Law changes that will hit your wallet in 2024

Every year, the Netherlands implements several new and modified laws and regulations on January 1. Many of these have a serious impact on people’s wallets and on household purchasing power as a whole.

While some of these rules have been finalized, there is still some time for politicians to finish work on regulations and laws this year. The Tweede Kamer starts the winter recess on December 22, while the senators in the Eerste Kamer walk out the door two days earlier.

With less than two weeks to go, these are the list of laws and changes that are expected to make the biggest impact on bank accounts next year.

Minimum wages

From next year, the minimum wage will be calculated on an hourly basis, not a monthly one, so that people who work more hours also get more pay. The minimum wage is also rising compared to 2023.

The minimum wage in 2024 will be 13.27 euros per hour. So a full-time worker working 36 hours per week will get 2,070 euros per month. Minimum wage earners working 40 hours per week will get 2,300 euros. This year, when minimum wage was set on a monthly basis, minimum wage earners working 36 hours and those working 40 hours per week both got 1,995 euros per month.

Income tax

The lower income tax rate will rise from 36.93 percent to 36.97 percent. (An earlier version of this article incorrectly stated that the lower rate would be 39.97 percent.)

The top income tax rate will remain at 49.50 percent.

Single people who receive income in box 2, which includes dividend payments for business ownership, will pay 24.5 percent in tax on the first 67,000 euros, or 134,000 euros if in a partnership. Amounts over that will be taxed at 33 percent. Previously, the rate was 26.9 percent.

Businesses will pay a 19 percent corporate income tax on their first 200,000 euros. They will pay 25.8 percent for amounts over that, leaving the rates virtually unchanged.

Health insurance

Health insurance premiums will increase next year, but by less than the 12 euros per month the Cabinet predicted on Budget Day. Most of the insurers kept their increases below 10 euros per month. A few came close to the Cabinet’s expectation, and one or two exceeded it.

However, many health insurers added restrictions to their policies, such as which healthcare providers they’ll fully reimburse. Many also cut on their supplementary cover. So insured are advised to check the conditions of their policies, whether they change insurers or not.

The minimum deductible will remain 385 euros in 2024 and is not likely to change for the next few years.

Healthcare benefits for single households will be capped at 1,523 euros and at 2,913 euros for households with multiple residents.

Families with a new child can receive maternity care, known as kraamzorg, for up to six weeks after welcoming the child. This is an increase from 10 days after delivery.

Reimbursement for recovery care for Long Covid sufferers has been extended and will continue for all of 2024. This includes coverage for physiotherapy, occupational therapy, speech therapy, therapeutic exercise, and work with a dietician.

Childcare subsidy

The childcare subsidy will cover a maximum hourly rate of 10.25 euros for daycare and 9.12 for after-school care. For less formal childcare, the subsidy will rise to 7.53 euros per hour. These rates are roughly 9 percent higher than in 2023.

The budget for child-related matters will also increase by a maximum of 750 euros per year for the first child under 12 years of age and 883 euros for a second child. This subsidy will grow by up to 400 euros for children between 12 and 17 years of age.

The rental housing benefit will increase by up to 416 euros to a maximum of 5,779 euros per year.

Energy allowance

Minister Carola Schouten for Poverty Policy announced some changes to the energy allowance for low-income households. Households with a gross income up to 130 percent of the social minimum can apply for an allowance from the Temporary Energy Fund if at least 8 percent of their income went to their energy bill, compared to 10 percent this year. For families whose income is up to twice the social minimum, the limit is lowered from 13 to 10 percent.

Small business profit tax exemption cut

Small and medium-sized enterprises (SMEs) can expect to pay more tax on their profits next year. The SME profit exemption rate drops from 14 to 12.7 percent in 2024. The SME profit tax exemption reduces small businesses’ taxable profit after the entrepreneur allowance. SMEs making high profits will lose the most.

Private business ownership allowance cut

Entrepreneurs who work at least 1,225 hours in their business will get less private business ownership allowance next year. The allowance will be 3,750 euros in 2024, 1,280 euros lower than this year. The government will continue to cut this allowance in steps every year to 900 euros in 2027.

Changes to Box 3 taxes on income from savings and investments

The tax on Box 3 income from returns on savings, stocks, bonds, and other assets, including second homes, will be taxed at 36 percent. That is an increase from 32 percent. The tax-free allowance in Box 3 income is not expected to grow with inflation and will likely remain at 57,000 euros.

There are also some unconfirmed changes to the Box 3 tax expected to take effect next year. If these take effect, people with more than the tax-free 57,000 euros in assets will pay a 34 percent tax on the return they made on their savings or investments. The fixed return percentage for investments is set at 6.04% for 2024. The return on savings has not yet been set.

With retroactive effect to 1 January 2023, money in third-party accounts with a civil law notary or bailiff and homeowners’ shares in the assets of a homeowners’ association will also count as savings.

Debts also fall under Box 3. The cost of your debts is deducted from the process of your assets.

Pension

The state pension age will remain at 67 years in 2024. It will increase by 3 months in 2028, and the retirement age will remain the same at least until the end of 2029.

The four major pension funds will all increase payouts next year. ABP will increase by 3 percent, PME by 3.26 percent, and PFZW will grow by 4.8 percent. PGB pension holders will see a 5.2 percent increase.

Student loans

Students paying off their student loans, including those who were unable to get study grants in recent years, will likely see a sharp jump in the interest rate they pay. It will rise from 0.46 percent to 2.56 percent from January 1.

Flight tax

Airline passengers will pay a flight tax of 28.58 euros next year, up from 26.43 euros. That is four times the amount in 2022.

Alcohol excise duty increase

Excise duties on beer, wine, spirits, and other alcoholic beverages are expected to increase by 16.2 percent on 1 January 2024. If implemented, a crate of beer will be 0.50 euros more expensive on average, while the price for a bottle of wine will increase by around 0.13 euros.

The consumption tax on non-alcoholic drinks like soft drinks and fruit juices will rise to 26.13 euros per 100 liters. This consumption tax is not expected to apply to milk or mineral water.

Travel allowance increasing

New rules will apply to reimbursing travel expenses for staff next year. The untaxed travel allowance will increase by 2 cents to 0.23 euros per kilometer. Employers can also pay a higher amount per kilometer, but anything above 0.23 euros will be taxed as wages.

Businesses can no longer deduct gifts to public benefit organizations

From 2024, businesses will no longer be allowed to deduct donations to a “public benefit organization” from their profits. But non-business gifts to such an organization will no longer be considered a hidden profit distribution to the shareholder.