Tax changes in 2025 to boost income for most Dutch workers, says payroll firm
The first paychecks of 2025 are expected to deliver a net income boost for most Dutch employees due to tax reductions and adjustments to government rebates, according to calculations by HR and payroll software provider Nmbrs.
The income tax rate in the first bracket will drop from 36.97 percent to 35.82 percent for incomes up to 36,393 percent, the Cabinet-Schoof announced. Meanwhile, the general tax credit, a rebate applied to reduce taxes owed, will decrease from 3,362 euros to 3,068 euros. However, the income threshold for reducing this tax credit will rise from 24,812 euros to 28,406 euros, offering relief to many mid-level earners.
“For many workers, these changes represent a welcome improvement in purchasing power,” said Nmbrs. “Employees earning a gross monthly salary of 2,160 euros or more will see this reflected positively in their net pay.”
Employees earning less than 2,159 euros gross per month will see a slight decrease in their net income. This group will not fully benefit from the tax reductions, as the lowered general tax credit affects them disproportionately. Workers with salaries over 28,406 euros will largely experience positive changes due to the combination of reduced taxes and higher thresholds for tax credit reductions.
The general tax credit for employees earning 28,406 euros or less will remain at its maximum of 3,068 euros. Although this figure is lower than in 2024, it is partially offset by a slight increase in the employment tax credit, which will rise by about 60 euros annually.
The minimum hourly wage will increase to 14.06 euros in 2025, a 2.75 percent rise compared to 2024. The adjustment reflects a move toward more standardized wages across industries, as the calculation now includes paid leave and sick days. According to Statistics Netherlands (CBS), 474,000 jobs paid minimum wage in 2023, making this change significant for many workers.
Additionally, the tax-free allowance for home office expenses will rise to 2.40 euros per day, a 2.13 percent increase. Employers can offer this allowance without tax obligations to compensate employees for the costs of working from home.
