As 2023 draws to a close, HR professionals and payroll administrators face busy times, processing the year-end closing of 2023 and the start-up of 2024 payroll. Below, we discuss several important developments and points of attention regarding labour law, wage tax, HR and payrolling.
Labour Costs Arrangement (WKR)
In 2023, the first bracket discretionary margin (‘vrije ruimte’) of the Labour Costs Arrangement (‘werkkostenregeling’ or ‘WKR’) was temporarily increased to 3% of the wage sum. This temporary increase will cease at the end of this year. As of 2024, the discretionary margin in the WKR will be reduced from 3 to 1.92% of the wage sum up to EUR 400,000. The percentage for the wage sum above that amount will remain 1.18%. This effectively means that there is less discretionary margin, and less room for tax-free reimbursements by the employer. Also, the final levy of 80% may be reached sooner.
Would you like to make optimal use of the available discretionary margin? Our Employment Advisory experts would be happy to explain how.
The Dutch Supreme Court recently ruled that an employer may be obligated to inform an employee of relevant changes to international tax treaties. Discuss with your advisor whether this is a relevant point of attention in your case.
The 30%-ruling is set to be capped at the so-called ‘Balkenende norm’. In 2024, the maximum tax-free reimbursement an employer can offer under the 30%-ruling is EUR 69,900 (30% of EUR 233,000). If the actual extraterritorial expenses are higher than the lump-sum reimbursement (which currently has a maximum of 30%), it can be opted to reimburse the actual expenses (without a maximum).
Additionally, the Dutch House of Representatives approved further changes to the 30%-ruling. If the Dutch Senate also approves the changes, the 30%-ruling will be gradually scaled down from 1 January 2024 onwards. The first 20 months of the duration of the 30%-ruling will have a maximum exemption of 30%, the second 20 months will have a maximum exemption of 20%, and the last 20 months will have an exemption of no more than 10%. The possibility of opting for treatment as partially non-resident taxpayer will also be abolished, meaning that employees with a 30%-ruling will be subject to Dutch personal income tax on their worldwide income from 2025 onwards. Transitional law applies scaling down and the abolishment of the partially non-resident taxpayer status, for employees who made use of the 30%-scheme in the last wage period of 2023.
Read more about the proposed changes to the 30%-ruling here.
Would you like to know more about points of attention for international employers? Learn more about matters, such as labour law, social security and wage tax for personnel abroad, on our International Growth webpage.
In 2023, a number of new pieces of legislation were introduced. These cover matters such as pensions and equal opportunity hiring. Your advisor would be happy to explain any relevant new legislation and legislative proposals to you.
Furthermore, new rules for the remuneration of director-major shareholders (DMS) came into effect in 2023. The efficiency margin (‘doelmatigheidsmarge’) in the customary wage arrangement (‘gebruikelijkloonregeling’) has been abolished. This may lead to an increase in the required wages for director-major shareholders. Be sure to discuss the wages of a DMS with your advisor.
Another matter which may affect employers, is the entry into force of the Minimum Wage Implementation Act (‘Wet invoering minimumloon’) as of 1 January 2024.
Finally, we note that the 2024 Tax Plan included a number of proposals which are of relevance for employers. Read more about the 2024 Tax plan here.
External counsellor mandatory
It is expected that, as of 1 January 2024, employers with 10 or more employees will be obligated to appoint an external counsellor. An external counsellor can contribute to a safe working environment. Our advisors would be happy to discus show we can assist you in this matter.
Mobility reporting obligation
The reporting obligation and the accompanying administrative requirements for the ‘Normative Regulation Work-Related Personal-Mobility (‘Normerende Regeling Werkgebonden Personenmobiliteit’) will enter into force on 1 July 2024. Employers with over 100 employees will soon be required to report annually on their employees’ CO2-emissions from commuting and business travel.
Would you like to know more?
Would you like to learn more about topics that are relevant for employers with regard to the payrolling year-end 2023 and the start-up of 2024? In our Year-end pointers, we have listed a number of important points of attention. If you have any questions, please do not hesitate to contact our advisors!
The legislation and regulations in this area may be subject to change. We recommend that you discuss the potential impact of this with your Baker Tilly advisor.