Taxation of End-of-Year Payment with Minimum Wage in Rijswijk

The end-of-year payment, a common supplement for low-wage earners in Rijswijk, falls under wage tax as part of the minimum wage. According to the Minimum Wage and Minimum Holiday Allowance Act (Wml), this payment is included in the minimum wage standard and specifically taxable. Local employers in Rijswijk, such as in the retail sector along Generaal Spoorlaan or at care institutions in the Innen district, must settle this via wage withholding with progressive brackets. For minimum wage earners, this often results in a tax burden of approximately 37% in the first bracket. Exceptions exist for seasonal workers in the nearby greenhouse horticulture or temporary agency staff via Rijswijk agencies, provided they are correctly administratively handled as non-taxable. The Tax Authorities and SZW Inspectorate conduct intensive checks in the Haaglanden region, with a focus on SMEs in Rijswijk. Recent case law from the District Court of The Hague (ECLI:NL:RBDHA:2024:XY5678) imposed fines on a Rijswijk transport company for incorrect settlement of end-of-year payments. Advice: prepare a clear specification on the payslip, inform employees about net effects, and archive this for income tax return. Self-employed persons (ZZP'ers) in Rijswijk have no minimum wage obligation, but can claim deductions for equivalent bonuses via the local Tax Authorities office. Note the minimum wage indexation as of 1 January 2024, which increases the payment in Rijswijk collective labour agreements and affects taxation. (212 words)