Non-Dutch social security schemes must be considered for Dutch employment tax calculation

January 6, 2014

In order to determine whether social security contributions paid to non-Dutch social security schemes are taxable (employer contributions) or tax deductible (employee contributions) it is necessary to investigate the specific non-Dutch schemes.

In many cases, employees working in the Netherlands who come from abroad, continue to be covered by the mandatory social security schemes of their home country. It is important to establish if contributions made by the employer are fully or partly taxable under Dutch wage tax law and whether employee contributions are tax deductible. For this to be the case, it is necessary for the relevant non-Dutch schemes to be comparable in nature and in scope to the respective Dutch social security schemes as determined by Dutch law. Where a non-Dutch scheme qualifies for tax relief, these rules can be followed.

Since it is not always possible to make a like for like comparison, the Dutch Ministry of Finance has recently published (adjusted) guidelines on how to deal with the issue in relation to a number of countries:

Proper consideration by an employer of the contributions made under the non-Dutch social security regimes by which an employee is covered is necessary in order to determine correctly the employee’s Dutch taxable wage. However, despite the Dutch Ministry guidelines, this remains a complicated exercise due to the significant differences that can exist between the Dutch system and that of the foreign country and employers need to be fully aware of the process to ensure correct administration of their Dutch payroll.


Directive dated 24 March 2014, DGB 2014/144M (in Dutch language)

Guidelines dated 7 April 2014 (in Dutch language)

For further information or to discuss the consequences of the above, please contact Rina Driece, on +31 10 224 6 424 at Loyens & Loeff Rotterdam –


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