Last week the tax department let us know that your payroll slip will be so compact and simple in the future that it can be sent by SMS or as tweet. This news relates to the new law that will come into effect from 2013 and make it possible to simplify the payroll slip. In previous blogs I already mentioned the need for this and finally a number of steps are being taken towards it.
The new law intends to make the payroll calculation simpler and improve the readability of the payroll slip. Also it will reduce the handling costs of employers. So let’s have a look at how this new future simple payroll slip will look and if it really fits on a text message.
The Dutch government wants to reach the simplification goal by firstly introducing one base for both payroll tax and the insurances. In the current situation there are three bases: wage for employee insurances (Loon voor sociale verzekeringen), wage for health insurance (Bijdrageloon voor Zorgverzekeringswet) and wage for payroll tax (Loon voor loonheffing). All these wages will be merged in one base covering all the payroll taxes and insurances. A number of measures are necessary to reach this goal and the law to handle this has now been passed and will come into effect as of 2013. The payroll slip that you receive then could be as follows:
The next step will be for the government to work towards one tax percentage over the total wage of the company. This will mean that the employee will not be charged individually anymore but the employer will be charged for all employees over the total wage. Further details about how this will work in practice are not known yet, but in this was the case, the payroll slip could look as follows and indeed be sent via a text message.
The above examples are really simple payroll slips without any components other than the salary. As such, more lines would probably be printed. That said, it is still simpler than the current situation. And concerning the simplicity: there are still a lot of collective labor agreements and pension funds that will complicate things. So to reach the ultimate goal, something must also change in the minds of the pension funds and the branch organizations.
The last thing I would like to mention is that the tax department speaks of the payroll slip as a tweet. I think they didn’t realize that twitter is a public medium so that each salary in that case would also become public. In the Netherlands it is not common to talk about your salary with others. Maybe the tax department finally wants to break with this taboo…..