10 important payroll changes for 2025

In the Netherlands, significant changes in labor laws and taxation are expected in 2025. These adjustments will directly impact employers. Home office allowances under the werkkostenregeling (WKR) are being revised, along with tax brackets. Additionally, the “customary salary” (gebruikelijk loon) for managing directors-major shareholders (DGA) will increase, and contributions and tax bases will be adjusted. These changes may affect your operations as well as your employees. Want detailed insights into the new amounts and percentages? Read on. Prefer direct advice on how these changes impact your business? Contact our payroll team at payroll.services@crowe-peak.nl. 

Legal updates effective January 2025 

1. Changes to the free allowance/free space in the WKR 

One of the updates for 2025 is the adjustment of the free allowance/free space under the werkkostenregeling (WKR). The WKR allows employers in the Netherlands to provide tax-free benefits to employees, such as gym memberships or holiday packages, even if these benefits offer private advantages. As of 2025, the free allowance increases from 1.92% to 2% of the taxable wage sum up to €400,000. For the portion above €400,000, the rate remains 1.18%. Monitoring this change closely is essential, as it may influence decisions regarding employee benefits. 

2. Commuting and home office allowances 

Commuting and home office allowances will remain largely unchanged in the Netherlands 2025. Employers may continue to reimburse €0.23 per kilometer tax-free for commuting, as in 2024. However, the home office allowance will increase slightly from €2.35 to €2.40 per day. While the adjustment is minimal, it is crucial to reflect this change in payroll systems. 

3. Income tax brackets 

In 2025, the first Dutch tax bracket for income tax will be divided into two. The new brackets and rates are: 

• Bracket 1: Up to €38,411 – 35.82% tax 

• Bracket 2: €38,411 to €76,816 – 37.48% tax 

• Bracket 3: Above €76,816 – 49.5% tax (unchanged) 

Employees earning a median to twice the median salary in the Netherlands may see a slight net increase in their monthly income. See the table below for illustrative calculations: 

Salary	2024	2025	% Change
44,000	35,116	35,788	+1.91%
88,000	56,328	57,005	+1.20%

Note: These calculations assume no salary adjustments between 2024 and 2025. 

4. Minimum wage 

The minimum wage in the Netherlands is set as an hourly amount, with the monthly wage determined by multiplying the hourly wage by the contractual or CAO work hours. For 2025, the minimum hourly wage will increase to €14.06 (excluding 8% holiday pay). For a 40-hour workweek, the minimum monthly wage will be €2,436.41. If fewer hours are worked per the employment contract or CAO, the minimum monthly wage will be proportionately lower. 

Workweek	Hourly wage 2024	Hourly wage 2025	Monthly wage 2024	Monthly wage 2025	% Increase
36 hours	€13.27	€14.06	€2,086.04	€2,192.77	+5.12%
38 hours	€13.27	€14.06	€2,201.94	€2,314.59	+5.12%
40 hours	€13.27	€14.06	€2,317.83	€2,436.41	+5.12%

5. State pension (AOW) age 

The Dutch state pension age (AOW-leeftijd) will remain unchanged at 67 years. Employees born after December 31, 1957, and before January 1, 1959, will qualify for AOW in 2025. 

6. Customary salary for DGAs 

In 2025, the “customary salary” (gebruikelijk loon) for managing directors-major shareholders (DGAs) will remain unchanged. The minimum salary a DGA must withdraw from a private company (BV) is €56,000 per year. This amount includes additions for a company car, holiday pay, a 13th-month bonus, and other payments. Adjustments may apply based on inflation. 

7. Changes to premiums and social security contributions 

The maximum salary for which premiums are payable will increase from €71,628 to €75,864 in 2025. This includes holiday allowances, bonuses, and pension contributions. Depending on company size, type of employment, and sector, costs are expected to rise by 9-10%, primarily due to this adjustment. For employees earning less than €75,864 annually, little will change. 

	2024	2025	Difference
Employer Zvw	6.57%	6.51%	-0,06%
Employee Zvw	5.32%	5.26%	-0,04%
Aof low	6.18%	6.28%	+0,10%
Aof high	7.49%	7.64%	+0,15%
WKO surcharge	0.50%	0.50%	–
AWf low	2.64%	2.74%	+0,37%
AWf high	7.64%	7.74%	+0,13%
Ufo	0.68%	0.68%	–
Max. premium/contribution wage	€71,628	€75,864	+4.24%

8. The 30% ruling in 2025 

The 30% ruling (30%-regeling) will remain unchanged for 2025 and 2026, with a flat 30% rate. However, changes are expected in 2027, with the rate dropping to 27% and stricter salary thresholds introduced. From 2027, the thresholds will be €50,436 (currently €46,107) for most employees and €38,338 (currently €35,048) for employees under 30 with a master’s degree. These thresholds will be indexed annually. Transitional arrangements will apply to employees using the 30%-ruling before January 1, 2024. They may continue to apply the full 30% rate under the old indexed salary criteria for up to five years. Employees starting the 30%-ruling in 2024 will transition to the 27% rate in 2027 but retain the current salary thresholds. Since 2024, the scheme has been capped at €233,000 (the “Balkenende norm”). In 2025, this cap will increase to €246,000. 

9. False self-employment 

As of January 1, 2025, the enforcement moratorium on false self-employment (schijnzelfstandigheid) will be lifted. The Dutch Tax Authorities (Belastingdienst) will actively enforce proper classification of employment relationships. Both contractors and clients face risks, including retroactive tax assessments and penalties, if misclassification occurs. 

It is crucial to assess whether your organization works with self-employed individuals (ZZP’ers) who could be deemed as misclassified. Early action can help mitigate risks and avoid penalties. Our team is available to ensure your employment arrangements comply with Dutch labor laws. Contact us for expert guidance. 

10. New salary thresholds for highly skilled migrants 

From January 1, 2025, new salary thresholds will apply to highly skilled migrants (kennismigranten), Intra Corporate Transfers (ICT), and Blue Card holders. 

The thresholds are: 

• Highly skilled migrants aged 30 or older: €5,688 gross/month 

• Highly skilled migrants under 30: €4,171 gross/month 

• Reduced salary threshold: €2,989 gross/month 

• EU Blue Card: €5,688 gross/month 

• EU Blue Card (reduced for graduates): €4,551 gross/month 

These amounts are gross, per month, excluding 8% holiday pay. They apply to all applications received by the Dutch immigration service after January 1, 2025. The reduced salary threshold applies in specific scenarios, such as during or after a high-skilled orientation year (oriëntatiejaar), or within three years of graduation or a completed PhD. 

Crowe Peak: Your global mobility and payroll partner in 2025 

The updates for 2025 present significant considerations for employers. Proactively integrating these changes into policies and payroll systems is crucial. Do you have questions about the impact on your organization? Contact our payroll team for tailored advice and support