Social security in the Netherlands is one of the most complicated in the world. As a result, complying with the administrative requirements involved in employing foreign workers can be a daunting task. Similarly, foreign (agency) contractors working in the Netherlands face a multitude of laws and regulations.
In addition to paying income tax, employees in the Netherlands contribute to several national insurance schemes. And thereby are often obliged to participate in (institutional) pension plans. Such obligations are the result of the collective labour contracts that apply to most sectors of industry and over 80% of the Dutch workforce.
Generally, the employer deducts these taxes, national insurance and pension contributions from employees’ salaries. In addition, employers in the Netherlands contribute to several compulsory employee insurance schemes (e.g. unemployment insurance).
When you come over to the Netherlands to work as an expat one of the requirements is that you register with municipal authorities in your place of residence. You will then be provided with a registration number called BSN. This also serves as your tax and social security number.
In addition to paying income tax, under Dutch social security law, employees in the Netherlands contribute to several national insurance schemes and are often obliged to participate in (institutional) pension plans. Such obligations are the result of the collective labour contracts that apply to most sectors of industry and over 80% of the Dutch workforce. There are three main strands that constitutes the Dutch social security system:
As a rule of thumb, anyone living and working in the Netherlands is required to contribute to the Dutch social security system. There are, however, a number of exceptions.
Foreign nationals whose native country has an agreement with the Netherlands are exempt. But only as long as they continue to make contributions in their native country under the terms of the treaty. In order to apply for exemption from the Dutch system, a certificate (E101/A1) confirming social security coverage in the native country will usually suffice. Likewise, foreign nationals temporarily posted in the Netherlands are eligible for continuation of their social security coverage under the legislation of their native country if a treaty is in place.
Foreign nationals from countries with which the Netherlands shares no social security treaty may be required to pay contributions and be eligible for benefits in both. In some cases, people with short-term positions (less than six months) are exempt from employee insurance scheme contributions. But never from the national insurance schemes.
For more detailed information you can always ask our support as we know everything you need to know about the Dutch social security and how it applies to your specific situation.
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