Amendments as of 1 January 2025

End of enforcement moratorium on false self-employment

On 1 January 2025 the enforcement moratorium on false self-employment will end. The main consequences are:

• From 1 January 2025, the Tax Authorities will apply the normal rules for imposing correction obligations, additional tax assessments, and fines when enforcing the classification of the employment relationship for payroll taxes. The enforcement will primarily focus on payroll taxes at the companies.
• The Tax Authorities will consider the previous enforcement moratorium and will only retroactively correct up to the date of its lifting, i.e., 1 January 2025.
• For the period before 1 January 2025, the Tax Authorities can only impose corrections, taking into account the five-year statute of limitations, if there is malicious intent or if a previously given instruction was not followed adequately. In such cases, corrections and additional tax assessments can be imposed up to the moment of malicious intent or when the instruction was given.
• The government wants to prevent well-intentioned companies from being immediately confronted with fines after the moratorium ends. Therefore, it has been promised to ensure a 'soft landing.' In 2025, the Tax Authorities will not impose fines for the qualification of employment relationships. From 2026 onwards, the normal rules for imposing fines will apply.
• The assessment of model agreements by the Tax Authorities will be discontinued. All existing approved model agreements will be honored until the end of 2029. Parties can continue to use them until the end date. However, they only provide certainty if the company and the self-employed person actually work as agreed in the model agreements. If it turns out that a model agreement does not comply with laws and regulations, or due to new court rulings or new legislation no longer complies, the Tax Authorities will withdraw the approval. Furthermore, the Tax Authorities can withdraw an approved model agreement if it appears that the conditions in the agreement are not being followed.

The government aims to create more clarity regarding the distinction between working as an employee and as a self-employed person, in addition to resuming enforcement. This is addressed in the Bill for Clarification of the Assessment of Employment Relationships and Presumption of Employment (WVBAR). This proposal codifies relevant case law on the qualification of employment relationships into a more comprehensible assessment framework. On 11 November 2024, the Council of State (Raad van State) published a critical advisory opinion on this draft proposal. The Minister of Social Affairs and Employment intends to submit the (amended) proposal to the House of Representatives in Q1 2025. However, the (draft) annual planning of the Ministry of Social Affairs and Employment indicates that this timeline is subject to change.

30%-Ruling becomes ‘expat scheme’

The Dutch Tax Authority will refer to what is currently known as the 30% ruling as the ‘expat scheme’.

As of 1 January 2024, the 30% ruling has been amended. The maximum amount of the tax-free allowance is no longer 30% over the entire duration but will decrease over time: a maximum of 30% for the first 20 months, a maximum of 20% for the next 20 months, and 10% for the last 20 months of the term. This amendment will be reversed in 2025. However, in the 2025 Tax Plan, the government proposes another modification. Starting in 2027, the maximum percentage of the tax-free allowance will be reduced from 30% to 27%. This percentage will then apply for the entire (remaining) period of 60 months. For 2025 and 2026, the maximum percentage remains 30%. Additionally, the government intends to increase the salary threshold for incoming employees from EUR 46,107 to EUR 50,436 as of 1 January 2027. The salary threshold for incoming employees under 30 years old with a master's degree in academic education or an equivalent foreign degree will be increased from EUR 35,048 to EUR 38,338.

The transitional arrangements are as follows:

CO2 Reporting for work-related mobility of persons

Employers with 100 or more employees are required to report on the CO2 emissions from work-related mobility of persons. This includes both commuting and business travel. Employers must submit the report for 2024 to the Netherlands Enterprise Agency (RVO) by 30 June 2025, at the latest. Employers can choose to report for the entire year of 2024 or only for the second half of 2024. More information can be found on the RVO website.

Unemployment benefit contributions and overtime

Employers pay lower unemployment benefit contributions for permanent employment contracts and higher contributions for flexible contracts. Employees with a permanent employment contract are allowed to work overtime for up to 30% beside their regular hours. As long as employees do not exceed that percentage of overtime, employers do not have to pay a higher rate of WW-premiums. As soon as an employee works more overtime than 30% during a whole year, the higher rate applies retrospectively.

This maximum percentage for overtime does not apply for employment contracts of 35 hours per week or more: these contracts will be exempt from this rule. On 1 January 2025 this threshold will be reduced to 30 hour per week or more. As a result employers will not have to pay the higher unemployment contribution rate if the amount of overtime worked is more than 30%. This provides more flexibility.

Abolition of the low-income benefit and changes to wage cost benefits (LKV's)

• LIV:  As of 1 January 2025, the low-income benefit (LIV) will be abolished. Employees will still receive the LIV for 2024 in 2025.
• LKV for re-employing disabled workers:  As of 1 January 2025, the criteria for the LKV for re-employing disabled workers will be expanded. As a result, employers will qualify for this LKV in more cases.

• LKV for older workers: The LKV for older workers will be gradually phased out for employment contracts that have begun on or after 1 January 2024. As part of this, the amount of the LKV for older employees will be reduced starting in 2025. This LKV will be completely abolished by 2026. For employment contracts that began 1 before January 2024, nothing will change.

State pension age unchanged in 2030

The state pension (AOW) age for 2025 – 2027 is 67 years, and for 2028 and 2029, it is 67 years and 3 months. Minister Van Hijum (Social Affairs and Employment) has announced that the AOW age in 2030 will remain unchanged at 67 years and 3 months. For more information, see the website of the Dutch government.

Indexations

• Increase in maximum transition fee: The maximum transition fee in 2025 is EUR 98,000 gross (2024: EUR 94,000 gross) or a maximum of one annual salary if the salary exceeds this amount.
• Increase in maximum payment under the Executives' Pay (Standards) Act (WNT): For 2025, the general maximum remuneration under the WNT is set at EUR 246,000 gross (2024: EUR 233,000 gross). The WNT limits the compensation of top officials in the (semi-)public sector. Different maximums apply to sectors such as education, culture, media, housing associations, healthcare, and development cooperation. A higher maximum is applicable to health insurers. An overview of the WNT remuneration maximums for 2025 is available at the website www.topinkomens.nl. The new Implementing Regulations WNT 2025 (Uitvoeringsregeling WNT 2025) and Policy Rules WNT 2025 (Beleidsregels WNT 2025) have now been published. These regulations have been adjusted on several points. For instance, the premium for directors' liability insurance is excluded from the remuneration, and there is an explanation of the consequences of the WNT for either an agreed-upon or court-awarded (fixed) compensation for wrongful termination (e.g., when not taking into account the applicable notice period).
• Tax-free home working allowance: The tax-free allowance for home working will be increased to a maximum of EUR 2.40 per day in 2025 (2024: EUR 2.35).
• Work-related expense scheme: the free space for the wage bill up to and including EUR 400,000 will be 2% (2023: 1.92%). The free space for the wage bill exceeding EUR 400,000 remains unchanged at 1.18%.
• RVU exemption threshold: The RVU exemption threshold amounts to EUR 2,273 gross per month in 2025 (2024: EUR 2,182 gross per month).
• Maximum pensionable salary: The maximum pensionable wage as of 1January 2025, has been provisionally set at EUR 137,800 gross (2024: EUR 137,800 gross). 

For a comprehensive overview of the (other) tax changes related to labour and wages as of 1 January 2025, see the Dutch Tax Authorities' Newsletter on Payroll Taxes 2025.