On 20 September 2022, the Dutch government presented its Budget Plan for 2023 which contains various measures relevant to Dutch employment and wage tax laws.

Minimum wage

The Budget Plan shows that the minimum wage will increase by 10.15% from 1 January 2023. Since 1 July 2022, employees aged 21 and above in full-time employment receive a minimum wage of EUR 1,756.20 gross per month. From 1 January 2023, this amount will go up by 10.15% and will be around EUR 1,932 gross per month. This increase in the minimum wage runs parallel to the implementation of the Adequate Minimum Wages Directive in the European Union, which the European Parliament recently agreed to.

Increase of tax-free travel allowance (wage tax)

The Dutch government proposes to increase the tax-free travel allowance (reiskostenvergoeding) for employees who drive to their jobs, from 19 eurocents per kilometer to 21 eurocents per kilometer as of 1 January 2023. This measure is imposed to keep traveling to work affordable for employees. As of 1 January 2024, the maximum is planned to increase to 22 eurocents per kilometer.

Limitation on the 30%-ruling (wage tax)

Employees that are recruited outside of the Netherlands and that have specific expertise can make use of the favorable “30%-ruling” which permits 30% of their wage to be enjoyed tax-free. The Dutch government proposes to impose a maximum wage limit on this ruling as of 2024 (the so-called Balkenende-norm or the Wet normering topinkomens (WNT)-norm, which is currently EUR 216.000, but is expected to increase in 2024). As of 2024, the 30%-ruling can only be applied to a wage up to the maximum of the WNT-norm. This change will come into effect on a gradual basis so that for employees to whom the 30%-ruling applies during the last tax period of 2022, the limitation on the 30%-ruling will not apply until 1 January 2026.

Higher tax exemption for home-working allowance

The tax exemption for the home-working allowance will go up in 2023. Currently, the allowance is 2 euros per day. The law stipulates that this amount is indexed annually using the table correction factor, what takes inflation into account. This will occur for the first time in the case of the untaxed home-working allowance on 1 January 2023. Without taking any rounding into account, the daily home-working allowance will be will be increased to EUR 2.13.