The turn of the year is always a busy time for HR and payroll administration. Every year, something changes in the payroll rules, and this year the uncertainty will even longer because of the delayed decision-making in the Dutch House of Representatives.
With the 2025 year-end and the start of 2026 approaching, our Employment Advisory experts discuss several important developments and points of attention for 2025 and 2026.
Stay sharp on the work-related expenses scheme
The first bracket of the discretionary margin of the Work-related Expenses Scheme (WRCS) in 2025 is 2% on the first € 400,000 of the wage amount. Above € 400,000, it is 1.18%. These percentages are expected to remain the same in 2026.
Despite the percentages remaining the same, it is important to stay on top of the WRCS WKR around the turn of the year. Read more about this in our Year-End Pointers for Employers!
Do you want to make the best use of the available discretionary margin? Our experts would be happy to explain how. Read more about the WRCS here.
Keep an eye on new rules for leased cars
On Budget Day, it was proposed to introduce a final levy tax for fossil fuel-powered passenger cars as of 2027. The final levy tax is 12% of the list price (or the fair market value in the case of cars older than 25 years) and is borne by the employer. There will probably be a transitional regulation until 17 September 2030 for passenger cars first made available to one or more employees before 1 January 2027.
If you offer lease options with contracts of more than 4 years, discuss with your Baker Tilly advisor whether it is necessary to take the new final tax into account now, for example by no longer allowing contracts for non-electric vehicles to run beyond 17 September 2030.
Fiscal addition for electric vehicles to change in 2026
Electric vehicles are subject to a reduced fiscal addition rate for list prices up to € 30,000. This rate is 17% in 2025. For the part of the list price in excess of €30,000, a 22% fiscal addition applies.
But take note: the reduced taxable benefit rate expires in 2026. The regular 22% taxable benefit rate will then also apply to (new) electric vehicles. There is a transitional regulation for existing contracts.
Read more about the fiscal addition and the tax treatment of company cars in 2025 in our Company Car brochure.
Adjustments to the extraterritorial expenses and expat schemes
The 30%-ruling for incoming and outgoing employees has been cut back. As of 1 January 2027, it will actually be a ‘27%-ruling’: the maximum tax-free allowance will be 27% of the salary. The salary criteria will also be raised. There is transitional law for employees who applied the 30%-ruling prior to 2024.
Further, expats may face a number of changes and expiring transitional arrangements:
The possibility to opt for partially non-resident taxpayer status was abolished as of 1 January 2025, meaning that (new) employees under the 30%-facility will in principle pay taxes on their worldwide Box 2 and Box 3 income, unless double taxation relief is offered. As of 31 December 2026, it will no longer be possible to opt for treatment as a partially non-resident taxpayer for the last cases covered by the transitional regulation either.
The transitional arrangement for the capping of the 30%-facility to the so-called WNT-norm will end on 1 January 2026. This may mean that employees under the 30%-ruling who earn more than the WNT-norm will effectively no longer make maximum use of the 30%-scheme.
If the 30%-facility is not applied, an employer may currently reimburse certain actual extraterritorial expenses tax-free. On Budget Day, it was proposed that certain extraterritorial expenses may no longer be reimbursed tax-free. This concerns the (additional) cost of living allowance (so-called ‘COLA costs’) and certain additional telephone costs. These restrictions are yet to be approved.
Stricter checks for false self-employment
An enforcement moratorium on false self-employment was in place in recent years. But since 1 January 2025, the Dutch Tax Authorities are once again actively checking whether a self-employed person without staff (‘ZZP’er’) should actually be regarded as an employee.
At the same time, new legislation around hiring ZZP’ers is still pending. The so-called Wet verduidelijking beoordeling arbeidsrelaties en rechtsvermoeden or ‘VBAR’ is expected to provide the long-awaited clarity. But the VBAR Act (and its corresponding Decree) have not yet been finalised.
For now, parties involved will have to (continue to) make do with the current legal standards, with all the uncertainty this situation involves.
Tax and labour law risks among ZZP’ers
False self-employment involves a high level of risk. If the Dutch Tax Authorities conclude that there is an employment contract instead of a contract for services, there is a tax risk that additional wage taxes and contributions are levied on the amounts paid to the ZZP’er, plus statutory interest and penalties. This creates a significant financial risk for the client/employer.
Additionally, at some point (often in cases of long-term illness or termination of the assignment by the client), a falsely self-employed person may claim an employment contract, including sick pay, job protection, pension accrual, and so on.
Keep an eye on the position of ZZP’ers. Our experts can help you with this.
Want to know more?
If you want to read more about what to look out for as an employer at the 2025 year-end and the start of 2026, we list some important topics for you in our Year-End Pointers If you have any questions, our advisors would be happy to help!
Legislation and regulations in this area may change. At the time of publication, the 2026 Tax Plan had not yet been debated by the House of Representatives or the Senate. Legislative or other changes may have taken place after the publication of the articles mentioned above. Talk to your Baker Tilly advisor about the potential impact for your organisation.
