Most employees are expected to have more disposable income in 2025, according to calculations by ADP, which manages payroll for many companies and organizations. Individuals with an average gross salary of €3,588 will receive an additional €56 monthly.
This increase is mainly due to a reduction in income tax for middle incomes, with the first tax bracket rate decreasing from 36.97% to 35.82%. Retirees will also benefit from lower taxes, saving €12 monthly if they have a supplementary pension of €1,000.
However, those with low incomes will be adversely affected. Workers earning between €1,000 and €2,000 gross per month will pay approximately €30 more in taxes each month.
This is partly because the maximum general tax credit is reduced, leading to higher taxes for part-time workers and others with low incomes, as explained by ADP. Unlike previous years, where inflation offset tax cuts, economists predict the situation will improve in 2025, as wages are expected to rise more than inflation.
This anticipated increase in real wages is supported by economic forecasts from ING, Rabobank, and ABN Amro, attributed to significant wage increases in new collective labor agreements, averaging 5% as reported by the employer association AWVN.
Source: NOS