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This article focuses on the links between the form of employment protection and two elements of the labour market policies budget: unemployment benefits and hiring subsidies. We study the complementarities of such policies in a standard matching model of employment. In our model two types of employment protection reforms are investigated: a reform of the existing job protection policies in Europe (regulatory costs of lay-offs) and the introduction of a US-style “experience rating scheme”. Our simulations show that the design of job protection is a crucial parameter in determining the effect of these policies on unemployment and interacts strongly with the unemployment benefit financing policy. The results suggest that the complementarities between job protection and unemployment benefit policies depend heavily on the precise form of the employment protection.