Consequences of and restrictions to participation in tax regulations

Consequences

The use of salary, holiday allowance or end-of-year bonus may have consequences for possible social security benefits such as the WW benefit (Werkloosheidswet, Unemployment Act) or the WIA benefit (Wet werk en inkomen naar arbeidsvermogen, Employment and Income according to the Capacity to Work Act):

  • A deduction will be made from your salary (and/or holiday allowance and end-of-year bonus), which means that the salary that entitles you to social security benefits decreases. WW/WIA benefits are calculated on the basis of this entitlement.

  • An increase or decrease in your gross taxable salary can have consequences for other regulations such as rent benefit and care allowances as well as student grants and loans.

N.B. Participation in the Terms of Employment Individual Choices Model has no consequences for your pension accrual.  

Please note
It is possible that changes in legislation may result in unforeseen disadvantages. Leiden University is not liable for any adverse consequences arising from such changes. If you have any questions, please contact your HRM department.

Restrictions

  • The total reduction in your standard gross taxable salary may not amount to a total of more than 30%.

  • If you use salary, your remaining salary may not fall below the statutory gross minimum wage.

  • If you use holiday pay, the remaining holiday pay may not fall below the statutory minimum.

  • If you use leave hours, the number of days holiday you have available may not fall below the statutory minimum (20 for a full-time contract).

Example of tax options

You may want to make use of a tax option within the Terms of Employment Individual Choices Model and use € 200 as a source (e.g. professional expenses, gym etc.). You want to offset this sum against your gross annual bonus of € 3300. The special tax rate is 42%. Advantage: your tax advantage in this example amounts to € 84 (42% x € 200).

Last Modified: 23-01-2012