On September 17, 2024, the traditional Prinsjesdag took place, during which the Dutch government presented the 2025 Budget Memorandum (Miljoenennota) and the 2025 Tax Plan. Below is an overview of the most significant (proposed) changes from an employment law perspective:
Adjustments to the 30% Ruling
The previously announced restriction of the 30% ruling, proposed as the “30-20-10 scheme,” has largely been reversed. The government now proposes to introduce a maximum tax-free allowance of 27% effective January 1, 2027. Until then, the current 30% allowance will remain in effect for all incoming employees in 2025 and 2026.
Additionally, salary thresholds will be raised. As of 2024, the following new thresholds will apply:
- The general salary threshold will be increased from €46,107 to €50,436.
- For employees under the age of 30 with a master’s degree, the threshold will rise from €35,048 to €38,338.
Employees who were already benefiting from the 30% ruling before 2024 will be subject to transitional rules: the previous 30% rate and indexed salary thresholds will continue to apply for them until the end of their applicable term.
Provisional Social Security Contributions for 2025
The budget statement from the Ministry of Social Affairs and Employment contains the provisional social security contributions for 2025. This information is available at: XV Social Affairs and Employment, 2025 National Budget | Budget | Rijksoverheid.nl.
Income Tax Rates for 2025 The government, in the 2025 Tax Plan Bill, proposes the introduction of an additional income tax bracket and a reduction in the rate of the first tax bracket. The rate for the first bracket, which applies to incomes up to €38,441 per year, will be reduced to 35.82%. Additionally, a second bracket with a rate of 37.48% will be introduced for incomes between €38,441 and €76,817 per year. As a result, both employees and pensioners (AOW recipients) will retain more net income in 2025.
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