September 23rd, 2026
Employing staff in the Netherlands? We highlight the most important 2027 tax changes for Dutch and international employers.
1. Tax-free travel allowance increases
The maximum tax-free allowance for business travel and commuting increases from €0.23 to €0.25 per kilometre, retroactively from 1 January 2026.
Employers are not required by tax law to increase their reimbursement. However, if you currently reimburse €0.23 per kilometre, you can consider whether you want to increase this amount.
2. Employee discounts become less tax-friendly
The specific exemption for discounts on a company’s own products or services is proposed to be abolished.
Employers can still offer staff discounts, but these will generally have to be accommodated within the tax-free budget of the work-related costs scheme (werkkostenregeling or WKR), or treated as taxable remuneration.
Employers currently offering staff discounts should therefore review these arrangements.
3. Company cars: new employer tax for fossil-fuel cars
From 2027, employers may face an additional employer tax when making a fossil-fuel passenger car available to an employee for private use, including commuting.
The measure itself was introduced earlier, but the 2027 proposals contain important adjustments and transitional rules. In particular, cars already made available before 1 January 2027 can remain outside the new levy until the end of 2030.
The updated proposal also states that the new tax will not apply for cars that are used as a replacement for cars who undergo maintenance or repair. This applies for a maximum period of 14 days only per replacement. Also, the employer tax will not apply in situations where a car is made available to (an) employee(s) on a temporary basis not exceeding 7 days in total per calendar year.
Employers with company cars should review their fleet and lease arrangements before ordering or replacing vehicles.
4. Increase of employee insurance contributions
Employee insurance contributions are payable by the employer and these are expected to increase in 2027. The main change is an increase in the Aof premium (Disability Fund) by approximately 0.40 percentage points for both small and large employers. In addition, the average Whk premium (Return-to-Work Fund) is also expected to increase from 1.52% to 1.67% (the actual rate depends on the employer’s circumstances)
By contrast, the AWf unemployment insurance premiums are expected to remain unchanged at 2.74% for the low rate and 7.74% for the high rate.
As a result, employing staff in the Netherlands will generally become somewhat more expensive in 2027.
For example, an increase of 0.40 percentage points represents approximately €240 of additional annual employer costs on a salary of €60,000, assuming the full salary is subject to the premium.
5. Changes to the expat ruling
The expat ruling will also change from 2027. For many international employees, the maximum tax-free allowance decreases from 30% to 27%. Higher salary requirements will also apply to certain employees.
Transitional rules are important, meaning that different rules can apply to different employees within the same organisation.
Employers should therefore review their expat population and ensure that payroll systems are ready for 2027.
What should employers do?
The combination of changes to company cars, travel expenses, employee benefits and the expat ruling makes it advisable to review your payroll and remuneration policies before 2027.
The Tax Plan 2027 is still subject to parliamentary approval and the proposals may change. Would you like to know what these changes mean for your payroll or employees in the Netherlands? Please contact Broadstreet for further information.
