Unemployment insurance premium

The aim of the unemployment insurance premium is to insure employees against unemployment, collective termination of employment contracts or the insolvency of the employer.

Unemployment insurance must be paid to the employee on the basis of wages and other remuneration paid to natural persons on the basis of contract. The payment obligation is distributed between the insured party – the employee (employee’s unemployment insurance premium) and the employer (employer’s unemployment insurance premium). Old age pensioners and members of the company’s management or supervisory body are not required to pay unemployment insurance premiums. An employer must pay unemployment insurance for all employees.

Unemployment insurance premium rate and payment

An employer will be required to calculate and pay unemployment insurance premiums at a rate of 0.8% (employer’s unemployment insurance premium) of the employee’s gross earnings (for instance, you would pay an unemployment insurance premium of 8 euros for an employee who earns 1,000 euros). In addition, an employer will be required to withhold and pay the employee’s unemployment insurance premium at a rate of 1.6% of gross earnings.

An employer is required to calculate, declare, withhold and pay the premiums on disbursements made in a given calendar month. The deadline for payment and filing a return to the Tax and Customs Board is the 10th of the subsequent month. The return can be filed electronically at e-Tax and Customs Board or by contacting the Tax and Customs Board’s regional tax centre.

The Tax and Customs Board verifies payment of the unemployment insurance premium, and if necessary, determines the amount of the premium subject to payment or refund, and collects unpaid premiums.

Unemployment insurance payment for sole proprietors (FIEs)

A sole proprietor (FIE) is not required to pay unemployment insurance premiums for himself/herself. If a FIE has hired employees, it is obligatory to make payments for them. The premium rate and procedures for payment are the same as for companies.

Last amended: 27-01-2017 14:32 | Compiled by: Tax and Customs Board