How much does sick leave insurance cost?
Although sick leave insurance is not required by law, it is often a good idea to purchase a policy. Suppose one of your employees falls ill. You will then face a number of costs, such as continuing to pay their salary for two years, costs for temporary staff, sick leave support, and return-to-work assistance.
All in all, these costs can really add up. With sick leave insurance, you’re covered for this. But how much does sick leave insurance actually cost? At Alpina.nl down the costs of sick leave insurance for you.
Average cost of sick leave insurance
To calculate the premium, an insurer uses a premium rate. The premium for sick leave insurance can be calculated by multiplying this premium rate by the total payroll costs. On average, the premium ranges from 1.5% to 5.5% of total payroll costs. The rate depends on various factors.
When calculating the premium for sick leave insurance, an insurer considers:
- The composition of your staff (age, number of part-timers, etc.)
- The sector or industry in which you work
- Absenteeism rates for the past 3 years
Annual cost of absence insurance
Every business is different. That is why the premium for absenteeism insurance varies by organization. The premium is reviewed annually. This review examines whether company data has changed and whether there have been personnel changes that have altered the age distribution. Additionally, the ratio between the amount paid out in the past year and the amount of premium paid is assessed. This assessment also takes into account absenteeism over the past three years and the premium. Certain structural changes in a sector can sometimes lead to an adjustment.
Costs associated with a sick employee
Did you know that many organizations don’t really know how much an employee on long-term sick leave costs? In fact, it’s about one and a half times as much as most people think. When your employee is sick, you’ll face various costs. The biggest expense is continuing to pay their salary. As an employer, you’re required to continue paying your employee’s salary for up to two years in the event of illness. This is also known as the obligation to continue salary payments. By law, an employee receives at least 70% of their gross salary. If your company is bound by a collective bargaining agreement (CBA), this may vary. Many CBAs stipulate that the sick employee receives 100% of their gross salary in thefirst year and 70% in thesecond year.
In addition to the obligation to pay wages, you will face a number of other costs, such as costs for absence management, replacement staff, potential lost revenue, and costs associated with the employee’s return to work. The Netherlands Bureau for Economic Policy Analysis (CPB) has provided an example of the daily costs associated with an employee on sick leave. This example is based on an average annual income in the Netherlands of €36,500.
| Cost per day | |
|---|---|
| Continued payment of wages | €153 |
| Costs of temporary staff | €146 |
| Loss of production | €43 |
| Health and safety service costs | €60 |
| Absenteeism Support | €7,50 |
| Total cost | €410 |
Request a quote directly through Alpina
At Alpina.nl , you Alpina.nl easily request a quote for sick leave insurance. All we need is some basic information about your company and your staff. If you’re having trouble or have any questions, please feel freeto contactus. You can reach us by phone at 088 – 688 37 12. We’re happy to help.
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