If you are employed in a country, then in that country of your employer you are socially insured. What if you are temporarily send abroad?
Employment and social insurances
The moment you are send from for instance the United States of America (USA) to the Netherlands to work with a company that is registered in the Netherlands, then you are socially insured in the Netherlands.
Socially insured implies that you contribute via your employer in the costs of our health care system, you are insured for unemployment and disability. Most of these premiums are not shown on the salary specification. Even though your employer contributes already to the health care system, you need to take out yourself an individual health care insurance. If you lack to do this, the Dutch justice department will send you monthly penalties for more or less the same amount as the most expensive health care insurance, until you take out a health care insurance.
Employment and social insurances – you do not want to pay for social insurances
If you are temporarily send to the Netherlands, and the period does not exceed two years, then you can ask the country from where you are send, to continue contributing social premiums to them. That country then needs to issue a statement. In the EU such a statement is referred to as a A1 or formerly known as E101 statement. The USA can issue a US social coverage certificate.
You might think it is cheaper for you not to contribute to the Dutch social system, but sometimes the social system in the country you are send from is even more expensive.
Employment and social insurances – employers in more than one country
The moment you work for one company in two countries or for two companies in more than one country, the main rule would imply that you are socially insured in each country where you are employed. You are then double insured for social premiums and that needs to be prevented.
The rule is then that you are socially insured in the country where you live and where you work for at least 25% of your time. The moment your situation becomes more complex, like you work in three countries 33% of your time and in none of these countries you actually are a tax resident, so you are not living in these countries. Then the book of exceptions has solutions for that as well, but those then need to be studied as this changes from time to time.
What if your temporary period becomes longer?
The situation that you are send to the Netherlands for a short period of max two years, you intend to return, hence you keep on being socially insured abroad. Then you meet the love of your life, or you actually like it more in the Netherlands than you would have expected. After the two year period there is no possibility to extend that period and you become subject to the Dutch social system.
Why would you like to continue your foreign social status?
The reason for not being socially insured in the Netherlands can be the costs of our system. However, it can also have a more fundamental reason. If you live in the Netherlands, then you are paid an old age pension if you reach the age of 67 years old. Under the condition that you worked at least 46 years in the Netherlands, you get 100% old age pension. For every year you were not socially insured in the Netherlands, the old age pension is cut by 2%. If you then work a couple of years in one country and then a couple of years in the other country it can affect this old age pension. The A1 statement prevents this cut.
Orange Tax Services
We can run a payroll for you where you are socially insured abroad. For that we do need the A1 or other certificate from the other country. In case of doubt we check with the Dutch institute in charge for the social premiums if the provided document is indeed the correct document as experience has learned that employees can be very creative.
