Salary Savings Scheme versus Life-Course Savings Scheme

(in Dutch: spaarloon versus levensloop) 

The Salary Savings Scheme

The Salary Savings Scheme (in Dutch: spaarloonregeling) will continue to exist alongside the Life-Course Savings Scheme. However, you are not allowed to participate in both schemes in the same year. If you have saved money under the Salary Savings Scheme in a particular year, you are only allowed to participate in the Life-Course Savings Scheme in the following year. It is possible, however, to withdraw money saved under both schemes in the same year. If you wish to stop participating in the Salary Savings Scheme, you must terminate your participation before 1 January of the year you no longer wish to participate.
It will depend on your personal needs and circumstances whether you will opt for the Salary Savings Scheme or the Life-Course Savings Scheme. Here are some of the differences between the schemes:

Deposit in the Salary Savings Scheme

The maximum deposit in the Salary Savings Scheme is € 613 gross per annum. The balance saved can only be used for purposes specified in the regulations for employers salary Savings Scheme. After four years, you are free to spend the balance any way you like. No wage tax or employee insurance contributions will be deducted from the amount saved. After four years, the balance will be taxed with 1.2% capital gains tax in box 3. Tax credits do not apply.
The maximum deposit in the Life-Course Savings Scheme is 12% of the gross annual salary with a maximum total of 210% of the gross annual salary. In principle, the balance saved may only be used to finance a period of unpaid leave or to stop working earlier. Wage tax (upon payment) and employee insurance contributions will be deducted from the amount saved. The Life-Course Savings Scheme balance is not taxed in box 3. Tax credit is € 183 per savings year. The parental leave tax credit may apply.

Tax benefits in the Life-Course Savings Scheme

In terms of taxes owed, the Life-Course Savings Scheme is attractive. First, the money saved is taken from your gross annual salary, which means that you pay less tax on that salary when you receive it. Moreover, when you withdraw money from the balance, you are entitled to an additional tax credit, the life-course leave credit, which equals the amount withdrawn from the scheme with a maximum of € 183 per savings year. This tax credit will be paid out by the employer when withdrawals are made from the life-course savings account. Employees participating in the Life-Course Savings Scheme who also take out their statutory parental leave are entitled to a supplementary tax credit: the parental leave credit. At present, this credit amounts to half the minimum wage per hour of leave taken, which currently amounts to around € 632 per month in the case of full-time parental leave. Parental leave tax credits must be applied for on your Income Tax Return. The tax credit for parental leave is a temporary arrangement, and will be in effect until 31 December 2009.

A final tax benefit is the fact that you do not have to pay 1.2% capital gains tax on the balance.


Information and Calculations

English contact form General (Third party) Liability application form Directors and Officers Indemnity Premium Hiscox CyberClear Insurance - premium IT Information Technology Liability - Premium Management Consultancy Liability = premium Pension defined contribution - calculation Audio - Dutch Business risks and insurances Complete list - Dutch Business Insurances