SALARIS NIEUWSBRIEF 2023 / 2024

As of 2024, changes will apply in the payroll administration for your employees. In this newsletter, we will cover the most relevant changes of the coming calendar year in terms of payroll, wage tax and employment law aspects.

In addition, we will also discuss recently implemented changes, relevant future legislation and regulations and a number of questions/relevant topics based on situations that arise in practice.

The following topics have been included in this newsletter:

 Contents

  1. Mobility
    1.1 Increase in travel expenses allowance
    1.2 Widening of exemption for public transport season tickets and off-peak discount passes
    1.3 Addition to income for company cars
  2. Working from home allowance
  3. Social security impact of cross-border working
  4. Utilising the discretionary scope of the work-related expenses scheme
  5. Key points regarding the 30% facility
  6. Partial non-resident tax liability
  7. DBA and the expiring enforcement moratorium
  8. Employed person’s tax credit
  9. Other tax credits
  10. Change in Return to Work Fund contribution
  11. Maximum income assessable for social insurance
  12. Registration of employees’ CO2 emissions
  13. Wage expense allowance for elderly employees to be abolished
  14. Low-income allowance to be reduced
  15. STAP budget to be abolished
  16. Increase in Invalidity Insurance Fund contribution – high rate
  17. Maximum amount of transition payment in 2024
  18. Introduction of statutory minimum hourly wage as of 1 January 2024
  19. Draft bill introducing a Provision of Workers (Accreditation) Act
  20. Compensatory transition payment for business cessation due to employer’s illness – cancelled
  21. ‘Work Where You Want’ Bill – not to be enacted

    1. Mobility

    1.1 Increase in travel expenses allowance
    As of 2024, the tax-free travel expenses allowance will go up from €0.21 to €0.23. The increase in the tax-free travel expenses allowance will enable employers to contribute more to the travel expenses of employees. Please note that the employer is not obliged to increase the travel expenses allowance.

    An employer can also grant a higher tax-free travel expenses allowance than the determined standard amount. Among other things, this can be done by making use of the WKR budget. It is important that the employer designates the surplus as a final levy component.


    1.2 Widening of exemption for public transport season tickets and off-peak discount passes
    The current two schemes for the tax-free provision of public transport season tickets by employers will be replaced by one exemption as part of the work-related expenses scheme. The only requirement for this exemption from 1 January 2024 is that the public transport season ticket is used also for business travel (including commuting). The degree to which the public transport season ticket is used seems to be irrelevant for this widening, because the phrase used is ‘also used for’.


    1.3 Addition to income for company cars
    The addition to income for electric cars remains unchanged in 2024. The addition for new electric cars purchased in 2024 is 16% over the first €30,000. The addition for the part in excess of €30,000 is 22%.

    What is known as the ‘cap’, the part of the list price to which the reduction applies, remains €30,000 in 2024. This threshold reduction will remain applicable up to and including 2025. If this threshold is exceeded, the addition to income percentage will be 22%.

    However, the cap does not apply to zero-emission cars fuelled by hydrogen or cars equipped with integrated solar panels. The proposal is to tighten the current definition for cars with integrated solar panels. The power of the solar panels in watt peak divided by consumption in watt hour per kilometre should be at least 7. The current criterion is that the solar panels must have a minimum power of 1 kilowatt peak.

    2. Working from home allowance

    The tax-free working from home allowance is expected to increase as of 1 January 2024 from €2.15 per day to €2.35 per day. If the employee receives a working from home allowance, careful consideration must be given to the current agreements between employers and employees. In cases of hybrid working, it is important to assess whether current agreements about fixed expense allowances or fixed travel expenses allowances need to be modified. Please note that the employment law aspects will need to be taken into account in addition to the tax-related aspects, and that there is an administrative obligation for the employer to clarify when each employee works from home or at the office.

    3. Social security impact of cross-border working

    The framework agreement on cross-border teleworking within the EU/EEA/Switzerland entered into force on 1 July 2023. As a result, cross-border workers can spend up to 50% of their time working from home without becoming subject to the social security regime of their country of residence. Employers and employees who want to invoke the framework agreement can submit an application to the Social Insurance Bank (SVB) if they meet the conditions. Various countries, such as Belgium, Finland, Spain, Portugal, Sweden, Poland, Germany, France, etc. are parties to the framework agreement.

    If all the conditions are fulfilled, the framework agreement can be invoked in the period between 1 July 2023 and 1 July 2024 with retroactive effect to a maximum of one year. If the application is submitted after 1 July 2024, retroactive effect can be requested for a maximum of three months. It is essential to submit the application in time.

    If you employ staff members who qualify as cross-border workers and want to check whether they meet the conditions of the agreement, then please do not hesitate to contact your advisor.

    4. Utilising the discretionary scope of the work-related expenses scheme

    Through the discretionary scope of the work-related expenses scheme [Dutch: Werkkostenregeling, “WKR”], it is possible to award allowances, benefits and provisions to employees free of tax if no specific exemption applies. In 2023, the discretionary scope of the WKR was widened on a one-off basis to 3% for a wage bill up to €400,000. This widening will no longer apply in 2024. In 2024, the discretionary scope will be 1.92% for a wage bill up to €400,000 and 1.18% for the excess. It is important to review before the end of the year how much of the discretionary scope is left and whether it may have been exceeded. If it was exceeded, the employer will owe a final levy of 80%. In that case, we recommend that you contact your advisor.

    Lastly, our organization has developed a specific WKR tool that allows us to offer you even better advice/take more work off your hands with regard to your WKR administration. Please feel free to ask our payroll administration department for the possibilities.

    5. Key points regarding the 30% facility

    The 2023 Tax Plan announced that the 30% facility would be capped. As of 1 January 2024, therefore, the 30% facility can be applied up to the standard amount under the Executives’ Pay Standards Act [Dutch: Wet normering topinkomens]. Employees who come to the Netherlands and meet the criteria can claim the 30% facility. This means that they will receive up to 30% of their salary free of tax. This measure ensures that they can apply the 30% facility to a salary up to €233,000 (2024). The 30% facility cannot be applied to the part in excess of this standard amount. For expats who already used this facility in 2022, the salary to which the 30% facility may be applied will remain uncapped up to and including 31 December 2025.

    Please note: if the 30% facility is used for only part of the year, the maximum amount must be recalculated in proportion to time.

    Finally, the 30% facility may be cut back even further as of 1 January 2024, provided that the Upper House agrees with this. The 30% facility currently applies for a period of five years. The cutback means that the percentage of 30% will be gradually reduced to 10% over the term of the facility. In concrete terms, this will work as follows: during the first 20 months of the term, 30% of the salary can be paid free of tax. This percentage will be reduced to 20% during the next 20 months, and to 10% during the final 20 months. A transitional scheme will apply to employees who have already been awarded the 30% facility in 2023, or whose secondment started in 2023. We recommend that you already identify the (future) expats within your organization who will be affected by this. In addition, you must be aware of the additional administrative burden which this change will entail. Please contact your advisor to discuss the options and possible alternatives.

    6. Partial non-resident tax liability

    There may also be a cutback as of 1 January 2025 with regard to partial non-resident tax liability, if the Lower House agrees with this. Partial non-resident tax liability means that if an employee lives in the Netherlands and uses the 30% facility, the employee will be regarded as a non-resident taxpayer for the purpose of box 2 and box 3 in his income tax return, despite a tax residence in the Netherlands. A transitional scheme will apply up to and including 31 December 2026 for those who have already been awarded the 30% facility in 2023.

    7. DBA and the expiring enforcement moratorium

    On 1 January 2016, the Assessment of Employment Relationships (Deregulation) Act [Dutch: Wet deregulering beoordeling arbeidsrelatie, “DBA Act”] was introduced. At the moment, an enforcement moratorium is still in place. However, from 1 January 2025 the Tax and Customs Administration will again enforce the act in respect of false self-employment. False self-employment exists if a self-employed worker is covertly employed by a client in practice. Enforcement is already possible in situations involving bad faith or an indication of bad faith.


    On 6 October 2023, the internet consultation began in respect of the Assessment of Employment Relationships and Legal Presumption (Clarification) Act [Dutch: Wet verduidelijking beoordeling arbeidsrelaties en rechtsvermoeden] (hereafter: “draft legislation”). The draft legislation is meant to replace the DBA Act and should provide all stakeholders with greater clarity and certainty about the employment relationship. The draft legislation consists of two elements:

    1. Clarification of ‘being employed by’ by means of a formula; and
    2. A legal presumption linked to an hourly rate.

    The Internet consultation was open until Nov. 10, 2023. It is still unclear in which form and whether the proposed draft legislation will enter into force. Your advisor will keep you informed of all developments in this area via a separate email.

    8. Employed person’s tax credit

    The employed person’s tax credit will go up by €115 for incomes around the statutory minimum wage. The maximum employed person’s tax credit will therefore be €5,553 instead of €5,052 (2023), on top of the inflation adjustment. The purpose of this measure is to make work more financially attractive. As a result, working people earning a gross salary up to nearly €40,000 will be better off.

    9. Other tax credits

    The proposed halving of the young disabled person’s tax credit is not going ahead. On the contrary, this tax credit will be increased from €820 to €902. This tax credit applies to recipients of Wajong benefits and persons who are entitled to in-work benefits under the Disablement Assistance Act for Handicapped Young Persons [Dutch: Wet arbeidsongeschiktheidsvoorziening jonggehandicapten].

    Changes to other tax credits are shown in the table below:

    Tax credits

    2023 (€)

    2024 (€)

    Maximum general tax credit (< state pension age)

    3,070

    3,374

    Employed person’s tax credit (maximum)

    5,052

    5,553

    Young disabled person’s tax credit

    820

    902

    Maximum income-related combination tax credit

    2,694

    2,961

    Elderly person’s tax credit

    1,835

    2,017

    Single elderly person’s tax credit

    478

    526

    Taper percentage of the employed person’s tax credit

    6.51%

    6.51%

    10. Change in Return to Work Fund contribution

    Apart from the basic contribution under the Work and Income (Capacity for Work) Act (WIA) and the Invalidity Insurance Act (WAO), employers also have to pay a differentiated contribution to the Return to Work Fund [Dutch: Werkhervattingskas, “Whk”]. For the purpose of determining the contribution amount, a distinction is made between small, medium-sized and large employers. In order to properly prepare your payroll administration for processing in 2024, we require the correct data concerning your Whk contributions.

    The changes for the calculation of the Whk contribution are shown in the table below:

    Differences

    2023

    2024

    Limit small/medium-sized

    €905,000

    €942,500

    Limit medium-sized/large

    €3,620,000

    €3,770,000

    Average WGA contribution percentage

    0.87%

    0.77%

    Average ZW contribution percentage

    0.66%

    0.45%

    Maximum contribution for large employers

    8.27%

    7.22%

    Adjustment factor

    1.17

    1.30

    We request you to send the decisions stating the contribution percentages for 2024 to your contact person in the payroll administration department in December 2023. Thank you in advance. Based on the decisions, we will of course prepare the payroll administration for 2024.

    11. Maximum income assessable for social insurance

    In 2023, the maximum income assessable for social insurance was €66,956. In 2024, the maximum income assessable for social insurance will be €71,624. This increase is related to the increase in the statutory minimum wage. The substantial increase also means an increase in the employer’s contributions as of 2024. The eventual increase will depend in part on the employer’s sector classification, the size of the workforce and the type of contracts concluded between the employer and the employees. If multiple reservations for employer’s contributions are made within the payroll administration, it may be important to take this into account so as to prevent future surprises.

    12. Registration of employees’ CO2 emissions

    As of 1 July 2024, employers employing more than 100 staff members will be required to record the CO2 emissions of their staff. They can also opt to report the registered CO2 emissions as of 1 January 2024. The purpose of this requirement is to achieve a reduction of 1.5 megaton CO2 by 2030. All staff business travel must be recorded, both commuting and other business trips. Based on the data submitted, the Netherlands Enterprise Agency will calculate the CO2 emissions. If you meet the criteria, you will have until 1 July 2024 to adjust your records accordingly.

    For now, only the reporting requirement will apply. Additional regulations may be introduced from 2026, if it appears that your employees together emit too much CO2. This reporting requirement is part of the ‘Reduction of CO2 Emissions from Work-Related Mobility of Persons Decree’ [Dutch: Besluit CO2-reductie werkgebonden personenmobiliteit], a measure under the Climate Agreement. We are happy to contribute ideas on making your organization more sustainable and the most efficient way in which your organization can report the mandatory data in the future.

    13. Wage expense allowance for elderly employees to be abolished

    The wage expense allowance (LKV) is an allowance paid to employers who hire one or more employees from target groups who tend to have difficulty finding work. The LKV for elderly employees is expected to be abolished as of 1 January 2026.

    14. Low-income allowance to be reduced

    The upper limit of the hourly wage criterion for the low-income allowance (LIV) will be reduced from 125% to 104% of the statutory minimum wage. The proposed effective date of the abolition of the LIV is 1 January 2025. The young person’s LIV will already be abolished as of 1 January 2024. However, the young person’s LIV will still apply in 2024 in respect of the paid hours of 2023.

    15. STAP budget to be abolished

    The STAP budget will be abolished as of 1 January 2024. The STAP budget is a subsidy of up to €1,000 for taking part in a training programme, course or study programme.

    16. Increase in Invalidity Insurance Fund contribution – high rate

    The contribution to the Invalidity Insurance Fund [Dutch: Arbeidsongeschiktheidsfonds, “Aof”] is a mandatory deduction at source which the employer pays towards the Invalidity Insurance Fund. A differentiated Aof contribution applies since 1 January 2022. There is a lower contribution for small employers and a higher contribution for medium-sized and large employers. The high Aof rate will go up from 7.11% to 7.49%. The low Aof rate will go up from 5.46% to 6.18%.

    17. Maximum amount of transition payment in 2024

    The maximum amount of the transition payment is determined annually by the Minister of Social Affairs and Employment. In 2023, the maximum amount was €89,000 gross, or one gross annual salary.

    An employee will be entitled to a transition payment if the initiative to terminate the employment was taken by the employer and the employee bears no (significant) blame for the situation. The employer will also owe the employee a transition payment if the employer does not wish to continue the fixed-term employment or termination during the probationary period.

    The maximum amount of the transition payment for the calendar year 2024 is not yet known. This will be announced by 1 January 2024 at the latest.

    18. Introduction of the statutory minimum hourly wage as of 1 January 2024

    As of 1 January 2024, the same minimum hourly wage will apply to everyone, irrespective of whether the employee works 36, 38 or 40 hours per week. The minimum wage based on a working week of 36, 38 or 40 hours will thereby disappear.

    The new legislation will ensure a fairer and more transparent minimum wage. At present, the minimum wage for persons working 38 or 40 hours a week is lower than that for persons working 36 hours a week. The new legislation will eliminate this difference.

    As of 1 January 2024, the minimum hourly wage for employees of 21 years or older will be €13.27 gross.

    The Ministry of Social Affairs and Employment has prepared a knowledge document containing frequently asked questions and example calculations regarding the minimum hourly wage: Kennisdocument wettelijk minimumuurloon 2024 | Publicatie | Rijksoverheid.nl.

    19. Draft legislation: Provision of Workers (Accreditation) Act

    The bill introducing the Provision of Workers (Accreditation) Act was submitted to the Lower House on 10 October 2023. The purpose of this draft legislation is to obtain a better grip of employment agencies, and in particular to tackle mala fide employment agencies. This draft legislation provides for an accreditation system and in fact introduces a disguised certification obligation for employment agencies.

    Among other things, the proposed accreditation system means that:

    • the supplier must be listed in the Trade Register;
    • the supplier must pay a deposit of €100,000 as financial security. Start-up suppliers pay a deposit of €50,000;
    • the supplier must hold a certificate of good conduct for legal entities;
    • the supplier must demonstrate periodically that, among other things, it complies with labour legislation and pays the mandatory social security contributions.

    Accreditation must be requested from the Ministry of Social Affairs and Employment.

    This mandatory accreditation also applies to non-resident suppliers if they provide workers to hirers based in the Netherlands. As non-resident suppliers will be unable, for example, to apply for a certificate of good conduct, this requirement does not apply to non-resident suppliers. Under the draft legislation, a hirer may only use suppliers who have been accredited. It is up to the hirer to ascertain whether the supplier has been accredited. The hirer can check this in the appropriate public register. The Dutch Labour Authority will monitor the ban on borrowing workers from non-accredited suppliers. In this context, the Labour Authority may impose a penalty on both the hirer and the supplier.

    The proposed effective date of the accreditation system is 1 January 2026. Please note that this is only draft legislation at the moment, which still needs to be passed by both Houses of Parliament.

    20. Compensatory transition payment for business cessation due to employer’s illness – cancelled

    In our payroll newsletter for the calendar year 2023, we discussed the compensatory transition payment for business cessation due to the employer’s illness. The intention at the time was to further define this scheme in 2023. The outcome of that process was that this scheme will not be introduced. It turned out to be impossible to give the scheme concrete shape.

    21. ‘Work Where You Want’ Bill – not to be enacted

    The ‘Work Where You Want’ Bill, providing a stronger statutory basis for working from home, has not been passed by the Upper House. This draft legislation provided that employers could only refuse a change of workplace, requested by the employee, on grounds of reasonableness and fairness.

    The Upper House did not pass the bill because the legislation had, in the meantime, been overtaken by reality. There was doubt about the usefulness of the new legislation. After all, many companies have already accepted that employees are (partially) working from home.

    The old legislation will now remain in force. If the employee submits a request for a change of workplace, the employer will only have a ‘duty to consider’. However, the employer will be obliged to discuss this with the employee and provide reasons if the request is refused.

    Lastly
    Please be assured that our organization, the payroll administration department, wage tax and legal teams are happy to help you comply with the changes mentioned above, assist you with the schemes and answer your questions.

    We wish you a happy holiday period and look forward to working with you in the new year!

    Disclaimer
    The information in this memorandum is intended to provide general information to interested parties. The information is not intended as advice. For advice, we recommend that you contact one of our qualified experts. Despite the fact that the greatest possible care has been taken in preparing this contribution, this document may unexpectedly contain incomplete and/or incorrect information. HLB Witlox Van den Boomen, Koenen & Co and PKF Wallast therefore do not accept any liability for this.

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