Crucial payroll modifications for 2024

As the formation of a new government approaches, the future of payroll taxes, pensions, and the minimum wage, among other things in the Netherlands, appears uncertain in the long term. However, in the short term, significant insights can be gleaned about these subjects. Numerous critical determinations have already been established concerning them during the previous cabinet period.

Looking ahead to 2024, there are several significant changes expected in the realm of working conditions and taxes, affecting both employers and employees. The Working Cost Ruling Scheme (werkkostenregeling or “WCRS”) will undergo adjustments, travel and home office allowances are slated to increase, and the tax brackets (belastingschijven) will see changes. Furthermore, the minimum wage is set for a crucial shift from a monthly to an hourly basis in 2024, carrying significant implications for various collective bargaining agreements. Notably, there will be an increase in the state retirement age and the DGA (directeur-grootaandeelhouder) customary wage, accompanied by alterations in premiums and contribution rates that will impact employers. Delve deeper into these changes, their associated amounts, and percentages in this article. Additionally, for comprehensive preparation for the upcoming year, explore the practical payroll tools highlighted in the final section. Need tailored guidance for your company or employees? Reach out directly to Crowe Peaks’ payroll team via email.

Statutory payroll changes effective 2024 

WCRS’s free space 

The free space (vrije ruimte) allocated within the WCRS (Work Cost Ruling Scheme or WKR/WerkKostenRegeling) will amount to 1.92% of the fiscal wage bill up to €400,000. For any amount exceeding the wage bill of €400,000, the percentage will remain fixed at 1.18%. 

Travel and home office allowance

From 2024, employers can provide a tax-free reimbursement of €0.23 per kilometer for travel expenses, compared to €0.21 per kilometer in 2023. Regarding the home office allowance, the revised net amount per day worked from home will shift from €2.15 to an as-yet undisclosed sum. Although the exact figure has not been officially disclosed, it is anticipated to be €2.35, a value expected to be confirmed by December 2023.  

Payroll taxes

The first tax bracket (belastingschijf) will be extended from €73,032 to €75,624, with the tax rate for this bracket rising from 36.93% to 36.97%. The tax rate for the second bracket will remain unchanged at 49.5%. 

As a result of these adjustments, employees earning a moderate to double moderate income may experience a slight increase in their net monthly earnings, as indicated below: 

Salary	2023	2024	% Change
40,000	32,164	33,067	+2.81%
80,000	51,894	52,753	+1.66%

Note: The above calculation assumes the same salary in 2023 and 2024.   

Minimum wage 

The current Dutch minimum wage is a fixed monthly amount based on the contracted hours specified in Collective Labor Agreements (CAO). Presently, this wage stands at €1,995 per month for full-time employment as of the 1st of July 2023. It is important to note that whether an employee’s “full-time employment” under their specific CAO constitutes 36, 38, or 40 hours per week does not affect this predetermined minimum wage. The minimum wage consistently remains at €1.995 per month and may only be lower if the work entails less than full-time hours. 

Starting in 2024, a new system will be implemented, shifting away from displaying the legal minimum wage on a monthly basis to an hourly rate. This change will introduce a minimum hourly wage of €13.27 (excluding an 8% vacation allowance). Consequently, the minimum monthly wage will vary depending on the number of hours stipulated for full-time work. This shift from a monthly to an hourly calculation means that CLA’s with longer working hours will experience a comparatively higher increase in the minimum wage. To provide clarity, the upcoming changes based on working hours are outlined below for your reference.

Number of hours work per week	2023 Hourly rate	Monthly salary 2023	2024 Hourly rate	Monthly salary 2024	% Increase
36 hours	€ 12.79	€ 1,995.00	€ 13.27	€ 2,086.04	+4.56%
38 hours	€ 12.12	€ 1,995.00	€ 13.27	€ 2,201.94	+10.37%
40 hours	€ 11.51	€ 1,995.00	€ 13.27	€ 2,317.83	+16.18%

AOW age increase by two months

The retirement age for the Dutch state pension, AOW, will be raised by 2 months to 67 years in 2024, currently being at 66 years and 10 months. Consequently, individuals born after February 28, 1957, and before January 1, 1958, will qualify for AOW benefits in 2024. 

DGA/sole entrepreneur customary wage 

The “customary wage” for a DGA (being a “director major shareholder” or a sole entrepreneur), which signifies the minimum salary a Director of a B.V. (private limited company) should receive for tax purposes, will rise to €56,000 annually in 2024. This figure stood at €51,000 in 2023. 

Change in premiums and contributory wages

The maximum wage threshold subject to premiums will rise in 2024, increasing from €66.956 to €71,628. This threshold encompasses wages inclusive of vacation allowances, “13th-month payments” (dertiende maand), bonuses, and pension deductions. For employees earning above €71.628, employer premiums will see an increase from 16.51% to 16.66% for small employer classifications, and from 17.80% to 17.97% for large employers. This adjustment primarily stems from the augmented maximum premium amount. Consequently, individuals with an annual salary below €71,628 will experience minimal changes. 

Below you will find an overview of the premiums and the revised maximum premium and contribution amounts.

Change in premiums and contributory wages

	2023	2024	Difference
Zorgverzekeringswet Employer	6.68%	6.57%	-0.11%
Zorgverzekeringswet Employee	5.43%	5.32%	-0.11%
Werkhervattingskas	0.87%	0.77%	-0.10%
Arbeidsongeschiktheidsfonds (Aof) laag	5.82%	6.18%	0.36%
Arbeidsongeschiktheidsfonds (Aof) hoog	7.11%	7.49%	0.38%
Opslag Wet kinderopvang (Wko)	0.50%	0.50%	0.00%
Algemeen Werkloosheidsfonds (AWf) laag	2.64%	2.64%	0.00%
Algemeen Werkloosheidsfonds (AWf) hoog	7.64%	7.64%	0.00%
Uitvoeringsfonds voor de overheid (Ufo)	0.68%	0.68%	0.00%
Maximum premium/contributory wages	€66,956.-	€71,628.-	€4,672.-

Beneficial changes for your payroll starting 2024 

Independent employee onboarding in Loket 
Did you know that your employees have the option to independently set up their profiles in Loket? This streamlines the process significantly by eliminating the need to gather employee data during the hiring process. Through this self-onboarding feature, employees receive a link granting them access to a page where they can fill out essential information like their bank account details, name, and address. Subsequently, you can supplement this by adding wage information, enabling direct integration of the employee’s data into Loket. Our team is eager to assist you and your employees in utilizing this new Loket feature. Please do not hesitate to reach out via email for guidance or additional information. 

Data import file 
Another feature available within our payroll services that you, as an employer in 2024, might find beneficial is the “data import file.” This file enables the direct importation of all monthly variables (such as hours worked, overtime hours, bonuses, etc.) via an Excel file. This method significantly reduces workload and minimizes the likelihood of errors. Your designated payroll contact at Crowe Peak will gladly provide you with additional information regarding the potential implementation of the data import file for your company. 

Journal transition 
Throughout 2024, all journal modules except for the “journal runs” module will be phased out. Consequently, if you are not already utilizing this module, you will need to transition to the new one. If this pertains to your situation, we will notify you accordingly in due course. For further details, please reach out to our payroll specialists.