Budget Day 2021: Payroll taxes

The (tax) plans for the coming year were officially announced on Budget Day 2021. Mazars has listed the most important (tax) proposals from the taks package fort he upcoming calender year. What do these proposals mean for your business?

Work costs arrangement

On the basis of the work costs arrangement, an employer has a budget for giving employees a tax-free allowance that amounts to 1.18% of the total taxable salary. The surplus is taxable at a rate of 80%. For 2020 and 2021, the percentage over the first €400,000 of total taxable salary is 1.7%, but to create more financial room for employers, for 2021 the percentage over the first €400,000 of total taxable salary is increased from 1.7% to 3%.

Home working allowance

The government is introducing a new targeted exemption for the additional costs associated with working from home. An employer may reimburse € 2 per day of working from home tax-free. This allowance is for additional costs of water and electricity consumption, heating, coffee, tea and toilet paper. This also applies to days when the employee only partially works from home. The principles are:

  • A fixed allowance may be given based on the agreement between the employer and employee on the distribution of home working days and days at the fixed place of work (for example, the office).
  • This fixed allowance can be based on the so-called 128-day rule (which we already know from the fixed travel allowance); this means that not every home working day needs to be declared or administered and it is not necessary to adjust the fixed home working allowance if incidentally on a structural home working day no home working takes place.
  • The fixed home-working allowance is aligned with the fixed travel allowance (for travel to the fixed place of work).
  • The arrangement has been designed as a targeted exemption and is therefore not at the expense of the available free space of the work-related costs scheme.
  • The arrangement will enter into force on January 1, 2022.

Usage wage regulation for innovative start-ups

The relaxation of the customary wage scheme for innovative start-ups, which would expire on January 1, 2022, will be extended by one year. The taxable wages of directors and major shareholders of innovative start-ups may be set at the statutory minimum wage for the application of the customary wage scheme.

Employee stock options scheme

It had already been announced earlier: as from next year, a scheme will be introduced to prevent employers or their employees from running into money problems if stock options are granted as wages. This is particularly relevant for start-ups, where employees are more often rewarded with stock options. If an employee exercises stock options and converts them into shares, tax must be paid immediately. Because the shares may not always be sold again immediately, an employee may run into problems because he does not yet have any money (but only shares) to pay the tax. With this scheme, there will be an option. Employees can choose between two moments as of January 1, 2022:

  •  The employee pays tax at the time when the shares are tradable and therefore money is available
  •  The employee pays tax at the time the options are converted into shares (as it was)

Incidentally, the choice option applies not only to start-ups, but to every employer.

Want to know more?

Would you like to know more about the 2022 Tax Plan, the proposed changes and what this means for you? Then please contact Alexander Rasink by e-mail or by phone: +31 (0)88 277 16 15. He is happy to help you.