Netherlands 2026 Tax Plan: Key Changes Employers Should Know

On 16 September 2025, the Dutch government presented the 2026 Tax Plan package to Parliament, outlining a range of proposed tax and payroll changes that will take effect in 2026 and beyond. These proposals impact payroll taxes, income tax brackets, social security contributions, and various employer obligations.

For companies hiring foreign talent or managing a workforce in the Netherlands, especially through a Netherlands Employer of Record (EOR) like Tarmack, understanding these changes early helps with planning, compliance, and cost management. (KPMG)

What’s in the 2026 Tax Plan Package

1. Income Tax and Wage Tax Adjustments

The Dutch Tax Plan includes updates to income tax brackets and credits that affect employees and employers alike:

• The upper limit of the first income tax bracket will be increased, and thresholds in higher brackets are adjusted to reflect inflation and wage growth.
• General tax credits and labour tax credits are also increased slightly for 2026, reducing the net tax burden for workers.
  These adjustments impact overall employment costs and individual employee take-home pay. (Government.nl)

2. Payroll and Social Security Contributions

Proposals include changes to social security contribution ceilings and rates:

• Employers may see adjusted maximum wage tax ceilings, affecting how much social security must be collected.
• Certain contribution rates for health insurance and employee insurance schemes are recalibrated to balance the financing of social benefits.
  These updates may lead to changes in payroll costs your organisation must budget for in 2026. (Meijburg & Co)

3. Expat Regime and Expat Cost Reimbursements

The 30% ruling — a tax facility for highly skilled expatriates that allows employers to pay up to 30% of the employee’s wage tax-free — is not changed in the 2026 Tax Plan package itself. The government confirmed it will remain at 30% in 2025 and 2026. (KPMG)

However, there are other expat-related developments you should know:

• From 2026, the extraterritorial cost reimbursement scheme will be curtailed. Expenses for general living costs (like utilities and phone calls home) can no longer be reimbursed tax-free. (Government.nl)
• Previously planned changes — outside this specific tax plan — will lower the maximum 30% tax-free allowance to 27% from 1 January 2027. Transitional rules will apply to those already under the scheme. (business.gov.nl)

This means employers should be prepared for evolving tax benefits for expat employees as part of broader policy trends, even if the core 30% rule stays the same through 2026.

4. Proposed Employer Levies

One notable proposal in the 2026 Tax Plan package is a new employer levy on non emission-free vehicles:

• If an employer provides a company car that is not fully electric and it can be used privately, the employer may have to pay a levy of 12% of the catalogue value of the car.
• This levy is proposed to take effect from 1 January 2027, giving employers time to adjust fleet policies. (KPMG)

Such measures encourage greener business practices and can influence company car policies, especially for international assignees and mobile employees.

What This Means for Employers Hiring International Talent

1. Planning Around Tax and Payroll Costs

The revised tax brackets, social security ceilings, and employer contribution rates mean employment costs may change even if gross salaries stay the same. Employers should analyse total cost of employment before setting offers or renewing contracts.

2. Expatriate Compensation Strategies

With the 30% ruling unchanged for 2026 but other reimbursement benefits limited, companies should:

• Review whether the expatriate tax facility aligns with compensation structures
• Adjust assignment policies to account for curtailed tax-free reimbursements
• Prepare for the change to a 27% expat allowance in 2027

This helps maintain competitive and compliant global mobility packages.

3. Corporate Fleet and Policy Review

If your organisation provides company vehicles — especially to expats or mobile workers — you may want to consider transitioning to electric or zero-emission vehicles ahead of the proposed levy in 2027.

How Tarmack Supports Employers Through These Tax Changes

Navigating evolving tax rules and expatriate benefits can be complex, especially when hiring globally or expanding into the Netherlands. Tarmack provides Netherlands Employer of Record services that help:

• Align compensation packages with current tax regulations
• Manage payroll and compliance for local and expat workers
• Update assignment policies for benefits like company cars
• Advise on expatriate tax facilities and reimbursement practices

With an experienced EOR partner, your organisation can stay compliant, competitive, and cost-effective as tax laws evolve.