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Health Allowances in the Netherlands: A Guide for Overseas Employers

The Netherlands is well known for its social benefit programs, including healthcare, and this will affect your company when you are hiring employees overseas there. If you are just entering the Dutch market, how will you know if you are compliant with Dutch law regarding health insurance and allowances?

This guide will take you through the basics of Dutch health insurance, qualification and allowances for employees.

Health Insurance in the Netherlands

Basic health insurance in the Netherlands is mandatory for every citizen, with optional additional coverage available.  When employers provide insurance for their employees it is a taxable benefit which will need to be accounted for in overall compensation.

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Who Qualifies for Dutch Health Insurance?

Only those who are living in the Netherlands with a residence permit can get Dutch health insurance.  Usually, having employment longer than 90 days will qualify for the residence permit and insurance, and until then you might need another type of coverage.

Dutch Health Insurance for Temporary Visitors

If a visitor does not have a residence permit and/or is staying less than one year they don’t have to get Dutch health insurance, but will need to have some other type of international coverage such as the European Union Health Insurance Card for EU citizens.

Case Example: Employee Health Allowance

It is common for employers in Netherlands to offer their employees an allowance to help pay for health insurance.  We had a client that wanted to know how much the required coverage is and how to list it on the payslip.

We responded by saying that the average cost is around 110 Euros for the employee portion of the insurance, with the remainder being covered by other payroll contributions.  The amount of the allowance stated on the payslip may be more to reflect the fact that the insurance is a taxable benefit, so the allowance may be more to offset the tax paid by the employee.

Is there a risk of non-compliance?

As with any foreign employment-related rules, there is a risk of non-compliance if you hire employees, but they don’t have the statutory minimum coverage.  There are penalties involved if an employee does not have some type of insurance, so this is one area to pay attention to when on-boarding new employees.

Shield GEO Solution

When you venture into foreign markets, you are immediately subject to the employment, payroll and tax laws in place, and obligated to know and follow the rules.

If this is your first time hiring employees in Netherlands, how will you meet the insurance requirements there?  What are the options and differences for expat, residents and EU citizens?

The Shield GEO solution makes sure that you have the right insurance for your employees, through our in country experts and local employer of record in Netherlands.  In addition, we will take of all immigration, payroll and tax withholding for you, giving you the peace of mind that you are in full compliance with Dutch laws.

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Looking to hire an employee in the Netherlands? Get in touch.

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