Just like every other year, the laws and regulations concerning payroll administration are undergoing changes. 2011 also sees some important changes alongside the more regular adjustments in amounts and percentages. In this blog I will give you a brief overview of the most important changes for the payroll year 2011 in the Netherlands.
Employment cost regulation
A new regulation is introduced for 2011 regarding cost allowances and provisions. The idea is that every employer has a tax-free budget of 1.4% of the total fiscal wage. This budget can be used to give cost allowances to employees without paying the payroll tax for it. In case the employer pays more than the tax-free budget, the company has to pay a payroll tax of 80% over the amount that exceeds this budget. More information can be found on the site of the Dutch tax department.
Uniform calculation contributions
A next step has been made towards more uniformity within the calculation of social contributions. As of 2011, all contributions for employee insurances and health care will be calculated in the same way. The next important step will be probably made in 2012. The government has plans that as of 2012 all contributions will be calculated over the same base value and become for the account of the employer. At this moment the health care insurance (Zvw) is calculated on a different base value from the other contributions. This contribution is also still withheld from the wage of the employee. The plan is that as from 2012 the payroll specification will be more clear and simpler for the employee and that the administrative burden of the employer will decrease.
Extra tax table
As a result of the increasing costs for pensions, in 2008 it was decided that people older than 65 should pay more tax to keep our current governmental pension (AOW). This will become effective from 2011, an extra table being introduced for people that were born after 1946. They will pay a very slightly higher amount of payroll tax than the people born in or before 1946.
And last but not least you will wonder: what will happen with my net wage? Overall the net wage will be a bit higher than 2010 for every employee. For the lower incomes the increase of net wage will be a bit higher than the higher incomes.
I wish all payroll administrators a happy and an accurate 2011!!