Employers take heed: higher employee insurance contributions

28/09/22

Employers take heed: in the worst-case scenario, you may have an additional burden of over EUR 1,600 per employee (whose wages currently exceed the maximum income), with regard to the employees’ insurance contributions in 2023. This is based on the proposal in the Budget Memorandum to raise the maximum income for calculating the employees’ insurance contributions in one step from EUR 59,706 (2022) to EUR 66,956 in 2023. In other words: if you have employees whose wages are above the current cap, then be aware that your burden as an employer may increase. This proposed increase of EUR 7,250 is unusual compared to the regular annual indexation.

Changes to contribution rates as of 2023

As included in our overview 'tax factsheet 2023/2022' on our 2023 Tax Plan website, the preliminary employees’ insurance contribution rates for 2023 have already been announced. These contribution rates differ slightly from the 2022 contribution rates. For instance, the employer's Health Insurance premium will be reduced from 6.75% in 2022 to 6.68% in 2023. The WW and WIA employer contribution rates will also remain roughly the same.

Please note that these rates have not yet been officially determined. Therefore, the final rates per 1 January 2023 may differ.

Change maximum income as of 2023

The biggest change for 2023 is therefore not related to a change in rates, but concerns the increase in the maximum income over which the employees’ insurance contributions are calculated. This cap will rise from EUR 59,706 (2022) to EUR 66,956. As a result, as an employer you may be confronted with an additional burden of (possibly) over EUR 1,600 per employee in case of employees whose wages exceed the curent maximum income.

What does this mean for your organisation?

Depending on your organisational set-up, e.g. size and amount of employees, this proposed change could lead to a significant additional employer burden. We recommend that you analyze which employees’ insurance contribution rates you are obliged to apply to your employees and what this change will mean for you. Please feel free to contact your PwC advisor if you have any questions about employees’ insurance.