Law Changes 2019: Work and Income

blue envelope, tax. (Picture: Twitter/@mjwagila)

The Dutch government is implementing a number of law changes on January 1st. Below find a summary of changes made in the category Work and Income.

Minimum wage is increasing. Next year the minimum amount an employee can be paid will range from 484.75 euros per month for 15 year olds to 1,615.80 euros per month for people over the age of 22 years. The amounts of the statutory minimum wage applies to a full work week, which can change depending on sector and collective bargaining agreements. See the full list of minimum wage amounts here. 

As of January 1st the amounts of a number of welfare benefits will change. These include IOAW and IOAZ, AOW and ANW. The amount of other benefits like unemployment depend on, among other things, the last earned wage and the maximum daily wage. Next year the gross maximum daily wage will increase from 211.42 euros to 215.28 euros.

New rules will be implemented for small pensions, less than 474.11 gross per month. Next year pension providers will no longer be able to buy out small pensions. This means that they will not be allowed to pay out small pensions to persons who have not yet retired. As of January 1st, pension providers will be able to pool small pensions and transfer small pensions to other providers, where the person is currently accruing a pension. More information can be found here.

The maximum transition allowance at dismissal is increasing from 79 thousand euros to 81 thousand euros next year, or one gross annual salary if that is higher than 81 thousand euros. 

A change in the income tax tariffs means that people with an income over 20 thousand euros will pay less tax next year. Changes in tax credit tariffs will also mean changes for some. The general tax credit is increasing next year, which will mean that people with an income up to 68,507 euros will pay less tax. An increase in the labor credit means that people with an income between 10 thousand and 41 thousand euros will pay less tax. And the income dependent combination tax credit will have a different structure. The basic amount of 1,052 euros is disappearing, but the accrual percentage increases from 6.16 percent to 11.45 percent. 

The term for the so-called 30% ruling for foreign employees is decreasing from a maximum of 8 to a maximum of 5 years. In this period foreign employees do not have to pay taxes on part of their salary.