Managing Covid-19

Dutch government offers more detail on the NOW employers' emergency fund

Published on 1st Apr 2020

The government's update on its temporary fund for employers gives further information for businesses on how to use the scheme to help them through the coronavirus crisis.


On 31 March 2020, the Dutch government announced the full terms and conditions of its Temporary Emergency Bridging Measure for Sustained Employment (NOW), which has been established to help employers through the coronavirus crisis.

The NOW provides a government subsidy of up to 90% of the employer's wage bill for a period of three months – from March to May 2020 – in order to help to avoid mass redundancies and/or pay cuts as a result of the Covid-19 pandemic and the emergency lockdown in the Netherlands.

The government through the Employee Insurance Agency (UWV) aims to open the NOW for applications from 6 April 2020. Upon receiving the first tranche of the NOW – the timing is expected to be within two to four weeks following application –  employers must inform their works council, if they have one and otherwise their employees.

Company eligibility

In order for a company to be eligible for the NOW, it must meet the following conditions:

  • the company must have a Dutch withholding tax number;
  • the company expects (and is able to demonstrate) a drop in turnover of at least 20%, starting from 1 March 2020;
  • the company shall pay out the employee's full salary;
  • the company is obliged to make its best effort to keep the wage bill as equal as possible; and
  • the company shall not make Dutch employees redundant

If a group of companies has several withholding tax numbers, multiple applications must be made (that is, per withholding tax number). The "turnover drop" is measured on a group level. A company consisting of multiple business units acting under a single withholding tax number, will need to demonstrate the turnover drop on a company level (not on a business unit level).

The turnover drop is calculated as follows:

a) the company needs to assess its (group) net turnover as of 1 March 2020 for the months March, April and May 2020 (or another consecutive three-month term between 1 March 2020 and 31 July 2020)

b) the company needs to demonstrate the (group) turnover for the entire 2019 year

c) the number under (b) is divided by four

d) the number under (a ) is divided by the number under (c)

e) the number under (d) is converted to a per cent figure

f) the per cent figure under (e) is to be filled out on the application form and will be the basis for calculation of the wage bill subsidy

Companies expecting a larger drop in turnover, for example during June/July compared to March/April may want to elect the May-July 2020 period for the determination of the drop in turnover.

Turnover drop: an example

A company had €1,000 net turnover in 2019. This company is now expecting a turnover for the period March–May 2020 amounting to €120 (that is €40 each month).

a) €120
b) €1000
c) 1,000 divided by four=250
d) 120 divided by 250=0.48
e) 48%
f) 48% of 90% is 43%, in other words, the government subsidy is 43% of the wage bill, taking into account the wage cap per employee of €9,538. This wage bill includes a fixed 30% surcharge to cover for holiday allowance, pension premiums etc. The wage bill is fixed on the level of January 2020.

  • In this example, within two to four weeks following a complete application, the government will pay out an advance payment of 80% of 43% which is 34%.
  • Upon expiry of the programme, the final assessment will be made based on the actual turnover made in the aforementioned months.

'Best efforts' obligations

In short, there are two "best efforts" obligations linked to the NOW.

The first obligation is that the company is obliged to make its best effort to keep the wage bill as equal as possible. This condition means, in this example, that the company is due to pay out 100% of the wages, uncapped during the compensation period. If this results in severe liquidity issues, or other issues, the company may apply for other state aid measures.

The second obligation is that the company shall not make Dutch employees redundant. With this condition the government aims to protect jobs as much as possible. A company that breaches this condition (such as the redundancy applications are made as per 18 March 2020) will face a penalty.

The government takes the position that the subsidy cannot be considered illegal state aid, because this is a temporary subsidy which benefits employees and does not render a selective advantage on certain (groups of) companies.

Calculate the compensation

Download our calculation tool to determine the expected compensation for your company based on the NOW and you will find the required information for the application for the NOW.


* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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