In January, the first pay slip of 2022 will fall on the mat, or rather: in your mailbox. How does that work out net? An inventory by payroll processor ADP shows that most employees are improving. The strongest increase can be seen among employees who earn twice the average.
ADP has looked at the effect of tax measures on the development of net wages and pension contributions per sector. Any wage increases are therefore not included.
The table above shows that employees with a minimum wage, an average salary of 2,932 euros gross per month and twice the average (5,864 euros gross per month) improve. For average employees, it is about ten euros per month and twice the average will receive an additional 24 euros per month.
The increase in net wages that is expected for most employees is partly due to the reduction in the tax rate in the first bracket of income tax. For incomes up to 69,399 euros, that rate will be slightly reduced to 37.07 percent. A number of tax credits that you can deduct from the tax to be paid will also increase and the minimum wage will increase.
The only exception is part-timers, who receive 3 euros less per month. This is due to a lower employed person’s tax credit for this group.
Wage rise not strong enough to offset higher inflation
The increases in net wages calculated by ADP amount to pluses from 0.36 percent to 1.19 percent in percentage terms. The focus was purely on tax effects and the like, and not on wage increases by the employer. The net wage increases due to the tax effects are clearly not high enough to offset inflation. Rabobank economists, for example, expect inflation of 3.8 percent this year, which would require substantial wage increases to keep the purchasing power of wages stable.
As of this year, employers may give a tax-free home work allowance of 2 euros per day. On the other hand, the travel allowance may be partly lost and this is not fully compensated by the homework allowance. Employers may only pay the travel allowance this year on the basis of the travel costs actually incurred.
The sector picture, which looks at the effect of pension contributions, does not deviate very much from the general picture with regard to the development of net wages. In 2022, an average construction worker will receive an additional 14 euros per four weeks.In 2022, someone with a supplementary pension (on top of the AOW) of EUR 500 gross per month will receive a net addition of EUR 1.35 per month. With a supplementary pension of 2,500 gross per month, this is a net extra 7 euros.