As of August 1, the Awf premiums will definitively be reduced for the remainder of 2021. A different date applies if you file your payroll tax returns every four weeks, however, in which case the reduction will go into effect on August 16 (i.e. tax period 9). Per employee, an employer pays a set percentage of an employee’s wages as Awf premium into the ‘Algemeen werkloosheidsfonds (General Unemployment Fund). There are two types of Awf premium: a low premium and a high premium. The low Awf premium – applicable to the wages of employees with a permanent contract – will be reduced from 2.7% to 0.34% of the employee’s wages. The high Awf premium – applicable to the wages of all other employees – will be reduced from 7.7% to 5.34%. The difference of 5 percentage point between the low and high premiums will thus be maintained, as mandated by law.
Although the decision was pending for quite some time, the outgoing cabinet of the Dutch government will now officially push through with the reduction of the Awf premiums. The reduction is the result of newly available budget, after it was decided to withdraw the Job-related Investment Tax Credit (BIK). The reduced Awf premiums will save your organization quite some money in the upcoming months. For example: for an employee earning € 4,800 in gross wages per month, you will save 5 x 2.36% x €4,800 = €566 on the Awf premium in the remaining five months of 2021. And there is no difference between employees with a permanent contract and a temporary contract. In both instances you will save the same amount, namely 11.8% of their gross monthly wages. Now you do the math on how much that will save you in total!