A. Update

The Minister of health, welfare and sport in agreement with Minister of finance and Minister of Social Affairs and Employment has recently released Regulation No. 3704788-1055151 for determining premium percentages and maximum wage limit for health insurance. Below are the relevant updates brought by this Regulation.

a) Update in maximum wage limit

The maximum wage threshold has been updated as under:

b) Update in Health Insurance Rates

Health Insurance (Zvw) rates have been updated. Accordingly, the premium rates for 2024 are as under:

B. Statutory Compliance Release Date: November 14, 2023

C. Effective Date: January 01, 2024

The Dutch Government on September 20, 2023, has submitted the Budget proposal to the Parliament covering amendments on numerous fronts like Income tax, housing, healthcare, education, climate etc., The major focus of this tax plan is to ensure broad prosperity by addressing the economic difficulties. Below are the legislative proposals impacting payroll:

A. Update

a) Change in Tax bracket and Rates

The annual payroll tax bracket and the corresponding rates for wage tax and national insurance contributions of resident taxpayers have been proposed as below:

• For taxpayers younger than state pension age

• For taxpayers older than state pension age and born in 1946 or later

• For taxpayers older than state pension age and born before 1946

b) Change in Tax credit limits

The general and elderly tax credits have been proposed to be increased as under:

c) Increase in Young handicapped discount

The credit limit for young disabled persons have been proposed to increase as under:

d) Increase in Tax free travel allowance

Earlier employers could provide a tax-free travel allowance of Euro 0,21 per km to employees travelling for business purposes but now it has been proposed to be increased to Euro 0,23 per km to help all the individuals to manage the surge in fuel prices.

B. Statutory Compliance Release Date: September 19, 2023

C. Effective Date: January 01, 2024

A. Update

The Dutch Government in the Official Gazette has published the revised statutory minimum wages for the tax year 2023 as under:

B. Statutory Compliance Release Date: April 26, 2023

C. Effective Date: July 01, 2023

A. Update

Further to the earlier announcement dated July 14, 2022, to postpone the release of Income Ratio Decree (IKV) to January 01, 2025, there is one more letter presented to the House of Representatives wherein the State Secretary for Social Affairs and Employment has announced to postpone the release of IKV further to January 01, 2026.

The reason for further postponement of the Decree has been provided as lack of adequate IT infrastructure and error prone outdated technology with Employee Insurance Agency (UWV) that facilitates distribution of benefits to employer.

B. Statutory Compliance Release Date: March 15, 2023

C. Effective Date: January 01, 2026

A. Update

Belastingdienst has released the second edition of Payroll Newsletter for the Tax Year 2023 by providing additional information to the earlier edition of newsletter. Below are the relevant payroll items that must be read along with the update titled “Release of payroll newsletter for 2023” published earlier on this page for comprehensive understanding:

1. Tax free travel allowance

No further changes have been provided to the details as mentioned in the first edition of “Payroll newsletter 2023”.

2. Tax free work from home allowance

No further changes have been provided to the details as mentioned in the first edition of “Payroll newsletter 2023”.

3. Work Cost Regulation

No further changes have been provided to the details as mentioned in the first edition of “Payroll newsletter 2023”.

4. Differentiated premium Invalidity Insurance Fund (Aof)

The first edition contained the reduction in Aof premium proposed to accommodate medium enterprises also under the low Aof premium category from the tax year 2023. However, after consulting some representative employers, it has been decided not to reduce the premium, instead the revision of low Aof has been made by the government as under. This is given in the second edition of the Newsletter.

5. General Unemployment Fund premium (AWf) applicability

No further changes have been provided in the second edition of the Newsletter vis-à-vis the first edition.

6. Temporary extension of Low-Income Benefit (LIV)

An employer is entitled to LIV if low wage employees are hired, subject to the satisfaction of certain conditions. The first edition provided that the LIV benefit amount was proposed to be changed from EUR 0,78 to EUR 0,63 per hour worked and from EUR 1.520 to EUR 1.242 per employee per calendar year for the tax year 2023. However, the second edition provides that the LIV benefit amount applicable for the tax year 2022 will continue for the tax year 2023 as well i.e., EUR 0,78 per hour worked and EUR 1.520 per employee per calendar year.

7. Company car without CO 2 emissions (Electric Cars):

No further changes have been provided in the second edition of the Newsletter vis-à-vis the first edition.

8. 30% Ruling

In addition to the details mentioned in first edition of “Payroll newsletter 2023” the second edition further provides that, in case of new joiners, if application is submitted after 4 months from the start of work, choice of 30% exemption would apply from the “effective date of decision” after the submission of application instead of “date of decision”. This is mentioned specifically to provide more clarity on the date aspect.

9. Anonymous rate conditions

In addition to the details mentioned in first edition of “Payroll newsletter 2023” the second edition indicates that anonymous rate will not apply to the employees without Citizenship Service Number (BSN) in case of no default on his/her part which can be due to the reasons like delay in processing of BSN by municipality etc.,

10. State pension age (AOW)

No further changes have been provided in the second edition of the Newsletter vis-à-vis the first edition.

11. Payroll Tax Return

Further to the changes mentioned in first edition of “Payroll newsletter 2023” the second edition contains changes made to the Collective Labour Agreement Codes (CAO). For details on the new CAO codes, kindly refer to the below link and document. Also, in the section of Codes for the reason of termination of employment additional clarification has been provided to consider “employer” as “client” and “employee” as “contractor” in case of fictitious employment relationships.

12. Explanation on Differentiated Premium percentage of Work Resumption Fund (Whk)

In the month of November, all the employers are notified with the Work Resumption Fund (Whk) premium percentage and size of the employer. In the second edition of newsletter, following points have been provided:

1. Updated premium percentage for employees covered under Sheltered Employment Act (WSW) in sectors 64 and 66. This change has already been published under the update” Update in work resumption fund premium (Whk)” on this page.
2. The Whk premium percentages are based on the size of employer- Small, Medium or Large. The Criteria for determining medium sized employer has not been clearly specified in this edition.

B. Statutory Compliance Release Date: January 11, 2023

C. Effective Date: January 01, 2023

A. Update

The payroll tax tables, viz. White Tax Table, Green Tax Table, special Tax Table, and conversion tables, for both residents and non-residents for the tax year 2023 have been updated and released. The same are available on the sources mentioned below.

B. Statutory Compliance Release Date: December 20, 2022

C. Effective Date: January 01, 2023

A. Update

Belastingdeinst has released an appendix to the newsletter issued earlier on November 15, 2022. It contains amounts and percentage of payroll taxes for 2023 as under:

1. Updated Tax Tables

The annual payroll tax slabs and rates for wage tax and national insurance contributions have been revised. The revised payroll tax slabs and rates for residents are as under.

For detailed information on changes in tax slabs for other categories, percentages, tax credits etc., kindly refer to the link provided below.

The excel version of the tax tables namely, White Tax Table, Green Tax Table, special Tax Table and Conversion Tables for both residents and non-residents, other than for annual payroll frequency, is yet to be released for the year 2023.

2. Update in Young Disabled Credit amount

The updated young disabled credit amount is as under:

3. Increase in statutory minimum wages

The statutory minimum wages have been revised for the tax year 2023.

For detailed information, kindly refer to the update titled as “Increase in statutory minimum wages for 2023” released earlier on this page.

4. Update in Employee Insurance Rates

The employee insurance premium rates have been updated as under:

Depending on the Size of the employer the low or high premium will be applied, refer to Table 9 of the below link for details on determining that criteria.

5. Update in Work Resumption Fund (Whk) premium rates

The sector-wise rates of Whk premium, which are provided in Table 10, have been updated for 2023 as provided below. These rates are applicable to small employers.

6. Update in Health Insurance Rates

7. Update in maximum premium wage

The maximum wage threshold has been updated as under :

8. Update in Work cost regulation – 80% final tax

For 2023, Work Cost Regulation for the total taxable wage up to EUR 400.000 has been changed to 3% from 1,7% and the additional 1,18% on the excess of total taxable wage over EUR 400.000 remains the same.

9. Update in Tax free travel and work from home allowance

For 2023, the tax-free travel allowance incurred by employees travelling for business purposes and tax- free work from home allowance limits has been increased as under

10. Update in RVU exemption threshold

Employees are provided with severance pay on termination. If severance pay is provided as part of early retirement scheme (RVU scheme) then, employees are eligible for a maximum tax exemption, as under, only if the benefit is passed on to them within a period of 36 months (about 3 years) before reaching pension age:

B. Statutory Compliance Release Date: December 05, 2022

C. Effective Date: January 01, 2023

A. Update

For the Tax Year 2023, Belastingdienst has provided the updated premium percentage for the purpose of contribution to Whk by the employers with employees covered under Sheltered Employment Act (WSW) in sectors 64 and 66, namely employees of government, provinces, municipalities, water boards and other institutions. The applicable percentages are mentioned below:

B. Statutory Compliance Release Date: November 22, 2022

C. Effective Date: January 01, 2023

A. Update

First edition of the Payroll Newsletter (‘Newsletter’) for the Tax Year 2023 has been released by Belastingdienst. The newsletter provides the details related to withholding and payroll taxes effective from January 01, 2023. The proposed legislation is yet to be passed in the House of Representatives or the Senate. As a result, proposed measures may still change and will therefore be followed by further newsletters.

Refer below the relevant payroll updates proposed in the first edition of the Newsletter:

1. Increase in tax free travel allowance

   The tax-free travel allowance provided to employees travelling for business purposes has been proposed to be increased from Euro 0,19 per km to Euro 0,21 per km for the tax year 2023.

2. Increase in tax free work from home allowance

   The maximum tax-free working from home allowance provided to employees has been proposed to be increased from EUR 2,00 to EUR 2,15 per working day for the tax year 2023.

3. Update on Work Cost Regulation

   In 2022, the Work Cost Regulation for the total taxable wage up to EUR 400.000 is counted as 1,7% of EUR 400.000 and additional 1,18% on the excess of total taxable wage over EUR 400.000.

   In 2022, the Work Cost Regulation for the total taxable wage up to EUR 400.000 is counted as 1,7% of EUR 400.000 and additional 1,18% on the excess of total taxable wage over EUR 400.000.

4. Reduction in Differentiated premium Invalidity Insurance Fund ( Aof)

   The low Aof Premium applies to small employers and high Aof premium applies to medium sized and large employers. However, to accommodate medium enterprises also under this low Aof premium category from the tax year 2023 revision in Aof premium has been decided. The exact reduced figure will be provided in payroll newsletter appendix later.

5. No change in General Unemployment Fund premium (AWf) applicability

   For the tax year 2023, no changes have been made on the applicability of low and high AWf premium under different employment contracts.

6. Temporary extension of low-income benefit (LIV)

   An employer is entitled to LIV, if low wage employees are hired subject to satisfaction of certain conditions. LIV benefit amount has been changed from EUR 0,78 to EUR 0,63 per worked hour and from EUR 1.520 to EUR 1.242 per employee per calendar year for the tax year 2023 .

7. Change in addition of a company car without CO 2 emissions (Electric Cars):

   	Car without CO2 emission		Car with CO2 emission
   	For the tax year 2023	For the tax year 2023	For the tax year 2022	For the tax year 2022
   Rate of taxable addition	16%	16%	22%	22%
   Capping amount (in Euros)	30.000	35.000	-	-
   Reduction in discount (percentage/amount in Euros)	6%/1.800	6%/2.100	-	-

   The cap does not apply to hydrogen cars and cars with integrated solar panels.

8. Change in 30% Ruling

   In the tax year 2022, employers may treat a maximum of 30% of the taxable wage of employees hired from another country to Netherlands as tax exempt or reimburse the actual territorial cost incurred. This exemption is a compensation for the extraterritorial costs incurred on stay outside their country of origin.

   From the tax year 2023, employers will have an option to annually apply 30% exemption or reimburse the actual territorial cost by making a choice in the beginning of the wage period and that applies for the entire year. This option can be changed for the next year if needed.

   In case of new joiners, the following rule will apply:

   • If application is submitted within 4 months from the start of work, choice of applying 30% exemption of actual cost reimbursement can be made effective from beginning of the work.
   • If application is submitted after 4 months from the start of work, choice of applying 30% exemption of actual cost reimbursement can be made effective from month of submission of application. For the prior periods, only actual cost can be reimbursed.

   From the tax year 2024, the tax exemption of 30% is applicable only on the maximum cap amount set by Top Income standards Act (WNT Standard). The WNT Standard is Eur 216.000 for 2022 and it will be indexed annually for future years and will be announced later. In case an employee works for part of the year then the annual maximum capping needs to be compared with the annual wage only, It is arrived at by converting the wage for actual days worked to wage for 260 days. If an employer has already applied for this exemption in the tax year 2022, then this capping applies to those employees only from 2026. For more details and examples, kindly refer to the below link.

9. Change in Anonymous rate conditions

   If an employee does not provide the employer with complete or correct payroll information such as name, address, BSN number etc., then anonymous rate of 52% is applied for those periods, while regular wage tax applies only from the moment when complete information is made available. But, from the tax year 2023, it will be possible to restore the wage tax paid at 52% to regular tax if all the required information is furnished within that year.

10. State pension age (AOW)

    The state pension age has been changed to 66 years and 10 months for the tax year 2023 from 66 years and 7 months.

11. Changes to the payroll tax return

    From the tax year 2023, following new sections and changes will be applicable:

    • New sections for AWf Premium in collective section:
      1. a. Total increase in the cumulative premium wage AWf benefit
      2. b. Total AWf premium payment
    • New sections for AWf Premium in nominative part:
      1. a. Accretion in cumulative premium wage AWf benefit
      2. b. Premium AWf benefit
    • New sections for Whk Premium:
      1. a. Total increase in the cumulative premium wage Whk
      2. b. Accretion in cumulative premium wage Whk
    • Change in the description of income relationship/income code type 31 pertaining to ZW/WAZO benefits. The term “Work and Care Act (WAZO)” has been added to the earlier description of “Benefit under the Sickness Benefits Act (ZW) and voluntary insurance under the Sickness Benefits Act”.

      For more details and examples, kindly refer to the below link.

B. Statutory Compliance Release Date: November 15, 2022

C. Effective Date: January 01, 2023

Draft Budget proposal has been submitted by The Dutch Government on September 20, 2022, to the Parliament covering amendments on numerous fronts like Income tax, housing, healthcare, education, climate etc., The major changes focus of the Government is to control labour crises and support the masses affected by inflation, Ukraine war. Below are the legislative proposals impacting payroll:

A. Update

a) Change in Tax bracket and Rates

• The annual payroll tax bracket and the corresponding rates for wage tax and national insurance contributions of resident taxpayers have been proposed as below:

• For taxpayers younger than state pension age

• For taxpayers older than state pension age and born in 1946 or later

• For taxpayers older than state pension age and born before 1946

b) Change in Tax credit limits

The general and elderly tax credits have been proposed to be increased as under:

c) Increase in Young handicapped discount

The credit limit for young disabled persons have been proposed to increase as under:

d) Increase in Tax free travel allowance

Earlier employer could provide a tax-free travel allowance of Euro 0,19 per km to employees travelling for business purposes but now it has been proposed to be increased to Euro 0,21 per km to help all the individuals to manage the surge in fuel prices from the effective date mentioned under.

e) Capping for Extra territorial cost exemption

Employees temporarily posted abroad or to Netherlands may receive compensation related to extraterritorial costs owing to increase in living cost in the new country. Such compensation received may be treated as tax exempt up to a maximum of 30% of their taxable wage, regardless of the actual amount for extraterritorial costs incurred on stay outside their country of origin if they satisfy certain conditions. Later in the Spring Memorandum for 2023 it was proposed to introduce a maximum annual salary cap (Balkenende standard) of EUR 216.000 as the tax exemption. To make it fairer, the standard capping has been proposed in the budget to be introduced effective from January 01,2024 and in case of employees already receiving the 30% benefit in the tax year 2022 the capping will be made applicable from January 01,2026. For the tax year 2023, The budget proposes to provide employees with an option to opt for reimbursement of actual extraterritorial expense or with flat 30% capping in the beginning of the tax year and that applicability remains the same for whole tax year.

f) Update on Work cost regulation

In 2022, The Work Cost Regulation for the total taxable wage up to EUR 400.000 is counted as 1,7% of EUR 400.000 and additional 1,18% on the excess of total taxable wage over EUR 400. 000.

The current Budget proposes to increase the rate from 1,7% to 1,92% for the portion of taxable wage up to EUR 400.000.

g) Increase in Minimum wage

The minimum wage has been proposed to be increased by 10,15% for the first time since its introduction in 1969 mainly to aid both low and middle-income earners to improve their standard of living along with other benefits linked to minimum wage.

B. Statutory Compliance Release Date: September 20, 2022

C. Effective Date: January 01, 2023

A. Update

In furtherance to the earlier announcement made on the Budget day to increase the minimum wage, the Dutch Government in the Official Gazette, released on October 07, 2022 has published the revised statutory minimum wages for the tax year 2023 as under:

B. Statutory Compliance Release Date: October 07, 2022

C. Effective Date: January 01, 2023

A. Update

The Dutch Cabinet on September 20,2022, the Budget Day, planned to increase the minimum wage for the first time since its introduction in 1969 mainly to make work more rewarding and also to curb high inflation. Thus, the Council of Ministers accepted the proposal submitted by Minister Van Gennip of Social Affairs and Employment to increase the minimum wage by 10,15% i.e., Euro 12,4 per hour for individuals working in 36- hour work week as well as all other benefits linked to minimum wage effective from January 01, 2023. This will aid both low and middle-income earners to improve their standard of living.

Further, the House of Representatives have adopted the proposal to provide the minimum hourly wages effective from January 01, 2024 which is currently set at monthly level.

B. Statutory Compliance Release Date: September 23, 2022

C. Effective Date: January 01, 2023, and January 01, 2024

A. Update

If an employer does not receive the below-mentioned payroll data from the employee on or before the first day of employment then, the anonymous rate of 52%, without considering the tax credit, will be applied:

1. Name and Initials of the employee
2. Burgerservicenummers/Citizen service number (BSN)
3. Street and house number
4. ZIP code and address
5. Country and region
6. Date of Birth
7. Phone Number

But if an employee has applied for BSN and there is delay in issuing the same by municipality without any default on part of the employee then, a request can be made not to apply anonymous rate through mail or letter to tax office.

B. Statutory Compliance Release Date: September 08, 2022

C. Effective Date: September 08, 2022

A. Update

In furtherance to the earlier announcement dated November 23, 2021 to postpone the release of Income Ratio Decree (IKV) to January 01, 2024, there is one more letter presented to the House of Representatives basis which the State Secretary for Social Affairs and Employment has announced to postpone the release of IKV further to January 01, 2025.

The reason for further postponement of the Decree has been provided as lack of clarity in the disclosure of employer payments and the actions needed to be taken by both employers and software providers in this regard.

B. Statutory Compliance Release Date: July 14, 2022

C. Effective Date: January 01, 2025

A. Update

Employees temporarily posted abroad or to Netherlands may receive compensation related to extraterritorial costs owing to increase in living cost in the new country. Such compensation received may be treated as tax exempt up to a maximum of 30% of their taxable wage, regardless of the actual amount for extraterritorial costs incurred on stay outside their country of origin if they satisfy certain conditions.

On May 20, 2022, the Dutch Government released the Spring Memorandum for 2022 proposing to introduce a maximum salary cap (Balkenende standard) of EUR 216.000 for extraterritorial tax benefit i.e., only expatriate employees within this salary capping are eligible for 30% exemption on their taxable wage. Earlier, there was no such capping. More details on the implementation of the scheme are awaited.

B. Statutory Compliance Release Date: May 20, 2022

C. Effective Date: To be announced

A. Update

Income Ratio Decree (IKV) lays down the concept of income ratio for the purpose of Wage Declaration when an employee is having multiple employment relationships with the same employer. Till date, there has been no official document on income ratio stating the significance and use. Income Ratio Decree was planned to be released in 2023 but it has been pushed to 2024.From January 01,2024 the Income Ratio Decree will regulate what an IKV is and when it starts and ends. It will also assist in determining, inter alia, if an employee should be included in new income ratio or in separate income ratios of the Wage Declaration.

With this newly released version of Income Ratio Knowledge document, handling of income ratio for different scenarios have been made clearer. The document also provides a description of the changes expected from the Decree. For detailed information, kindly visit the source provided below.

B. Statutory Compliance Release Date: March 03, 2022

C. Effective Date: March 03, 2022

A. Update

The employer can request Uitvoeringsinstituut Werknemersverzekeringen(UWV) to carry own risk for Sickness Benefit. In that case, the employer does not have to contribute to UWV for Sickness Benefit (ZW) portion of variable premium disablement benefits i.e., gedifferentieerde premie whk.

If a medium or large sized employer terminates the own-risk carrier status as on January 01 or July 01 of the tax year through an application, in that case, a ZW premium component is required to be paid.

Currently, this premium is at least half of the ZW premium component (lower premium).

From January 01, 2024, the premium will be at least the full ZW premium component (higher premium) of that sector. Please refer to the below table for details:

B. Statutory Compliance Release Date: March 08, 2022

C. Effective Date: January 01, 2024

A. Update

Employees temporarily posted abroad or to Netherlands may receive compensation related to extraterritorial costs owing to increase in living cost in the new country. Such compensation received may be treated as tax exempt up to a maximum of 30% of their taxable wage, regardless of the actual amount for extraterritorial costs incurred on stay outside their country of origin if they satisfy certain conditions.

One condition to claim the tax exemption on such income is that annual taxable salary should be higher than the prescribed amount which has been amended as under for 2022:

All other conditions continue to remain the same without any change.

B. Statutory Compliance Release Date: February 03, 2022

C. Effective Date: January 01, 2022

A. Update

Belastingdienst has released Model Annual Statement and Wage Statement for the Tax year 2022. The column named “Levensloopverlofkorting” pertaining to Life-course leave discount has been removed because the transitional provision regarding the life-course savings scheme is no longer applicable from the Tax year 2022.

B. Statutory Compliance Release Date: January 01, 2022

C. Effective Date: January 01, 2022

A. Update

The payroll tax tables, viz. White Tax Table, Green Tax Table, special Tax Table, and conversion tables, for both residents and non-residents for the tax year 2022 have been released.

B. Statutory Compliance Release Date: January 04, 2022

C. Effective Date: January 01, 2022

A. Update

On September 21, 2021, the Cabinet sent the legislative proposals to the Dutch Parliament, and on December 27, 2021, Ministry of Finance enacted these proposals. For detailed information on the relevant proposals enacted, kindly refer to the update titled “Tax plan 2022” released earlier on this page.

B. Statutory Compliance Release Date: December 27, 2021

C. Effective Date: January 01, 2022

A. Update

Belastingdienst has released an appendix to the earlier issued newsletter. It contains updated rates for payroll taxes for the tax year 2022 as under:

A. Updated Tax Tables

The annual payroll tax slabs, and rates for wage tax and national insurance contributions have been revised. The revised payroll tax slabs and rates for residents will be as under:

The payroll tax tables, viz. White Tax Table, Green Tax Table, special Tax Table, and conversion tables for both residents and non-residents are yet to be released for the year 2022.

B. Update in Young Disabled Credit amount

The credit limit for young disabled has been updated as under:

C. Increase in statutory minimum wages

The statutory minimum wages have been revised for 2022. For detailed information, kindly refer to the update titled “Increase in statutory minimum wages” released earlier on this portal.

D. Update in Employee Insurance Rates

The employee insurance premium rates for 2022 have been updated. For detailed information, kindly refer to the update titled “Changes in Employee and National insurance schemes for 2022” released earlier on this portal.

E. Update in Work Resumption Fund (Whk) premium rates

The sector-wise rates of Whk premium, which are provided in Table 10, have been updated. These rates are applicable to small employers. You will find the updated Table 10 in “Sources” below.

F. Update in maximum premium wage

The maximum wage threshold has been updated for 2022. For detailed information, kindly refer to the update titled “Changes in Employee and National insurance schemes for 2022” released earlier on this portal.

G. Update in Health Insurance Rates

The Health Insurance rates for 2022 have been updated. For detailed information, kindly refer to the update titled “Changes in Health insurance scheme for 2022” released earlier on this portal.

H. Update in Work cost regulation – 80% final tax

Work Cost Regulation for the total taxable wage exceeding EUR 400.000 will be 1,70%, and additional 1,18% will be charged on the excess of total taxable wage over EUR 400.000.

B. Statutory Compliance Release Date: December 23, 2021

C. Effective Date: January 01, 2022

A. Update

Erstwhile, if an employee was in contract with the employer for an indefinite period of time, which is recorded in writing and not an on-call contract, low AWf premium would have been applied on the normal agreed salary. Subsequently, for the same employee if there is temporary extension of working hours, under the same employment conditions, then the employer would have applied high AWf premium on the salary paid for the extended working hours by considering the extension of hours as a separate fixed-term employment contract.

In this regard, the State Secretary for Social Affairs and Employment has released a change in AWf applicability on the temporary extension of working hours with retroactive effect from January 01, 2020. As per the change, there is no separate employment contract for the extended working hours and only low AWf premium is applied on salary paid for extended working hours. The employer can get back the previously overpaid AWf premium by correcting the payroll tax returns for 2020 and 2021. This change applies for 2020, 2021 and 2022.

B. Statutory Compliance Release Date: December 15, 2021

C. Effective Date: January 01, 2020

A. Update

Regulation for determining premium percentages and maximum wage limit for health insurance has been released by the Minister of health, welfare and sport in agreement with Minister of finance and Minister of Social Affairs and Employment. Below are the relevant updates brought by this Regulation.

a) Update in maximum wage limit

The maximum wage threshold has been updated as under:

b) Update in Health Insurance Rates

Health Insurance (Zvw) rates have been updated. Accordingly, the premium rates for 2022 are as under:

B. Statutory Compliance Release Date: November 29, 2021

C. Effective Date: January 01, 2022

A. Update

Regulation No.2021-0000165813 determining premium percentages for Employee and National Insurance Schemes, maximum wage premium for Employee insurance schemes and Surcharge for childcare allowance 2022 has been released by the State Secretary for Social Affairs and Employment. Below are the relevant updates brought by this Regulation.

a) Update in maximum wage limit

The maximum wage threshold has been updated as under:

b) Update in Employee and National Insurance Rates

As the National Insurance premium amounts are withheld together with the wage tax as one amount the changes will be released along with tax tables for 2022. The Disability Fund (Aof) rates including Surcharge for childcare allowance have been updated. Accordingly, the premium rates for 2022 are as under:

B. Statutory Compliance Release Date: November 16, 2021

C. Effective Date: January 01, 2022

A. Update

In a letter to the House of Representatives, the State Secretary for Social Affairs and Employment has announced to postpone the Income Ratio Decree (IKV) to be effective from January 01,2024 which was earlier announced to be applicable from January 01, 2023.

IKV lays down the concept of income ratio where an employee is working under multiple employment relationship with the same employer. The reason for postponement is that a part of the IKV requires further practical interpretation for implementation.

One of such situations could be where the employer pays benefits under Sickness Benefits Act (ZW) or Work and Care Act (WAZO) on behalf of the Employee Insurance Agency (UWV) and at the same time also wages from current employment while the employee is still employed, which means that a proper implementation of the decision as of January 01,2023 is no longer feasible.

B. Statutory Compliance Release Date: November 23, 2021

C. Effective Date: January 01, 2024

A. Update

Belastingdienst has released two editions of Payroll Newsletter for the Tax Year 2022. Below are the consolidated and relevant payroll updates from these editions.

1. Disclosure obligation for those obliged to keep records

The new disclosure obligation provides a legal basis for the provision of data, stating the citizen service number (BSN) when reporting amounts paid to third parties. The legal obligation to provide this information will apply to two groups of persons and they are as follows:

• Withholding agents within the meaning of the Wages and Salaries Tax Act 1964 who make payments to a natural person for work and services performed for the withholding agent himself or a company affiliated with the withholding agent.
• Collective management organizations (CMOs) acting on behalf of a group of right holders to collect and distribute fees for a copyright or related right on a non-profit basis and which make one or more payments to a natural person.

Payments for the following work and services are excluded from the disclosure obligation:

• The activities and services performed as an employee, artist or professional athlete or member of a foreign company as referred to in the Wages and Salaries Tax Act 1964 or as a resident of another country acting in the capacity of artist, professional athlete or member of a company no tax is due in the Netherlands;
• The activities performed as a volunteer as referred to in the Wages and Salaries Tax Act 1964;
• The activities and services for which an invoice has been issued as referred to in the Turnover Tax Act 1968 on which the turnover tax is stated;
• The fees for a copyright or related right to heirs.

The new legal disclosure obligation does not replace the entire process of the current requesting of amounts paid to third parties. The existing data submission process i.e., without requesting information from the BSN will be maintained for the time being for payments that do not fall under the new disclosure obligation to be introduced.

At the end of the calendar year, the withholding agents and the CMOs that make payments to natural persons who are not exempted must submit the following information to the tax authorities:

• The name, address, social security number and date of birth of the recipient of the payment.
• The amounts paid in the calendar year, including any expense allowances. The changes will come into effect on January 01, 2022. The new data delivery will take place for the first time between January 01, 2023 and January 31, 2023, because the data must be submitted to the tax authorities after the end of the calendar year at the latest on January 31, 2023.

2. Differentiated contribution to the Disability Fund (Aof)

The basic Aof premium will be replaced by a differentiated Aof premium. Small employers will pay a lower differentiated premium Aof on the premium wages of their employees than other (medium and large) employers.

An employer will be regarded as small if the employer's premium wage bill amounts to a maximum of 25 times the average premium wage per employee per year. The average premium wage per employee is determined annually by the Employee Insurance Agency (UWV). For the assessment of whether an employer should be regarded as small, the employer's premium wage for year t-2 applies. This means that for the premium for the year 2022, the premium wage for the year 2020 is relevant. A starting employer is always regarded as a small employer during the first two years.

An employer always owes the high Aof premium for the following benefits, allowances and wage payments:

• Benefits under the employee insurance schemes (WAO, WIA, ZW and WW). This applies if the employer pays the benefit to his employee on behalf of UWV (employer payment) or if the employer does this as a self-insurer
• WAZO benefits in connection with pregnancy, childbirth, adoption, foster care and additional birth leave
• Allowances under the Supplements Act
• The wages from WSW employment.
• Redundancy pay under the old scheme from before 2001.

The surcharge for the Childcare Act (Wko) continues to apply to the differentiated Aof premium. On top of the low or high premium, Wko surcharge has to be calculated jointly on both low and high Aof.

3. Differentiated contribution to the Resumption of Work Fund (Whk)

The definition of a small employer for the differentiated Whk premium will change. The limit for a small employer will go from 10 to a maximum of 25 times the average premium wage per employee per year. On the notification/decision for the differentiated Whk premium, the Tax and Customs Administration will also indicate whether an employer is small or medium or large for the Aof.

4. Changes to the payroll tax return

I. New sections for Disability Fund

There will be 3 separate sections for the increase in the premium wage Aof namely:

• The increase in the premium wage Aof low
• The increase in the premium wage Aof high
• The increase in the premium wage Aof that is part of a benefit.

There will also be 3 separate sections for the premiums owed on the premium wage Aof namely:

• Total premium Aof low
• Total premium Aof high
• Total premium Aof benefit.

Further, there will be a separate section for Wko storage.

II. Incidental Income Reduction Code

Until August 02, 2022, this additional birth leave only applies to employees who are insured under the employee insurance schemes. From August 02, 2022, this scheme will also apply to uninsured employees. For the 'Additional birth leave' code 'G' is applicable in the payroll tax return for 2021. Code 'G' will expire on January 01, 2022. From January 2022, code 'K' will be applicable for both types of leave (paid parental leave and additional birth leave). If an employee, for whom you still used code 'G' in the December 2021 declaration and continues the supplementary birth leave in January 2022, code 'K' must be used in the January declaration.

III. Terms of employment amount

Due to the emergence of various forms of budgets to be spent by the employee (such as individual choice budget (IKB), personal choice budget (PKB), employee benefit or similar names), a change is being made in two new sections of the payroll tax return from 2022:

• Accrual amount of employment conditions
• Withdrawal of terms of employment amount

This term also includes 'Extra salary period' up to and including 2021. In connection with this, the two headings 'Extra salary period' and 'Accrued entitlement extra period salary' will be cancelled.

For more details and examples refer to the below link.

• Income relationship type code / income code

• Code 35 pertaining to follow-up benefit under the New Unemployment Insurance Act (nWW) will lapse because such benefits no longer occur.
• Code 54 pertaining to withdrawal of life-course credit will be cancelled because the transitional provision regarding the life-course savings scheme has also expired in 2021.

• Nature of the employment relationship code

The nature of the employment relationship Code 10 for the employee under Sheltered Employment Act (WSW) will expire in 2022 and it will be replaced by 4 new codes as follows:

• Code 21: WSW sheltered work
• Code 22: WSW secondment to a regular employer
• Code 23: WSW supported work
• Code 24: Sheltered Work Participation Act

Previously an employer is not entitled to wage cost benefit if an employee’s employment is based on Sheltered Employment Act (WSW). But now an employer is entitled to wage cost benefit if code 23 applies. Further in anticipation of the introduction of Job Agreement Act bill, an employer may be entitled to a wage cost advantage under code 22 also. Therefore Codes 21 to 24 are necessary for the Employee Insurance Agency (UWV) to determine the employer's right to a wage cost advantage for the job agreement.

• Code reason for termination of Employment Contract

Code 02 indicating the termination by the employer with the permission of Employee Insurance Agency (UWV) will expire in 2022 and it will be replaced by 2 new codes, as follows:

• Code 05: Termination by the employer due to long-term incapacity for work with permission from Employee Insurance Agency (UWV)
• Code 06: Termination by the employer for economic reasons with the permission of Employee Insurance Agency (UWV)

If there is termination of an employment contract with code 02 in 2021 or earlier and any supplementary payment has been made in 2022, then code 05 or 06 must be mentioned in 2022.

• Wage Tax Table Code 999

Previously a general explanation under section 30.14 has been provided in the payroll taxes handbook 2021 for the usage of Code 999 but frequently this code is applied incorrectly, to avoid this further explanation has been provided on its usage and they are as follows

Code 999 should be used under following circumstances:

• If an employee is insured for the employee insurance schemes, but not liable for tax (LB) and not liable for national insurance contributions
• If there is a different rate as with a ruling.
• If there are wages that are exempt, as with certain pensions of priests.

Code 999 should not be used under following circumstances:

• If there is a 53rd week, in which employer pay 5 weeks in the 13th period. Then conversion of the week or four-week table applies hence code of week or four-week table should be used.
• If an employee asks for a (voluntary) higher deduction than indicated in the table. Then table code of the respective table that would have applied without voluntarily higher withholding should be used.
• There is an interest benefit from a staff loan from ex-employees. Depending on the situation, the time slot table or the special rewards table must be used.

5. Legislative proposal amending the addition of a company car without CO2 emissions

For cars without CO2 emissions, a discount on the addition rate of 22% applies. The Cabinet proposes to reduce the discount on the addition by 6%. It is also proposed to reduce the cap from EUR 40.000 to EUR 35.000.

Due to these proposed changes, the discount for a company car without CO2 emissions in 2022 will therefore be a maximum of EUR 2.100. The intention is to further reduce the cap to EUR 30.000 in 2023. The cap does not apply to hydrogen cars and cars with integrated solar panels.

For more details, kindly refer to the earlier update “Tax Plan 2022” on this page.

6. Legislative proposal targeted exemption from working from home costs

The cabinet has proposed a specific exemption that makes it possible to provide a tax-free allowance for the extra costs incurred by an employee by working from home. This specific exemption is in addition to the existing specific exemptions for tax-free reimbursement, provision and making available necessary tools, health, and safety facilities etc.

For more details, kindly refer to the earlier update “Tax Plan 2022” on this page.

7. AOW age

The state pension age will be raised by 3 months to 66 years and 7 months.

Payroll Taxes Handbook for 2022 will be announced later.

B. Statutory Compliance Release Date: November 23, 2021

C. Effective Date: January 01, 2022

A. Update

Payroll Newsletter for Tax Year 2022 (first edition) has been released and below are the relevant payroll updates:

1. Disclosure obligation for those obliged to keep records

The new disclosure obligation provides a legal basis for the provision of data, stating the citizen service number (BSN) when reporting amounts paid to third parties. The legal obligation to provide this information will apply to two groups of persons and they are as follows:

• Withholding agents within the meaning of the Wages and Salaries Tax Act 1964 who make payments to a natural person for work and services performed for the withholding agent himself or a company affiliated with the withholding agent.
• Collective management organizations (CMOs) acting on behalf of a group of right holders to collect and distribute fees for a copyright or related right on a non-profit basis and which make one or more payments to a natural person.

Payments for the following work and services are excluded from the disclosure obligation:

• The activities and services performed as an employee, artist or professional athlete or member of a foreign company as referred to in the Wages and Salaries Tax Act 1964 or as a resident of another country acting in the capacity of artist, professional athlete or member of a company no tax is due in the Netherlands;
• The activities performed as a volunteer as referred to in the Wages and Salaries Tax Act 1964;
• The activities and services for which an invoice has been issued as referred to in the Turnover Tax Act 1968 on which the turnover tax is stated;
• The fees for a copyright or related right to heirs.

The new legal disclosure obligation does not replace the entire process of the current requesting of amounts paid to third parties. The existing data submission process i.e., without requesting information from the BSN will be maintained for the time being for payments that do not fall under the new disclosure obligation to be introduced.

At the end of the calendar year, the withholding agents and the CMOs that make payments to natural persons who are not exempted must submit the following information to the tax authorities:

• The name, address, social security number and date of birth of the recipient of the payment.
• The amounts paid in the calendar year, including any expense allowances. The changes will come into effect on January 1, 2022. The new data delivery will actually take place for the first time between January 01, 2023 and January 31, 2023, because the data must be submitted to the tax authorities after the end of the calendar year at the latest on January 31, 2023.

2. Differentiated contribution to the Disability Fund (Aof)

The basic Aof premium will be replaced by a differentiated Aof premium. Small employers will pay a lower differentiated premium Aof on the premium wages of their employees than other (medium and large) employers.

An employer will be regarded as small if the employer's premium wage bill amounts to a maximum of 25 times the average premium wage per employee per year. The average premium wage per employee is determined annually by the Employee Insurance Agency (UWV). For the assessment of whether an employer should be regarded as small, the employer's premium wage for year t-2 applies. This means that for the premium for the year 2022, the premium wage for the year 2020 is relevant. A starting employer is always regarded as a small employer during the first two years.

An employer always owes the high Aof premium for the following benefits, allowances and wage payments:

• Benefits under the employee insurance schemes (WAO, WIA, ZW and WW). This applies if the employer pays the benefit to his employee on behalf of UWV (employer payment) or if the employer does this as a self-insurer
• WAZO benefits in connection with pregnancy, childbirth, adoption, foster care and additional birth leave
• Allowances under the Supplements Act
• The wages from WSW employment.
• Redundancy pay under the old scheme from before 2001.

The surcharge for the Childcare Act (Wko) continues to apply to the differentiated Aof premium. On top of the low or high premium, Wko surcharge has to be calculated jointly on both low and high Aof.

3. Differentiated contribution to the Resumption of Work Fund (Whk)

The definition of a small employer for the differentiated Whk premium will change. The limit for a small employer will go from 10 to a maximum of 25 times the average premium wage per employee per year. On the notification/decision for the differentiated Whk premium, the Tax and Customs Administration will also indicate whether an employer is small or medium or large for the Aof.

4. Changes to the payroll tax return

• New sections for Disability Fund

There will be 3 separate sections for the increase in the premium wage Aof namely:

• The increase in the premium wage Aof low
• The increase in the premium wage Aof high
• The increase in the premium wage Aof that is part of a benefit.

There will also be 3 separate sections for the premiums owed on the premium wage Aof namely:

• Total premium Aof low
• Total premium Aof high
• Total premium Aof benefit.

Further, there will be a separate section for Wko storage.

• Incidental Income Reduction Code

Until August 02, 2022, this additional birth leave only applies to employees who are insured under the employee insurance schemes. From August 02, 2022, this scheme will also apply to uninsured employees. For the 'Additional birth leave' code 'G' is applicable in the payroll tax return for 2021. Code 'G' will expire on January 01, 2022. From January 2022, code 'K' will be applicable for both types of leave (paid parental leave and additional birth leave). If an employee, for whom you still used code 'G' in the December 2021 declaration and continues the supplementary birth leave in January 2022, code 'K' must be used in the January declaration

• Terms of employment amount

Due to the emergence of various forms of budgets to be spent by the employee (such as individual choice budget (IKB), personal choice budget (PKB), employee benefit or similar names), a change is being made in two new sections of the payroll tax return from 2022:

• Accrual amount of employment conditions
• Withdrawal of terms of employment amount

This term also includes 'Extra salary period' up to and including 2021. In connection with this, the two headings 'Extra salary period' and 'Accrued entitlement extra period salary' will be cancelled.

For more details and examples refer to the below link.

B. Statutory Compliance Release Date: October 28, 2021

C. Effective Date: January 01, 2022

A. Update

The Dutch Official Gazette has published the revised statutory minimum wages as under:

B. Statutory Compliance Release Date: October 22, 2021

C. Effective Date: January 01, 2022

A. Update

Currently, all parents have the right to 26 weeks of parental leave during the first 8 years after the birth of their child. Unless an agreement was made previously with the employer, that leave is largely unpaid. From August 02, 2022, parents will receive 9 additional weeks of partially paid parental leave which will be paid by the Dutch government. This may be taken during the first year after a child is born. The new arrangement will allow parents 9 weeks of leave at 50% of their daily salary, with pay capped at 50% of the maximum daily wage. The Employee Insurance Agency (UWV) will be responsible for funding this 50% of salary for the nine weeks’ parental leave.

B. Statutory Compliance Release Date: October 12, 2021

C. Effective Date: August 02, 2022

A. Update

On September 21, 2021, the cabinet sent the legislative proposals to the Dutch Parliament. Following are the few legislative proposals impacting payroll.

a) Update in Work cost regulation – 80% final tax

In 2022, the budget for Work Cost Regulation for the total taxable wage exceeding EUR 400.000 is proposed to be calculated as 1,7% of EUR 400.000 and additional 1,18% on the excess of total taxable wage over EUR 400.000.

b) Update in taxable value of a company provided emission-free car

The value of taxable car perquisite is calculated basis the year in which the car is released to road. A reduced addition percentage applies for emission-free cars up to a certain limit, above which the regular addition percentage of 22% applies. The cabinet proposes to reduce the limit for the reduced addition percentage to EUR 35.000 for cars that will be registered in 2022. If an employer makes a new emission-free car available to an employee in 2022 and the car is also used for private purposes, this means that the addition is 16% on the first EUR 35.000 of the car's catalog value and 22% on the excess.

For cars that will be registered in 2023, the limit is proposed to be further reduced to EUR 30.000. The cap for the reduced addition percentage does not apply to hydrogen and solar cell cars.

Accordingly, for following cars to be released to road in 2022, the taxable value of the benefit in kind is proposed to be calculated as under:

For cars to be released to road in 2023, the taxable value of the benefit in kind is proposed to be calculated as under:

c) Targeted exemption on working from home allowance

Currently costs incurred as part of working from home cannot be reimbursed tax-free fully. The cabinet is proposing an exemption for a home working allowance of a maximum of EUR 2 per working day at home.

It is possible to provide the tax-free allowance for work from home in the form of a fixed allowance. The same system applies for fixed travel allowance. This means that an employee who works at home for at least 128 days per calendar year, can receive a fixed tax-free work from home allowance based on 214 working days at home. If the employee works part of the day from home and from office, the employer must make a choice between the tax-free working from home allowance and the tax-free travel allowance.

For situations in which work is structurally part of the time from home and part of the time from the workplace, the proposal provides for a combination of the fixed work-at-home allowance and the fixed travel allowance. In such cases, both flat rates can be applied in proportion to the agreed ratio between working from home and in the workplace.

d) Adjustment of tax scheme for stock options

Currently stock options agreed upon by an employer and employee are taxed upon the exercise of the stock option. This also applies if a share is acquired upon exercise that is not freely tradable. The Cabinet proposes to shift the moment of taxation to the moment that the shares acquired during the exercise can be sold. If the tradability of the shares acquired upon exercise is contractually restricted and the shares are listed on the stock exchange, the tax will be levied no later than 5 years after the stock exchange listing or at the time of expiry of the contractual limitation on the tradability of the shares, whichever is earlier. If desired, options on shares that cannot be freely traded can be included for tax purposes when exercised. The moment of taxation for options for tradable shares (such as listed shares) does not change.

B. Statutory Compliance Release Date: September 21, 2021

C. Effective Date: January 01, 2022

A. Update

Until January 01, 2022, the fixed travel allowances can be reimbursed tax-free by the employer even if these travel costs are no longer fully incurred as a result of working from home. The condition is that these fixed allowances were already awarded by the employer, as a part of the employment remuneration, before March 13, 2020. For employees with a fixed travel allowance agreed after March 13, 2020, the exception does not apply. Earlier, this exemption was available till October 01, 2021, but now, it has been extended for other 3 months.

B. Statutory Compliance Release Date: August 30, 2021

C. Effective Date: August 30, 2021

A. Update

The government has announced that the AWf premium will be reduced from August 01, 2021 for employers who file payroll taxes on a monthly, six-monthly or annual basis and from August 16, 2021 for employers who file payroll tax returns every 4 weeks. The low premium will be reduced from 2,7% to 0,34%, and the high premium will be reduced from 7,7% to 5,34%.

Based on the different payroll frequencies, the wages on which new rate is applicable changes. For employees receiving monthly wages and filing monthly declaration, new percentage is applied on the wages received from August 01, 2021 and onwards. For employees receiving wages 4 weekly and filing declaration every 4 weeks, new percentage is applied on wagesreceived from August 16, 2021 and onwards. For employees receiving wages per week and filing declaration every 4 weeks, new percentage is applied on wages received from week 33 and onwards. For employees receiving wages per year and filing declaration per year, new percentage is applied on the total wages if wage is received on or after August 01, 2021. For employees receiving monthly wages and filing declaration every six month or annually, new percentage is applied on the wages received on or after August 01, 2021.

If a tax return for a period before the effective date of this AWf premium reduction needs to be revised/corrected, the higher premium percentage that applied in the period for which this tax return was filed will apply.

B. Statutory Compliance Release Date: June 28, 2021

C. Effective Date: August 01, 2021 or August 16, 2021, as the case may be

A. Update

Due to the prescribed working from home and keeping a distance of 1,5 meters, it might not be possible to meet all administrative obligations for payroll taxes during this period. In that case, no consequences will be attached until October 01, 2021.

An example: If identity of the employee based on original proof of identity is not established anonymous rate of 52% will not apply for this employee until October 01, 2021.

B. Statutory Compliance Release Date: May 27, 2021

C. Effective Date: May 27, 2021

A. Update

Until October 01, 2021, the fixed travel allowances can be reimbursed tax-free by the employer even if these travel costs are no longer fully incurred as a result of working from home. The condition is that these fixed allowances were already awarded by the employer, i.e., a part of the employment remuneration, before March 13, 2020. For employees with a fixed travel allowance agreed after March 13, 2020, the exception does not apply.

B. Statutory Compliance Release Date: May 26, 2021

C. Effective Date: May 26, 2021

A. Update

If more than one car is made available to an employee at the same time and all the cars are used for private purpose for more than 500 kms per car per calendar year but there is only one driver’s license in the family/household (spouse, children) of the employee, then the taxable benefit in kind shall be considered as addition of the car with the highest catalogue value, amongst all, till 2021. Effective from January 01, 2022, the taxable benefit in kind shall pertain to the car with the highest addition.

B. Statutory Compliance Release Date: April 29, 2021

C. Effective Date: January 01, 2021, and January 01, 2022

A. Update

Payroll Newsletter for Tax Year 2021 has been released and below are the relevant updates:

a) Update in Work cost regulation – 80% final tax [Covid-19]

In 2021, the budget for Work Cost Regulation for the total taxable wage exceeding EUR 400.000 shall be counted as 3% of EUR 400.000 and additional 1,18% on the excess of total taxable wage over EUR 400.000.

For the total taxable wage up to EUR 400.000, budget shall continue to be calculated as 3% of total taxable wage in 2021, as was applicable in 2020.

b) Expansion of specific exemption from study and training to 2021

If an employee is taking specific training (as declared by Tax and Custom administration) for earning more income and employer is reimbursing cost of these trainings to the employees, then there will be no payroll taxes on these reimbursements, regardless of whether these reimbursements are from current employer or from former employer, as was applicable in 2020.

c) Update in taxable value of a company provided car

The value of taxable car perquisite is calculated basis the year in which the car is released to road. For cars released to road in 2021, the rate to calculate the taxable value of the benefit in kind is provided as under:

d) Relaxation in calculating RVU Tax

The RVU levy of 52% will not be paid by an employer, insofar as the payments under the RVU fall below the exemption threshold of EUR 1.847 per month, subject to certain conditions as specified in the Newsletter.

e) Expansion of Fiscal Scope for saving Extra-Statutory leave

Under this scheme employees can save certain amount of additional leave (insofar the leave entitlements at the end of the calendar year do not amount to more than the working hours per week calculated over a period of fifty weeks) on which no tax is due. With effect from January 01, 2021 the threshold amount is increased from 50 weeks to 100 weeks.

f) State Pension Age continues to be the same

The State Pension Age continues to be 66 years and 4 months in 2021, as was applicable in 2020.

g) Transitional Law for life cycle saving scheme

Life cycle saving scheme was expired on January 01, 2012, however, for 2021 as well transitional law prevails for this scheme. Employee either needs to take out of this scheme or convert it into an entitlement pension scheme up to November 01, 2021. If they fail to do this, the obligation to withhold tax and social security lies with Institution with which life course credit is placed but the same was previously with former employer. For the obligations of the institution, please refer to the Newsletter.

h) Care Bonus for Healthcare Professionals [Covid-19]

Healthcare professionals who performed special services between March 01,2020 and September 01, 2020, because of Covid-19, are eligible for bonus of EUR 1.000 net, if certain conditions are met. No tax needs to be withheld from this bonus as it is covered under employer`s levy and employer will pay 80% final tax on this. For the conditions applicable, please refer to the Newsletter.

i) Clarification of R&D remittance reduction for Public Knowledge Institutions

It has been clarified that Public Knowledge Institutions are ineligible for R&D withholding tax credit if they do not perform activities with the character of research & development work.

j) Changes in the payroll tax return

There are 3 contract indications under the Labour Market Act (Wab) and these need to be mentioned with a “Yes” or “No” in the payroll tax return:

• i) Indication of an employment contract for an infinite period
• ii) Indication of a written employment contract
• iii) Indication of an on-call agreement

From 2021 and onwards, the following contract indications (income codes) need not be mentioned:

• i) Share fishermen (4)
• ii) Musician/artist (6)
• iii) Trainee (7)
• iv) Public law appointment (18)
• v) opting-in scheme (79)
• vi) Other notional employment relationship (81)

k) Pilot web module assessment of employment relationship

A pilot web module for an online assessment of employment relationship through questionnaire is under development. This web module is intended to provide clarity whether an assignment can be performed outside employment or in employment. This distinction is important because the different contract types have major difference in employment protection, social security & tax treatment.

For further details relating to this web module, please refer to Newsletter.

l) Extension of suspension of 30% review situation to calculate Awf low or high premium [Covid-19]

Requirement to apply high premium for employees with a permanent contract and for which an employer has paid more than 30% in a calendar year than the contractually agreed working time stands suspended in 2021 as well.

m) Job related investment discount (BIK)

A new scheme of temporary remittance reduction has been introduced, called as “Baangerelateerde Investeringskorting- BIK” (job related investment discount). The BIK is a remittance reduction granted to employers for investment in new business assets on or after October 01, 2021. This benefit is subject to certain conditions which can be referred to in the Newsletter.

n) Adjustment of amounts of Low-Income benefit

The average hourly wage and amount of the low-income benefit for 2021 will be as follows:

o) Update in maximum wage limit in Social Security contribution calculation

The maximum wage threshold for social security contribution has been updated as under:

p) Update in the rate of employee’s Insurance Premium (SSC)

From January 2021, there is update in rate of contribution of employee insurance premiums (SSC).

q) Update in Young Disabled Credit amount

The updated young disabled credit amount is as under:

r) Update in Work Resumption Fund (Whk) premium rates

The sector-wise rates of Whk premium, which are provided in Table 10, have been updated. These rates are applicable to small employers. The updated Table 10 is available in the Newsletter.

B. Statutory Compliance Release Date: January 28, 2021

C. Effective Date: January 01, 2021

A. Update

Tax Tables, viz. White Tax Table and Green Tax Table, for the tax year 2021 have been updated.

B. Statutory Compliance Release Date: January 28, 2021

C. Effective Date: January 01, 2021