From 1 January 2027, Dutch employers may no longer apply the labour tax credit to specified benefits paid through payroll. The same applies to self-insured employers. Affected workers may receive less net pay, although gross salary and benefits stay unchanged. Payroll records and wage-tax reporting will change.
Why this matters
Covered payments include WGA, IVA, WAO, WAZ, Wajong and certain Sickness Benefits. Around 11,000 people receive an incapacity benefit through an employer. When salary and benefits share a payroll run, payroll may need two income records. Apply the labour tax credit only to current-employment income. Combine white and green tables as required. A lower bank payment can look like a pay cut. The payslip and employee message need to explain it. IACK may also fall. Toeslagen are unaffected.
Example
The official illustration uses monthly pay of €3,000, including a €2,000 WGA benefit. Under the revised calculation, net pay is €374.50 lower per month. This is not a January 2027 estimate. The illustration uses 2026 tax tables. It shows why affected payroll files need checking before the first 2027 run.
XTROVERSO tips
- Find the affected payroll files. List employees receiving covered WAO, WAZ, Wajong, IVA, WGA, Sickness Benefit or related payments through payroll. Also check payment flows under a self-insured employer arrangement.
- Get written confirmation from payroll. Ask how the provider will split income records, allocate the labour tax credit and combine white and green tables. A general software-update notice is not enough.
- Check contracts and payment labels. Review records for salary, benefits and employer supplements. Give each payment the correct payroll classification. Amounts in one payroll run can have different tax treatment.
- Prepare the employee message. Explain that gross salary and benefit entitlement may stay the same while withholding changes. Do not promise compensation before checking payroll cost, tax treatment and the contract.
- Review the first 2027 payroll run. Check payslips, income records, wage-tax reporting and exceptions before payments leave the bank. Tell relevant employees that a provisional IACK assessment may need review in early 2027.
Want a practical review of your 2027 payroll setup and employee message? Our team can help
The data, sourcing, and analysis behind this article were conducted by Linda Pavan. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Linda Pavan before publication.
References
- Belastingdienst — Nieuwsbrief Loonheffingen 2027
- Rijksoverheid — Einde arbeidskorting over arbeidsongeschiktheidsuitkeringen
- Belastingdienst — Arbeidskorting, IACK en loonadministratie
- Rechtspraak — Hoge Raad, ECLI:NL:HR:2024:1657
- Rijksoverheid — Kabinet verandert regels arbeidskorting
- Salaris Vanmorgen — Gevolgen voor werknemers
