It is almost time: at the end of this month, employees will receive their first pay slips of 2022. These should show a slight increase in net incomes. But how much will workers with different incomes benefit?
A number of factors come into play here. For example, last year the outgoing Rutte III cabinet tinkered a bit with the tax rates and discounts you get on the tax to be paid. For employees, among other things, the employed person’s tax credit is important.
On the basis of the tax adjustments, you can calculate how this will work out net if the gross salary remains the same. The payroll software provider Employes has illustrated this with the following table.
This shows that someone who receives the minimum wage of 1,725 euros gross per month – which applies from the age of 21 – gains 33.70 euros net due to tax benefits.
With an average income of just over 2,800 euros, you will gain just under a tenner a month net this year. And if you earn 4,500 euros gross per month, you will receive a net 17.66 euros more per month in 2022.
With the above calculations you have to keep in mind two things. In the first place, wage increases are not taken into account here. So if your gross salary is increased, the net increase can be even higher. Furthermore, for employees with a pension scheme, an adjustment of the level of the pension contributions can influence the income picture. How this works out depends on which pension fund you fall under.
Wage increases are offset by high inflation
Finally, a higher wage is nice, but the prices of goods and services also rise. And inflation is going pretty fast. Prices rose by an average of 2.7 percent last year, the Central Bureau of Statistics has calculated. How much will your wage increase in January 2022 to make up for that and bring the purchasing power of your income in line with last year’s inflation?
Suppose you earn something above average: 3,000 euros gross per month. According to the Employes table above, you will gain 10.75 euros net per month due to the tax changes in 2022. In percentage terms, that is only 0.4 percent. To make a net gain of 2.7 percent, in this example you have to earn almost 65 euros more per month.