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NOW 5: Return of corona support measures in the Netherlands

Contrary to the earlier decision by the Dutch government to terminate the Covid-19 support measures, the NOW wage cost subsidy and deferred payment of taxes in the Netherlands have been extended again, so far until January 31, 2022. The extension is open to entrepreneurs who already benefit from a special deferment of payment and to entrepreneurs who are facing, for the first time or again, payment problems that were mainly caused by the corona crisis. 

What about the wage costs subsidy?

You can apply for the wage cost subsidy until January 31st, 2022, at the latest. This concerns the seventh application period (November and December 2021) of the temporary emergency bridging measure (NOW 5). This compensation is intended for both domestic and foreign employers to continue the payment of wages of their employees during the pandemic and to keep them employed. Regardless of whether you have previously applied for NOW, you can apply for this subsidy if you have an average loss of turnover of at least 20% over November and December 2021 compared to 2019. The compensation will only cover up to 80% of your loss of turnover, which means that no extra subsidy will be awarded for the part of the turnover loss that exceeds 80%.  

Differences between NOW 5 and the other application periods

This application period differs in a number of respects from other application periods but is still largely the same. We have listed the most important differences for you:

  • The period is now two months (November and December 2021), instead of three months (NOW1, NOW3 and NOW4) or four months (NOW2).
  • You can no longer choose over which months you want the loss of turnover to be calculated; the loss of turnover will always be calculated over the months of November and December 2021, even if it overlaps with the previous application period.
  • When calculating the amount of subsidy, the wage costs of September 2021 is taken into account. The wage bill of November and December may decrease by up to 15% compared to the wage bill of September 2021, without affecting the final amount of the subsidy. For NOW3 and NOW4 this was 10%.
  • When calculating the loss of turnover, there are several reference periods that can be used, if the company was established after 1 January 2019 or if the company made an acquisition.

How is the loss of turnover determined?

The compensation is determined on the basis of the expected percentage of decrease in turnover that your company will incur. The loss of turnover will then be calculated by comparing the turnover of the months November and December 2021 with the average turnover of the year 2019:

1/6 of turnover 2019    -/-    turnover  November and December 2021   =   ….% loss of turnover
.                                          1/6 turnover 2019

Please note: Was your company established later than 1 January 2019 or did your company make an acquisition later than 1 January 2019? If so, there are other periods with which you can compare the turnover of November and December 2021, so a different calculation applies

What are the main obligations when applying?

  • The amount of the compensation is based on your wage bill of September 2021. The wage bill for November and December 2021 may therefore decrease by a maximum of 15% compared to the wage bill in September 2021, without this affecting the final compensation. So keep the wage bill equal as much as possible to avoid having to repay a part of it.
  • You have a best effort obligation to guide your employee to another job if you dismiss an employee or if his contract ends. If you submit an application for economic dismissal, you have the duty to report this to the UWV. If you fail to do this, your final allowance will be reduced by 5%.
  • Keep records in your administration that allow the UWV to check whether you meet all the conditions for the compensation. Keep these records for up to 5 years after the compensation has been determined.
  • Inform your Works Council, employee representatives or your employees about the compensation.
  • Continue to submit your payroll tax return on time.
  • Do not pay out dividend and bonuses to shareholders, board and management, and do not buy your own shares for the whole of 2021. This only applies if the advance on the compensation is € 125,000 or more, or if the definitive compensation is € 125,000 or more.

Final calculation

The application that is submitted provides a provisional compensation. Please note that a final settlement will be made later based on the actual figures. This can lead to a (partial) refund of the advance received or to a supplementary payment. The deadline for the for submitting the final application has not yet been communicated, but we will keep you updated once this has been announced. Please note that you will need to enclose a third-party statement or an auditor’s statement with the final application. This depends on the amount of your advance and compensation. You can ask your own accountant or bookkeeper to draw up this statement. If desired, we can put you in touch with an accountant who can guide you in this matter.

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Since 1972, Interfisc has offered international HR & Payroll solutions in the Netherlands, Belgium, Germany, France, the United Kingdom, and Italy. We do this from our offices in the Netherlands and Belgium, and with an international team of around 45 committed and caring employees. 

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