In our article AB rate reduced and increased; higher salary for directors and major shareholders we outline the Government’s plans for entrepreneurs. The Spring Memorandum 2022 also includes measures affecting employees, which naturally have implications for employers’ wage costs.
Minimum wage
The coalition agreement already sets out the plan to increase the minimum wage. This was due to take place in 2024 (by 3.75%) and in 2025 (by 3.615%). This is now being brought forward by one year and will take place in three stages. In 2023 and 2024, the minimum wage will be increased by 2.5% and in 2025 by 2.32%.
Mileage allowance
The coalition agreement provided for an increase in the tax-free mileage allowance. This, too, will be brought forward by one year. As early as 2023, the tax-free mileage allowance will be increased from €0.19 to €0.21 (although this amount is yet to be finalised by the Government). In 2024, this €0.21 is likely to be increased to €0.23.
The fact that the tax-free mileage allowance is increasing does not mean that employers are obliged to pay this higher amount. They are only obliged to do so if this has been agreed in the collective labour agreement or other terms and conditions of employment.
30% control
The 30% scheme is relevant to employees from abroad (expatriates). Subject to certain conditions, they may receive 30% as a tax-free allowance from their remuneration to cover their extraterritorial expenses (the additional costs incurred as a result of working in another country). From 2023, this will be capped at a salary equivalent to the WNT standard (also known as the Balkenende standard), which amounts to €216,000 in 2022.