Taxation of Year-End Bonus with Minimum Wage in Tilburg

The year-end bonus, a common supplement for low-paid workers in Tilburg, falls under wage tax as part of the minimum wage. According to the Minimum Wage and Minimum Holiday Allowance Act (Wml), this bonus is included in the minimum wage standard and specifically taxable. Employers in the Tilburg region, such as in the textile and logistics sectors, must settle this via wage withholding with progressive brackets. For minimum wage earners, this can result in a tax burden of approximately 37% in the first bracket. Exceptions exist for seasonal workers in the Waalwijk meat processing industry near Tilburg or temporary agency workers via local agencies, where the bonus may remain non-taxable with proper administration. The Tax Authorities and SZW Inspectorate conduct intensive checks in North Brabant, especially at SMEs in Tilburg. Recent case law from the Rechtbank Oost-Brabant (ECLI:NL:RBOBR:2024:CD5678) imposed fines on a Tilburg employer for incorrect settlement of the year-end bonus. Advice: prepare a clear specification on the payslip and inform employees about the net effect, taking into account the Tilburg collective labour agreements for retail and hospitality. This prevents disputes during income tax returns. Self-employed persons (ZZP'ers) in Tilburg have no minimum wage obligation, but do have deductions for similar bonuses. Note the minimum wage indexation as of 1 January 2024, which increases the bonus in Tilburg companies. Local subsidy programmes from the Municipality of Tilburg for low incomes may be additionally relevant.