border assignments Payroll & HR Tax compliance

The Health Care Insurance Act (ZVW) is obligatory insurance against some financial implications of care in case of illness.

The funding of this coverage is arranged by
1. A nominal premium payable by the insured and
2. The income-dependent Health Care Insurance contribution due by qualifying employers.  

Every Dutch resident (subject to the levy of national social insurance premiums) must have medical insurance at a private insurance company. The premium depends on the coverage offered by the insurance and starts at about € 100 per month for the standard insurance and then goes as high as a couple of hundred euros a month. Under certain conditions, and upon application, an income-dependent allowance is available for low-income people (the cost of care allowance known as 'zorgtoeslag'). Also, for children under 18, no premium applies. 

In essence, every employer is obliged to pay the income-dependent health care contribution, which amounts to 6.68% (2023) of the income of its employees. However, there is a maximum income that applies. The same inter-alia applies to some income categories from previous employment and certain government benefits and allowances. The income-dependent health care contribution is reported and paid to the tax office through the periodic (usually monthly) wage tax return.    

This income-dependent premium is an employer cost and does not constitute taxable wages for the employee. However, for some income categories, the withholding agent must withhold a 5.43% (2023) contribution from the income. This relates in particular to:

- Wages from previous employment of (former) employees and benefit claimants of the state pension age.
- Certain statutory pensions.
- Annuities, benefits to resistance fighters and war victims, and benefits from occupational pension funds.
- Periodical benefits to replace lost or foregone wages: standing rights benefits.
- (Pre) pension and RVU benefits that qualify as wages from past work, such as FLO benefits.
- From the 25th month that you pay it.
- Periodic benefits in connection with disability, illness, or an accident that is not included in the collective labor agreement or the employment contract.
- Annuity payments to minors and adults. And payments from an annuity savings account or an annuity investment account.
- Income from current employment of pseudo employees (opting-in) and directors/substantial shareholders ('DGA’s') not insured by employee insurance.

The 5.43% contribution must be withheld from the net salary (up to the maximum premium wage) reported by the employer and paid to the tax office through the periodic (usually monthly) wage tax return.  

Furthermore, for self-employed people, the contribution of 5.43% also applies. This is payable through filing the Dutch personal income tax return, after which an assessment is receivable.