Social Security Contributions – Netherlands

Breakdown: AOW pension 17.90%, Healthcare 5.43%, Long-term care (WLZ) 9.65%, Unemployment (WW) 2.64%, Disability varies by industry. Automatically deducted from gross salary. These are national insurance premiums, not taxes but function similarly.

Social contributions only calculated on income up to €69,395 (2026). Above this amount, no additional contributions. High earners benefit - someone earning €150,000 pays same contributions as someone earning €70,000.

Separate mandatory health insurance premium around €150/month (varies by insurer). Not included in the 27.65%. Paid directly to private insurer, not through payroll. Everyone must have basic coverage. Income-dependent healthcare allowance available for low earners.

Employers pay additional payroll taxes: unemployment, disability, sector-specific contributions. Varies by industry and company size. Total employment cost for employer: salary + 20% payroll taxes + pension contributions. Why hiring in Netherlands expensive.

Employee pays 27.65% social + 35-49% income tax. Employer pays ~20% additional. Total tax/social burden on employment approximately 47-50% for middle incomes, reaching 60%+ for high earners. Among highest in world.

Self-employed (zzp'ers) only pay AOW pension contribution through tax return - much lower rate than employees. Don't pay unemployment, disability, or other employee insurances. Major reason many work as self-employed - immediate 20%+ savings.

Must arrange own: disability insurance (very expensive in NL), pension savings, income protection. No unemployment benefits. Also pay income tax on profits. Still usually cheaper than employee status for same income.

Self-employed get special deduction (zelfstandigenaftrek) €6,310/year reducing taxable income. Compensates for lack of employee benefits. Plus deduct all business expenses: office, equipment, travel, insurance, pension contributions. Can save 30-40% overall.