Q1 2025 insights: Key trends in the Dutch employment market

The Dutch labor market remains in constant motion, and the first quarter of 2025 is no exception. From stricter regulations on ‘fake freelancing’ to the impact of high inflation, in this article, Magda Kmetyk, IQ Staffing’s Director of Operations, highlights the trends that will define the market this quarter.

The impact of high inflation

After a record high of 11.6% in 2022, inflation in 2024 decreased to 3.2%. According to the Dutch Central Bank (DNB), inflation is expected to remain at 3.2% in 2025. As a result, inflation in the Netherlands is expected to remain higher than in the euro area in the coming years. The difference is mainly due to domestic factors: high demand, strong wage growth and rising rents.

This economic environment is driving increased wage expectations from employees, particularly in sectors with tighter margins. Employers must find a balance between staying competitive and managing costs effectively. Flexibility in working arrangements and strategic staffing solutions are becoming critical to retaining top talent.

Minimum wage increases

The trend of wage increases continues this year. From 1 January 2025, the gross minimum wage for workers over 21 will be €14.06 per hour. The minimum wage for younger workers will also increase, depending on their age. The specific amounts can be found on the website of the Rijksoverheid.

Reduced tax burden on income

Each year, the government adjusts various taxes. In 2025, it is slightly lowering the tax burden for low and middle-income earners by revising the income tax brackets. The following changes have been introduced:

A tax rate of 35.82% on income up to €38,441 (down from 36.97% in 2024).
A tax rate of 37.48% on income between €38,441 and €76,817 (up from 36.97% in 2024).
The 49.50% tax rate on income above €76,817 remains unchanged.

Updated salary criteria for highly skilled migrants

To qualify for a Highly Skilled Migrant (HSM) visa in the Netherlands, international workers must meet minimum salary requirements, which are updated annually. As of January 2025, the required gross salary thresholds are €4,171 per month for employees under 30, and €5,688 per month for employees over 30. For more detailed information about the HSM Visa, check out this article:

The Netherlands HSM visa process made simple

Cracking down on “fake” freelancing

As we reported last year, the Dutch tax authorities will enforce the DBA law more strictly in 2025 in an attempt to curb ‘fake’ freelancing. This change has already caused considerable uncertainty among freelancers, with the Chamber of Commerce’s ZZP monitor showing the first decline in self-employment in five years.

In response, more professionals are exploring alternative models such as permanent contracts or secondment arrangements. These structures offer the flexibility freelancers value while ensuring compliance with labor laws.

To meet these evolving needs, IQ Staffing, together with its sister organization IQ Search, offers a comprehensive suite of solutions:

Recruitment: For permanent positions.
Secondment: Flexible deployment of professionals with DBA-proof contracts.
Freelance Placement: Matching freelancers with specific projects.
DetaVast: The perfect balance between flexibility and security.

Rebranding expat rule and updated salary norms

As you may already be aware, the Dutch government has reversed the proposed changes to the 30% rule for 2024. This means there will be no 30%-20%-10% phased approach. Instead, the familiar 30% tax-free allowance remains intact, with a few updates and a rebranding to the Expat rule starting in 2025. While the name has changed, its purpose remains the same: providing a tax advantage to attract international talent to the Netherlands. To qualify for the Expat rule, taxable salaries must meet the following thresholds:

€46,660 annually for general applicants (2024: €46,107).
€35,468 annually for employees under 30 with a qualifying master’s degree (2024: €35,048).
No salary norm applies to scientific researchers or doctors in training to become specialists.

Employers should ensure taxable salaries exceed these thresholds, even if only by €1, to ensure compliance and avoid potential payroll complications.

An income cap introduced in January 2024 continues to apply in 2025, limiting the 30% tax-free allowance to a maximum annual salary of €246,000. Any income above this cap is not eligible for the allowance.

Transitional rules apply for employees who used the 30% ruling in December 2022. For these individuals, the income cap will only take effect on January 1, 2026.

Conclusion

The labor market remains tight and dynamic in 2025. Both employers and employees are focused on finding DBA-proofwork arrangements without compromising on flexibility.

At IQ Staffing, we combine our expertise with tailored solutions to ensure that both employers and candidates can make the most of this challenging market. Together, we build lasting relationships and future-ready teams.

Do you have questions about how to find the right IT professionals in this tight market? Or could you use some help with your next career move? Feel free to contact us.

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