Low income benefit (LIV)

Do you employ workers with a low salary? If so, you may be entitled to an allowance for labour costs: the low-income benefit (LIV).

In this article you will read:

• which conditions apply to the LIV
• how high the LIV is
• what you must do to get the LIV
• when the LIV is paid to you

1. Conditions for the LIV

You are entitled to the LIV for the year 2024 for any employee who meets all these 4 conditions:

• The employee is insured for 1 or more employee insurance schemes.
• The employee has an average hourly wage of minimum €14.33 and maximum €14.91.
• The employee has at least 1,248 paid hours per calendar year.
• The employee has not yet reached the state pension age.

Does the employee have 2 or more income relationships with you? For example, because he falls under different wage tax sub-numbers? Then look at the average hourly wage and the paid hours of these income relationships together to determine whether you are entitled to the LIV for this employee. Because UWV determines at employer level whether you are entitled to the LIV for an employee and not at wage tax sub-number level.

Average hourly wage

Your employee’s average hourly wage is his annual wage divided by the number of hours worked. The annual wage is the wages from present employment that you pay to the employee in a calendar year as long as he is employed by you and insured for 1 or more employee insurances, including special benefits. The average hourly wage the tax authorities calculate may therefore differ from the hourly wage you agreed with the employee.
The minimum and maximum amounts of the average hourly wage are based on the statutory minimum hourly wage for employees aged 21 and over plus 8% holiday allowance.

Note 1

This table also applies to employees who are under 21 and have an average hourly wage that falls within these hourly wage limits. The hourly wage amounts are:

Percentage of the statutory minimum hourly wage plus 8% holiday allowance	Hourly wage amounts 2024	Explanation
100%	€ 14,33	If the employee earns less, you are not entitled to the LIV for him.
104%	€ 14,91	If the employee earns more, you are not entitled to the LIV for him.

Until 2023, there was no fixed statutory minimum hourly wage, but a statutory minimum wage per month, week or day. As a result, an employee with, say, an agreed fixed monthly wage had a different hourly wage when working 36 hours a week than when working 40 hours a week. With the introduction of the statutory minimum hourly wage on 1 January 2024, employees will be required to earn at least the statutory minimum hourly wage for all hours worked. For employees you pay at the minimum wage level, who have full-time employment of more than 36 hours per week (e.g. 38 or 40 hours), the introduction of the statutory minimum hourly wage results in a pay increase. You may therefore no longer receive LIV in 2024 for employees for whom you previously received it. This is because the average hourly wage as the tax authorities calculate it is higher for 2024 than for 2023.

You test your employee’s average hourly wage against the lowest and the highest hourly wage amount.

Not part of the annual wage are:

• ZW benefits that you, as self-insurer, pay to a former employee after the end of employment
• WGA benefits you pay to the employee as an own-risk carrier
• WAO, WIA and WW benefits that you pay the employee on behalf of the UWV
• Subsequent payments made by the employer after the end of the employment relationship

As a starting point for the annual wage, you take the wage for employee insurance.

Note 2

Sometimes an employee to whom you pay the minimum hourly wage will still have an average annual hourly wage of less than 100% or more than 104% of the minimum hourly wage. For example, if he also receives allowances or bonuses from you, such as irregularity bonuses or performance bonuses. Then he will earn more. Or if you withhold a pension contribution. Then he will earn less. In these cases, he does not meet the conditions and you are not entitled to the LIV for him.

1,248 paid hours per calendar year

The condition of 1,248 paid hours per calendar year is a hard condition. It also applies if the employee joins you during the year. The 1,248 hours will then not be reduced proportionally. So for employees who are not employed by you for the whole year, it is more difficult to meet the condition of 1,248 paid hours.

Are you taking over all or part of a company, resulting in a transfer of undertaking? Then the paid hours at the transferring employer do not count. An employee must have 1,248 paid hours with you. Otherwise, you are not entitled to the LIV for him.

Note 3

Proceedings are pending in the Supreme Court challenging the tax authorities’ position that the right to wage cost benefit (LKV) does not transfer to the transferring employer. The outcome of these proceedings may also affect the hours criterion of 1,248 hours.

In the year in which the employee reaches the state pension age, you may still be entitled to the LIV for him. For example, if the employee reaches the state pension age late in the year. Then he is more likely to reach 1,248 paid hours. If the employee continues working after reaching the state pension age, you may count all the hours worked in that year when determining whether he has 1,248 hours worked. So also the hours worked after reaching the state pension age.

Concurrence with wage cost benefits

Are you entitled to the LIV and a labour cost benefit for the same employee at the same time? If so, the tax authorities will pay out one of the two. You will get the labour cost benefit for the employee if the amount to which you are entitled is higher or as high as the LIV to which you are entitled. If the LIV is higher, you will only be paid that.

2. Level of the LIV

Are you entitled to the LIV for an employee? Then the tax authorities will pay you an amount per paid hour. The exact amount of your benefit therefore depends on the employee’s number of hours worked and his average hourly wage. You get:

Average hourly wage over 2024	LIV per employee per hour worked	Maximum LIV per employee per year
€ 14.33 or more, but not more than € 14.91	€ 0,49	€ 960

Example
An employee for whom you are entitled to the LIV has 1,300 hours worked over a full year and an annual wage of € 19,275. His average hourly wage is then € 14.83 (€ 19,275 : 1,300). Your LIV for this employee is €637 (1,300 x €0.49).

If an employee continues working after reaching the state pension age

If an employee continues working after reaching the AOW pension age, you are still entitled to the LIV for the hours worked in the return period in which he reaches that age. Except if the employee reaches the state pension age on the 1st day of the return period. Then you are no longer entitled to the LIV for that period.
For example, does an employee reach the state pension age on 2 August and continue to work for you? Then you are also entitled to the LIV amount of €0.49 for his hours worked in August for a declaration period of one month. Of course, only if the employee meets all the conditions for the LIV. But does the employee reach AOW pension age on 1 August? Then you will no longer be entitled to the LIV in August for a one-month tax return period.

3 What do you have to do to get the LIV?

You do not have to apply for the LIV. UWV assesses on the basis of the policy administration for which employees you are entitled to the LIV. Enter the number of hours worked correctly in your tax return.

Are the details in your tax return incorrect? Then you may miss out on all or part of the LIV.

4 When will you receive the LIV?

The tax authorities will automatically pay you the LIV for 2024 in 2025 if your wage tax returns for 2024 show that you are entitled to it. Earlier is not possible, because the tax authorities will only know in 2025 how many paid hours an employee had in 2024 and what his average hourly wage was.

Paying out goes like this:

1. You will receive a provisional calculation of your LIV by 15 March 2025. That calculation is based on the returns and corrections for 2024 return periods that you have made up to 31 January 2025.
2. Do you disagree with the calculation or think you were wrong not to receive a provisional calculation? This could possibly be because you declared incorrect data. In that case, you can send corrections for 2024 until 1 May 2025. The tax authorities will still take these into account in the final calculation of your LIV. This date is a statutory deadline. Corrections you send after 1 May will therefore not be included in the final calculation of the LIV. These corrections are processed in the policy administration and are still used for other processes, such as determining the employee’s entitlement to benefits. If your declarations are correct, please contact UWV Phone Employers 088 – 898 92 95.
3. The tax authorities will send you the decision with the final calculation of your LIV. They will do so before 1 August 2025, based on the data they receive from the UWV. You can object to this decision. When assessing your objection, only the corrections you sent up to 1 May 2025 will be taken into account.
4. The tax authorities will pay out your LIV no later than 12 September 2025.

You will receive 1 provisional and 1 final calculation. This includes an overview of the LIV and the employees for whom you are entitled to it. Are you also entitled to 1 or more wage cost benefits? Then this is also shown in the overview. For each employee you can also see whether he has more than one income relationship with you and whether he falls under different wage tax subnumbers.

The tax authorities transfer the amount to you, not to your employee. They use the account number belonging to the payroll tax number with the lowest subnumber (usually L01). Does the tax office not have your account number for that payroll tax subnumber? If so, they will give you a form you can use to provide them with this account number. Do you still need to pay amounts to the tax authorities? Then they can offset your LIV against this.