16% employers levy for salaries in access of € 150.000

16% employers levy for salaries in access of € 150.000

In the 2013 Budget Agreement a one-time employer levy of 16% is due on wages (including bonuses, benefit in kind, et cetera) that exceed € 150,000 in 2012. The levy is also applicable to employees who are shareholder of the employer as well.

Key information

The name says it all: it is a tax that needs to be paid by the employers and not by employees nor the taxable profit for self proprietors (other than employers). Employers, including entrepreneurs who are employed by their own company, are subject to the levy, for salaries exceeding € 150,000 in 2012. For example, for a salary of € 160,000 the employer will pay 16% extra on € 10,000, which amounts to € 1,600. 

The 2012 excess will be taxed on March 31, 2013, so the 16% has to be paid in April 2013.

There are anti-abuse rules so changed agreements to defer or lower taxable income in 2012 will be disregarded. Director-shareholders can lower their salary as long as the new salary is not more than 30% lower than what is considered a "normal salary" (usual salary scheme). It is possible to defer salary elements that are discretionary, f.e. a discretionary bonus.

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Source: Bijlage - Wet uitwerking fiscale maatregelen Begrotingsakkoord 2013

What does this mean for our relationships?

The Netherlands has a lot of rules. There are minimum salary rules (usual salary scheme) for director-shareholders. If you do well and enjoy a high salary, you nor your employer can agree to temporarily lower your salary to avoid 16% employers levy. The levy is supposedly due only once. But we heard that before. It's always easier to introduce a tax than to abolish a tax. It does pay to look at the salaries that will exceed € 150.000 in 2012 to see what is possible to reduce the 16% burden.