Netherlands: Compensation program for employers, to support employee retention (COVID-19)

Netherlands: Compensation program for employers

The Minister of Social Affairs and Employment on 31 March 2020 announced the conditions for a compensation program available for employers that expect and ultimately experience a decline in turnover of 20% or more as a result of the coronavirus (COVID-19) pandemic.


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The program is known as the “temporary emergency bridging measure to retain jobs” (Tijdelijke noodmaatregel overbrugging voor behoud van werkgelegenheid—NOW).

Overview of NOW program

The NOW program provides compensation for payroll costs if an employer expects and ultimately experiences a decline in turnover of 20% or more as a result of the COVID-19 pandemic.

  • Compensation will be granted in relation to the decline in turnover and will amount to 90% of the eligible payroll costs.
  • The temporary emergency measure attempts to encourage employers as much as possible to retain employees (with temporary and open-ended contracts).

Although the decline in turnover is calculated at the group level, each employer (that is eligible for the NOW program) must apply for the subsidy separately. The application procedure takes place in two steps, which can both be made online via the website of the Dutch Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen—UWV).

  • The first step is filing an application for an advance payment based on the expected decline in turnover. The UWV will pay 80% of the calculated subsidy in advance and expects to make this payment within two to four weeks. This application can be submitted through 31 May 2020.
  • The second step is the submission by the employer of the final application within 24 weeks of the end of the period over which the employer calculated the loss of turnover in the subsidy application. The final amount of the subsidy is determined on the basis of the actual decline in turnover in that period, and is credited or debited against the advance payment.

Other points to consider

The final subsidy amount will be reduced if:

  • The actual payroll during the period March through May 2020 is lower than three times the payroll for the first payroll tax period of 2020 (usually January 2020), and/or
  • An employer submits, after 17 March 2020, one or more applications to make one or more employees redundant for economic reasons.

The NOW program relief is also available to foreign legal entities and companies, in as much as these entities pay salaries over which Dutch national insurance contributions are remitted. Foreign group companies are not included in the calculation of the decline in turnover if they do not pay Dutch salaries that are subject to national insurance contributions.

For these purposes, turnover is understood to be “net turnover” (as defined in accounting and reporting rules). In principle, this is turnover reduced by, for example, discounts.

Lastly, the NOW program imposes all types of administrative and information obligations on employers.

Read an April 2020 report prepared by the KPMG member firm in the Netherlands

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