Changes Payroll Administration 2024

Every year, payroll administration undergoes changes, including adjustments to laws and regulations, collective labor agreements (CLA), and tax regulations. It is essential for payroll administrators to stay informed about these developments and make timely adjustments to payroll administration.

Several changes will take effect from January 1, 2024:

‘Work Where You Want’ Law not implemented

The “Work Where You Want” law, an initiative by members of the Dutch political parties D66 and GroenLinks, will not be implemented in the government’s plans for the upcoming year. This law would have allowed employers to consider requests for changes to the workplace, similar to requests for changes in working hours or duration.

Introduction of Minimum Hourly Wage

The gross statutory minimum hourly wage is set at €13.27 per hour from January 1, 2024. Employers are required to pay employees at least the minimum hourly wage per hour from this date, with a fixed rate for all employees aged 21 and older.

Tax-Free Travel Allowance to €0.23

The government proposes to increase the maximum tax-free amount for business kilometers to €0.23 per kilometer from January 1, 2024, in line with the coalition agreement.

Expansion of Specific Exemption for Public Transport Pass

From January 1, 2024, providing and reimbursing a public transport pass (such as a public transport subscription or off-peak hours card) will be exempt from payroll tax, provided that the employee also uses the public transport pass for business purposes.

Reduction of Free Allowance to 1.92%

The free allowance under the working conditions scheme will be reduced from 3% to 1.92% starting January 1, 2024. Above €400,000, a percentage of 1.18% of free allowance will continue to apply. In 2024, the free allowance is €7,680 for a wage bill up to €400,000, resulting in a reduced budget of €4,320 in the free allowance compared to 2023 (when it was €12,000).

Changes to 30% Ruling

From January 1, 2024, there is a maximum amount of 30% of the Dutch standard for top incomes (WNT standard) of €233,000 for the application of the 30% ruling. The Omtzigt amendment simplifies the ruling (20 months at 30%, 20 months at 20%, 20 months at 10%), with transitional arrangements for existing cases.

CO2 Reporting for Large Employers

Organizations with 100 or more employees per Chamber of Commerce (KVK) registration are obligated to report on business and commuting travel of their employees from July 1, 2024. The implementation date may be delayed due to recent advice from the Council of State.

Increase in Volunteer Allowance

The maximum tax-free allowances for volunteers will increase in 2024 to €2,100 per year and €210 per month. The maximum amounts of the volunteer scheme are adjusted annually based on the table correction factor (TCF).

Employee and Social Insurance Premium Rates

The Regulation for determining employee and social insurance premium rates, maximum employee insurance premium income, and childcare allowance surcharge for 2024 was published in the State Gazette on November 20, 2023.

Premiums20232024
Old age pension (AOW)17,90%17,90%
Survivor’s pension (ANW)0,10%0,10%
Lower unemployment insurance fund (Awf-low)2,64%2,64%
Higher unemployment insurance fund (Awf-high)7,64%7,64%
Government employee insurance scheme (Ufo) 0,68% 0,68%
Small employers’ contribution for occupational disability (Aof-small)5,82%6,18%
Large employers’ contribution for occupational disability (Aof-large)7,11%7,54%
Uniform childcare surcharge (Aof)0,50%0,50%
Return-to-work fund (Whk)1,53%1,22%

Maximum Employee Insurance Premium Income 2024

The maximum employee insurance premium income for 2024 is €71,628, an increase from €66,956 in 2023. Employers do not have to pay premiums on the portion of the salary that exceeds this amount. This maximum amount also applies to the income-dependent contribution for the Health Insurance Act (ZVW).

Abolition of Youth-LIV

As of January 1, 2024, the Youth-LIV (youth labor market benefit) will be abolished.

Abolition of STAP Budget

The STAP budget (individual training budget) was abolished as of November 2023 as part of cost-cutting measures mentioned in the Spring Memorandum.

Lower Zvw Contribution and Higher Maximum Contribution Income

The contribution income and contribution income for the income-dependent contribution (IAB) for levies for the year 2024 are €71,628. The IAB rate decreases for both withholding agents and insured persons.

The IAB rate that withholding agents are obligated to pay on their employees’ wages, the so-called high rate, decreases from 6.68% in 2023 to 6.57% in 2024.

The IAB rate that insured persons are obligated to pay on their contribution income, the low rate, also decreases, namely from 5.43% in 2023 to 5.32% in 2024.

Model Agreements Based on Free Replacement Expire

Model agreements based on free replacement are no longer usable and will be revoked by the Tax Authority as of January 1, 2024.

Increased Employment Discount

The employment discount increases by €115 for incomes around the statutory minimum wage. The maximum amount of the employment discount in 2024 is €5,538. Workers with salaries from the minimum wage up to almost €40,000 will experience an improvement.

The maximum amount of the employment discount in 2024 is €5,538 (compared to €5,052 in 2023). This discount is reduced by 6.51% for an employment income of €39,939 (compared to €37,691 in 2023).

Employment Discount for WGA Benefits through Employer

Currently, there is a specific group of WIA benefit recipients (with a WGA benefit) who, based on a ruling by the Court of The Hague, are allowed to apply the employment discount to their benefit. This concerns individuals who, in addition to their benefit, are partly employed and choose to have their benefit paid through their employer. The State Secretary of Finance has appealed against this ruling and has gone to cassation.

Pension Accumulation from Age 18

From January 1, 2024, all pension schemes with an entry age higher than 18 must be adjusted so that all employees from the age of 18 can accumulate pension. Employers are obligated to offer a pension agreement to all employees from the age of 18 if they provide a pension agreement to their employees.

AOW Retirement Age Increases to 67

The AOW retirement age will increase to 67 years in 2024 and will remain at this level until 2027.

JaarAOW-leeftijdvoor personen geboren
202366 years and 10 monthsafter May 31, 1956, and before March 1, 1957
202467 yearsafter February 28, 1957, and before January 1, 1958
202567 yearsAfter December 31, 1957, and before January 1, 1959
202667 yearsAfter December 31, 1958, and before January 1, 1960
202767 yearsAfter December 31, 1959, and before January 1, 1961
202867 years and 3 monthsAfter December 31, 1960, and before October 1, 1961
202967 years and 3 monthsAfter September 30, 1961, and before October 1, 1962

Company Car Taxation Unchanged

The company car taxation percentages for 2024 remain unchanged, with a fiscal addition of 22% for fuel cars and (plug-in) hybrid cars, and 16% for electric cars. This applies up to a threshold of €30,000 (the purchase price of the car).

The year 2024 also marks the last year in which a reduced addition applies to electric cars. From 2025, the regular addition percentage of 22% applies to all cars with a first registration.

The addition percentage, as determined at the first registration, remains in effect for a maximum period of 60 months after 2024.

Maximum Severance Pay 2024

In case of termination of employment without own fault, the maximum severance pay in 2024 is €94,000 or one gross annual salary, capped at the so-called ‘Balkenendenorm’ based on the Dutch Standard for Top Incomes (WNT standard) up to €233,000.

Thuiswerkvergoeding 2024 nog niet bekend

Since January 1, 2022, employers have the option to compensate employees tax-free for the costs of working from home. A specific exemption has been included in the work-related costs scheme (WKR) for this purpose. In 2022, the maximum compensation was capped at €2 per day (or half a day). For the year 2023, this amount has been increased to €2.15. It is not yet known whether the home working allowance will further increase and with what amount.

Whistleblower Protection

The Whistleblower Protection Act requires adjustments in your organization if you have at least 50 employees. These adjustments must be implemented by December 17, 2023.

Changes in Social Affairs and Employment Collection Act 2024

The Social Affairs and Employment Collection Act 2024, with changes to, among other things, the Work and Care Act and the Minimum Hourly Wage Act, has been adopted by the House of Representatives and the Senate.

Deducting Amount on Minimum Wage for Payment to Health Insurer

The amount that the employer may deduct per payment term, taking into account the Minimum Wage and Minimum Holiday Allowance Decree, for payment to the health insurer is based on the amount of the estimated average nominal premium.

For the year 2024, the average nominal premium is estimated at €1,792 per year, corresponding to €149.33 per calendar month.

Further Reduction of Self-Employed Deduction

The self-employed deduction for entrepreneurs is further reduced to create a level playing field between employees and self-employed individuals. In 2024, the self-employed deduction will decrease to €3,750.

Workers from Ukraine

Displaced individuals from Ukraine are allowed to work in the Netherlands until March 4, 2024, with possible extension by the European Council until March 4, 2025.

Employer’s Statement 2024-1, valid from 01-11-2023

From 2024, the National Mortgage Guarantee Foundation takes into account part of the IKB budget when calculating the maximum mortgage. A new version of the employer’s statement will be used from 2024, also for mortgages without NHG. This means that people with an IKB budget can get a higher NHG mortgage from the new year onwards.

More information about the Payroll Administration Changes 2024?

Do you have questions or would you like more information about the changes in payroll administration for 2024? Please contact AAme Salarisadviseurs.

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