As of January 1, 2026, there will be significant changes to labor law. These range from an increase in the minimum wage and the maximum transition allowance to stricter enforcement regarding bogus self-employment. In this article, we outline the most important changes, including a preview of the proposed labor law amendments expected in 2026 and 2027.
The maximum transition allowance is increasing to €102,000
Effective January 1, 2026, the maximum transition allowance has been increased from €98,000 to €102,000 gross. Employees whose annual salary exceeds €102,000 are entitled to a maximum of one gross annual salary as a transition allowance. The increase results from the annual indexation based on contractual wage developments.
The transition payment amounts to one-third of the gross monthly salary per year of service. Fixed salary components, such as vacation pay, a thirteenth-month bonus, and regular bonuses, are also included in the calculation. Good to know: the transition payment is a statutory minimum. A higher payment may be agreed upon in a settlement agreement.
Higher minimum wage: €14.71 per hour
As of January 1, 2026, the statutory minimum wage has increased to €14.71 gross per hour for employees aged 21 and older. This represents a 2.15% increase compared to the previous six-month period (€14.40). The minimum wage is adjusted every six months based on average wage growth in the Netherlands.
Since 2024, the Netherlands has had a minimum hourly wage instead of a fixed monthly wage. As a result, the monthly wage depends on the number of contracted hours. Separate minimum youth wages apply to employees under the age of 21.
Tax-free work-from-home allowance and travel allowance
As of January 1, 2026, the maximum tax-free work-from-home allowance has been increased from €2.40 to €2.45 per day. No payroll taxes are due on this amount. Employers may reimburse a higher amount, but must then pay payroll taxes on the excess.
The tax-free travel allowance will remain unchanged at €0.23 per kilometer in 2026. On any given workday, an employer may not apply both the tax-free work-from-home allowance and the tax-free travel allowance; a choice must be made on a daily basis.
Enforcement and fines for bogus self-employment
Since January 1, 2025, the Tax and Customs Administration has resumed full enforcement against bogus self-employment. The enforcement moratorium that had been in place for years has been permanently lifted. In 2025, a transition period was still in effect during which no fines could be imposed. That transition period expired on January 1, 2026. From that point on, the Tax and Customs Administration may also impose administrative fines in cases of intent or gross negligence.
For employers who work with self-employed contractors, it is important to carefully assess employment relationships. The Tax and Customs Administration evaluates these relationships based on the criteria set forth in the Deliveroo ruling, which focuses on control, organizational integration, and working at one’s own risk and expense. The classification of the employment relationship must correspond to the actual situation.
Looking Ahead: New Legislation on the Horizon
In addition to the changes that have already taken effect as of January 1, 2026, several legislative proposals are currently under consideration that will further alter labor law in the coming years.
Bill to Modernize Non-Competition Clauses
This bill aims to restrict non-compete clauses. At this time, it is not yet clear when this bill will take effect.
VBAR Act (Clarification of the Assessment of Employment Relationships and Legal Presumption)
In March 2026, the government announced that it would largely scrap the VBAR bill. The provision regarding the legal presumption of employment for hourly rates below €38 remains in place and will be further developed separately. The remaining criteria will be replaced by a new bill: the Self-Employed Persons Act. It is still unclear exactly when this legislation will take effect.
Act on the Admission and Placement of Workers (WTTA)
The WTTA has now been enacted and is expected to take effect on January 1, 2027. This law introduces a licensing system for temporary employment agencies and other companies that provide workers.
Act on Greater Security for Flexible Workers
This bill was originally scheduled to take effect on January 1, 2026, but the parliamentary review process was not completed on time. The proposed effective dates are July 1, 2026 (equal pay for temporary workers) and January 1, 2027 (other provisions). Recent reports from March 2026 indicate that these dates are also unlikely to be met: the plenary debate in the House of Representatives is expected in April 2026, after which the bill must still pass the Senate. A delay is therefore to be expected.
European Directive on Pay Transparency
The Pay Transparency Directive was supposed to be implemented into Dutch law by June 7, 2026, at the latest. The Netherlands will not meet this deadline. The bill was submitted to the Council of State for review in January 2026, with an intended effective date of January 1, 2027. The European Commission has indicated that it will not accept a postponement, but the Netherlands is sticking to the later timeline for now. For employers with 150 or more employees, the first reporting obligation is expected to apply to the 2027 calendar year.
This blog was written by Stijn Blom, Esq., an employment law attorney at Arbeidsadvocaat.nl B.V. Stijn has extensive experience in employment law and assists employers and employees on a daily basis with a wide range of employment law issues. From dismissal cases and workplace accidents to drafting watertight agreements and regulations—with his practical and personal approach, he helps employers and employees move forward. Want to learn more? Visit Stijn’s page.
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