Why This Matters to Micro and Small Business Owners

In the Netherlands, we often think of bonus schemes as a motivational tool: “If my team hits targets, they get an extra.” But the recently clarified case on the Enjoyment Moment Bonus Plan (KG:204:2025:15) is a perfect example of how a well-intentioned plan can become a tax headache, especially for small employers who lack the buffer of a large HR and tax department.

The case revolves around a salary exchange arrangement where an employee can forgo part of their regular salary (minimum 5%) in exchange for participating in a performance-based bonus plan. Targets are measured across the year, and any bonus is paid in April of the following year.

On paper, it sounds harmless. In practice, it creates a tax timing problem that can hit both you and your employees in the wallet.

The Core Tax Issue: “Enjoyment Moment”

The Wage Tax Act 1964 says wages are taxed when they are enjoyed, usually when paid. But Article 13a(2) adds a twist: if salary is received at an unusual time due to an agreement, the law pretends that no deferral exists, and tax is due when the salary would normally have been paid.

This means:

• The moment your employee agrees in January to swap salary for a future bonus, the forgone salary is already treated as taxable wages, even though they will only maybe get the bonus the following April.
• If the bonus is smaller than expected (or zero), there is no refund of payroll tax on the difference. Negative wages are not recognised.

For micro and small companies, this creates a double challenge:

1. Cash flow strain. You may have to remit payroll taxes on money the employee hasn’t yet received.
2. Employee dissatisfaction. If targets aren’t met, the employee effectively pays tax on income they never actually enjoy.

Why the Law Sees This as “Unusual”

The tax authorities and courts consider this set-up unusual because:

• Normally, bonuses are in addition to regular salary, not funded by reducing it.
• The benefit is uncertain (targets may not be met).
• Payment is deferred across the year-end boundary, shifting taxable income between years.

In Dutch payroll logic, anything that looks like shifting or shaping the salary stream for tax advantage triggers anti-deferral rules. This plan ticks those boxes.

Practical Risks for Entrepreneurs

If you run a micro or small company, the main risks are:

1. Payroll tax miscalculation
   If you mistakenly treat the bonus only as taxable when paid, you underpay payroll tax and face corrections, interest, and possible penalties.
2. Employee trust damage
   When staff realise they’ve been taxed early and may not get the expected net benefit, they may feel misled, even if your intentions were good.
3. Administrative complexity
   You need precise payroll coding to ensure the initial wage swap and the later bonus payment are both correctly reported and netted without breaching Article 10 limits.

Better Alternatives for Small Employers

If your goal is to align incentives without triggering the “enjoyment moment” trap:

• Use a bonus on top of regular salary: no salary exchange, just a performance reward in addition to agreed wages.
• Keep it within the same calendar year: pay the bonus by December to avoid crossing into the next tax year.
• Consider a net bonus: gross up the bonus so employees receive a guaranteed net amount regardless of tax timing.
• Check WKR possibilities: in some cases, a small bonus can fit under the work-related costs scheme (werkkostenregeling) if budget allows.

Final Word

For small business owners, the lesson is clear:

What looks like a clever motivational plan can become a costly compliance pitfall. The “Enjoyment Moment Bonus Plan” ruling shows that salary deferrals linked to uncertain bonuses are seen as unusual by Dutch tax law, and taxed as if they were paid upfront.

Before implementing any salary-bonus swap, get it reviewed by someone who understands both the payroll tax rules and the human consequences. In small companies, a single misstep here can wipe out trust, motivation, and financial stability in one go.