Changes to the employer's premium 2020


The employer's premium for state unemployment payments is changing per 1 January 2020. The industry sector specific unemployment premiums (WW-premie) is being replaced for a labor contract specific employer's premium.


Labor contract specific employer's premium for unemployment

Per 1 January 2020, the employer's unemployment premium (WW-premie) is no longer determined by the industry sector in which the employer operates. Instead, the type of labor contract, fixed term or undetermined term contract, determines the unemployment premium (WW-premie) the employer pays. For fixed term contracts, the unemployment premium (WW-premie) is 8%, while for undetermined term contracts, the unemployment premium is 3%. A significant difference of 5%.


Conditions for the lower 3% unemployment premium

In order to apply for the lower 3% unemployment premium, the employment need to meet the following conditions:

  1. The labor contract is for an undetermined term
  2. The employer keeps a written contract signed by employee and employer in file (*)
  3. The contract is not a zero hour or otherwise flexible contract


(*) For existing contracts not meeting containing the undetermined term clause, it suffice to apply for an addendum including the term clause. This may agreed with an electronic signature or an e-mail approval statement retained on file.


Retro-active correction of the applied lower unemployment premium

If you meet the conditions for applying the lower unemployment premium of 3%, you may need to retro-actively adjust this to the higher 8% premium in the following situations:

  1. The employment ends within two months
  2. The annual hours of paid overwork is more than 30% of the agreed amount of paid hours 


Transition period

The appication of the lower unemployment premium for employee's with an undetermined term contract can be made retro-actively till 1 April 2020. 



Example I. Application of the low unemployment premium

You employ an employee for an undetermined term for 20 hours per week. The salary before tax is €1,500 per month. You have on file a written contract stating that both employee and employer agree to the undetermined term clause. The employer's unemployment premium is 3% of €1,500 or €45 per month. 


Example II. Application of the high unemployment premium

You employ an employee for a fixed term term for 20 hours per week. The salary before tax is €1,500 per month. The employer's unemployment premium is now 8% of €1,500 or €120 per month.


Example III. You employ an employee with two different contracts; one with a low and one with a high unemployment premium

You employ an employee for an undetermined term for 20 hours per week. The salary before tax is €1,500 per month. You have on file a written contract stating that both employee and employer agree to the undetermined term clause. The employer's unemployment premium is 3% of €1,500 or €45 per month. 


For the same employee, you also pay flexible working hours beyond the 20 hours per week. For these extra hours you pay 8% unemployment premium.