Changes in the Labor Market and Labor Law:
• Workers with low or middle incomes will pay less tax. The labor tax credit increases from €3,070 to €3,374.
• The Ministry of Social Affairs and Employment (SZW) is working on a legislative proposal regarding flexible work. o Zero-hour contracts will be abolished and replaced with a basic contract providing more schedule and income security. o The interruption period for temporary work is extended from the current six months to a gap of five years.
Legal Minimum Wage per Hour as of 2024:
• Starting January 1, 2024, it is mandatory to pay employees at least the legal minimum hourly wage. Previously, employees with a 40-hour contract effectively had a lower hourly wage than those with fewer than 40 hours.
• The introduction of the legal minimum hourly wage results in a salary increase for employees working more than 36 hours per week.
Reduced Employee Benefit Scheme (Werkkostenregeling) as of January 1, 2024:
The standard rate returns to 1.92%. Above the first €400,000 of the fiscal wage sum, the tax-free space remains at 1.18%.
Increase in Tax-Free Commuting Allowance:
The tax-free commuting allowance increases from €0.21 to €0.23 per business kilometer, allowing employers to reimburse a higher amount for employees' travel expenses tax-free.
Simplified Issuance of Public Transportation Cards:
• Starting January 1, 2024, the form in which the public transportation card is provided no longer matters. Employers are not taxed as long as the employee uses the public transportation card (partially) for business trips, such as commuting.
• Until 2024, employers had to maintain extensive records to prove that the employee used the card for a sufficient number of business kilometers. Employers also had to withhold and remit payroll tax if the employee did not use the public transportation card sufficiently for business purposes.
Home Office Allowance in 2024 (likely) increased to €2.35 per day:
• Employers can provide a tax-free home office allowance. This was €2.15 per day, but in 2024 (very likely) it will increase to €2.35 per day.
• The correction factor table for 2024 will be published in the State Gazette at the end of December. It is expected to be 9.9%.
Abolition of Income Benefits, Improvement for Disabled Workers:
Youth Employment Incentive Scheme (jeugd-LIV) is abolished from January 1, 2024, and the Low-Income Benefit (LIV) will be completely abolished by 2025. The wage cost advantage for older workers ends by 2026. However, there will be an improvement in the wage cost advantage for the reintegration of disabled workers.
Reporting on CO2 Emissions from 100 Employees Onwards:
From 2024, organizations with 100 employees or more must report on pollution from their business and commuting traffic. This is the work-related personal mobility (WPM).
Extended Working Rights for Asylum Seekers:
If their asylum application has been under consideration for at least six months, asylum seekers are now allowed to work throughout the year. The Council of State ruled on this in November 2023. The Minister of Social Affairs and Employment adjusts the rules accordingly, and the Employee Insurance Agency (UWV) immediately issues work permits for more than 24 weeks.
Criticism on Cabinet Plans for Self-Employed Individuals:
•A new law is expected to take effect only in 2025. There is much debate about enforcing the DBA law and understanding the rules. For the most accurate information, please check (link).
Expansion of the Training and Development Budget (SLIM) instead of the Individual Learning Budget (STAP):
The STAP budget was a successful and straightforward scheme. Unfortunately, its successor is less straightforward. Applying for the SLIM subsidy is done through the subsidy portal of SZW (link).
Workers from Ukraine:
Displaced persons from Ukraine are allowed to work in the Netherlands. They are protected until March 4, 2024. It is expected that this temporary protection will be extended by the European Council until March 4, 2025.
Pension Accumulation from the Age of 18:
As of 2024, employees aged 18 and above can join the pension scheme. This requires adjustments to insurance and (sectoral) pension funds. Payroll administration must also be adapted. This has implications for net wages. Ensure that you inform your employees about this.
Source: Personeelsnet, XpertHR, Ondernemen met Personeel, Rijksoverheid
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