Extra tax bracket means most workers will have more money in their pocket next year
Most working Netherlands residents will receive a higher net salary in 2025, though some part-time workers will be worse off, according to calculations by payroll processor ADP. Pensioners will also have a bit more in their pockets. The additional income tax bracket that takes effect next is the main reason for the change. Many people will pay less tax than they do now. HR and payroll software provider Nmbrs reported similar findings earlier this week.
Currently, the Netherlands works on two income tax brackets. Anyone earning over 75,518 euros per year pays the high rate of 49.5 percent, while anyone earning less pays 36.97 percent. From next year, there will be an additional income tax bracket. The rate in the highest bracket will remain at 49.5 percent, while the one in the lowest bracket will drop to 35.82 percent. In between there will be a middle bracket for people earning between 38,089 and 75,518 euros per year, with an income tax rate of 37.48 percent.
That means that employees with an average gross salary of 3,588 euros per month will have 56 euros extra in their pocket from January, ADP calculated. People who earn the minimum wage and work 36 hours per week will get 41 euros more. Those working 38 hours on minimum wage will have 53 euros extra, and those with 40-hour weeks will get 58 euros more. The minimum hourly wage for people over 21 is rising from 13.68 euros this year to 14.06 euros next year.
The tax measures are less favorable for people earning between 1,000 and 2,000 euros gross per month, mostly because the general tax credit will be 294 euros less than this year. Workers who earn 1,000 euros per month get 22 euros less in their bank account. At 1,500 euros, it is 31 euros less, and at 2,000 euros, 32 euros less. This group mainly involves people who work part-time.
Pensioners will also have a bit more in their pockets next year, thanks to the lower tax rate. The lowest rate for State pension beneficiaries will decrease from 19.07 percent to 17.92 percent. That means that people with a supplementary pension of 1,000 euros per month will get 12 euros more, those with a supplementary pension of 1,500 euros will get 18 euros more, and those with a supplementary pension of 2,500 euros will get 30 euros more. Pensioners’ contribution to the Health Insurance Act will also decrease slightly.
