Employers who experience a drop in turnover will have a portion of their payroll costs reimbursed via the NOW scheme. They will be able to apply for this compensation from 6 April to 31 May 2020.
Drop in turnover of at least 20% for three months
The main condition for receiving the compensation is that a company’s turnover drops by at least 20% for a period of three months.
How the drop in turnover is determined
The drop in turnover is determined by taking 25% of the turnover for 2019 as a reference. This has to be compared with the turnover generated from March to May 2020. However, employers can also take a period starting one or two months later as a basis for determining their drop in turnover. In such cases the wage bill will remain the wage bill for March, April and May 2020.
Please note:
In the case of groups the turnover for the whole group is taken as a basis. Any subsidies received and other contributions from public funds are treated as turnover.
Maximum contribution of 90%
In the event of a 100% drop in turnover the contribution amounts to 90% of the wage bill. If the drop is smaller, the contribution is adjusted proportionately, i.e. it will amount to 45% of the wage bill for a 50% drop in turnover.
What is the wage bill?
The wage bill is determined using the payroll tax return, taking the salaries on which employee insurance contributions were deducted in January 2020 as a basis. A 30% mark-up for charges paid by the employer, such as pension and employer’s contributions, is added to this for all companies. The maximum salary per employee is € 9,538 per month.
Application
The application is made for each payroll tax number. The expected drop in turnover for the company as a whole must be indicated in each application.
Who is and who is not eligible?
Anyone for whom a payroll tax return is submitted and who is insured under the Unemployment Insurance Act (WW), Sickness Benefits Act (ZW) or Work and Income (Capacity for Work) Act (WIA) is covered by the scheme. The salary of flexiworkers is also compensated. No distinction is made between different forms of contract. The scheme also covers the payroll costs of employees for whom the employer has no obligation to make continued salary payments, e.g. employees on a zero-hours contract.
Payroll employers and temporary employment agencies are subject to the same conditions as ordinary employers. Employees with a fictitious employment relationship also fall under the scheme, although uninsured and voluntarily insured directors/major shareholders (Dutch: DGA) do not.
Approval by UWV
If the application is approved by the UWV, an advance payment of 80% will be paid in three instalments. The first portion of the advance will be paid out within two to four weeks of the application being made. If necessary, the scheme will be extended beyond May. The subsidy may only be used to cover payroll costs.
Accountant’s role
Within 24 weeks of the end of the period for which compensation has been awarded under the NOW the employer must apply for the final amount of the subsidy to be determined. In principle, a declaration from an accountant is required for this purpose, but the threshold below which this will not be necessary is being considered. A final settlement from the UWV will follow within 22 weeks.
No compulsory redundancies!
A condition for receiving the contribution is that no applications to make employees redundant for commercial reasons are submitted to the UWV over the period from 18 March to 31 May 2020. If such applications are made, the contribution is reduced by deducting 150% of the salary of the employee who has been made redundant from the wage bill.
Please note:
This condition does not apply to employees on a flexible contract.