The Dutch Tax Administration has adjusted the form ‘Model Opgaaf gegevens voor de loonheffingen’. This change has direct consequences for employees who apply the payroll tax credit and for employers who are responsible for accurate payroll administration. With the new set-up, the Tax Administration wants to prevent the payroll tax credit from unintentionally being applied by multiple employers or benefits agencies at the same time.
More responsibility for employees regarding payroll tax credit
An important change is that employees must now first explicitly confirm that the payroll tax credit may only be applied by one employer or benefits agency at a time. Only then can they indicate whether they want the payroll tax credit to be applied by the relevant employer.
The revised set-up is visible in questions 2a to 2e on the form. Employees are expressly reminded of their own responsibility. In addition, they must declare that they have read the explanation before making a choice about applying the payroll tax credit.
Practical explanation helps prevent errors
The explanation has also been expanded with more practical guidance. For example, employees can check whether the payroll tax credit is already being applied elsewhere, for instance by consulting their payslip. In addition, instructions are provided on how to stop applying the payroll tax credit with another employer or benefits agency.
This additional information enables employees to make a well-informed decision. This reduces the risk that the payroll tax credit will inadvertently be applied to multiple sources of income at the same time.
Risks of double application of the payroll tax credit
The Dutch Tax Administration explicitly warns about the consequences of double application of the payroll tax credit. When multiple employers or benefits agencies simultaneously apply the payroll tax credit, too little payroll tax may be withheld.
This may result in an additional payment with the income tax return or a lower tax refund. Employees with multiple employment contracts, a combination of employment and a benefit, or different income sources should therefore take care to check their situation carefully.
What does this mean for employers?
For employers, this change provides a good opportunity to reassess the onboarding process, payroll administration and recruitment procedures.
- Always use the most recent version of the ‘Model Opgaaf gegevens voor de loonheffingen’ form.
- Check whether onboarding documentation and recruitment procedures are still up to date and aligned with the new requirements of the Dutch Tax Administration.
- Make employees with multiple jobs or benefits particularly aware of the possible consequences of making an incorrect choice regarding the payroll tax credit.
- Store the signed form carefully in the personnel administration.
Benefit for personnel administration
An additional advantage of the new form is that employers can better demonstrate that an employee has consciously made a choice regarding the application of the payroll tax credit. This contributes to a well-organised personnel administration and a clear record of decisions made.
In addition, proper documentation can help during audits and questions about the application of the payroll tax credit within the payroll administration.
Our advice: review your forms and onboarding process
Switch to the new form as soon as possible. Do you use your own form or a digital onboarding process? Then check whether the new questions about the payroll tax credit and the accompanying explanation have been fully incorporated.
By adjusting processes in time, you reduce the risk of errors in payroll taxes and help employees make an informed decision. This can prevent unexpected financial consequences for employees and administrative queries afterwards.
Would you like to discuss these insights further? Please contact us.
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