What is treaty contribution in SAP (PY-NL - The Netherlands)?

SAP Term: treaty contribution

• Component: PY-NL

• Component Name: The Netherlands

• Description: An alternative healthcare insurance premium for employees living abroad. The premium is known in the Netherlands as 'verdragsbijdrage'.

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• Key Concepts: 
  Treaty contribution is a payroll tax in the Netherlands that is paid to the government by employers. It is a percentage of the employee’s gross salary and is used to fund social security benefits. The percentage rate is determined by the employee’s age and income level. 
  
  How to use it: 
  In SAP, the treaty contribution component (PY-NL The Netherlands) is used to calculate the amount of treaty contribution that must be paid by the employer. This component can be found in the payroll configuration settings and can be adjusted according to the employee’s age and income level. 
  
  Tips & Tricks: 
  It is important to ensure that the treaty contribution component is configured correctly in order to avoid any potential penalties or fines from the government. Additionally, it is important to keep track of any changes in the employee’s age or income level as this may affect the amount of treaty contribution that must be paid. 
  
  Related Information: 
  For more information on treaty contributions, please refer to the Dutch government website or contact your local tax office. Additionally, you can find more information on SAP payroll configuration settings in the SAP Help Portal.