fiscal info corporations

The Care Insurance Act Contributions (“Zvw”) in the Netherlands

Last updated: 10-12-2020

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

The funding of this coverage is arranged for by a nominal premium payable by the insured, and the income dependent Care Insurance Act contribution due by qualifying employers.  

In essence every Dutch resident (subject to the levy of national social insurance premiums) is obliged to have an medical insurance at a private insurance company. The premium depends on the coverage offered by the insurance, and starts at about € 100 per month, and then go as high as a couple of hundred euro's a month. Under certain conditions, and upon application, an income dependent allowance is available for people with low income. (the cost of care allowance 'zorgtoeslag')

In essence every employer is obliged to pay the income dependent Care Insurance Act contribution, which amounts 6.95% (2020) on income from current employment of its employees up to the maximum premium wage per employee. The same inter-alia applies to certain categories of income from previous employment, and certain government benefits and allowances. This premium must be reported by the employer and paid to the tax office through the periodical (usually monthly) wage tax return.    

This premium is an employer’s cost and as such not constitute taxable wages of the employee. However, for certain categories of income, the withholding agent must withhold a 5.7% (2020) own contribution from the income. This relates in particular to:

  • Wages from previous employment of (former) employees and benefit claimants who are at 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 benefits 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 are 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 from an annuity investment account.
  • Income from current employment of pseudo employees (opting-in), and directors/substantial shareholders ('DGA’s') who are not insured for employee insurances.

The 5.7% contribution must be withheld from the employees net salary (up to the maximum premium wage) and as such be reported by the employer and paid to the tax office through the periodical (usually monthly) wage tax return.     


Go to >   The payroll service package of TAXci

Go to >    Index page - Payroll obligations in the Netherlands