The average purchasing power is increasing in 2016 by 1.8 percent. That's 0.4 percent more than was predicted on Budget Day. Next year most people, more than 90 percent, are financially better off.
This means that next year, a househol will have 8 hundred euros more, on average. Employees receive an average of almost 1,200 euros more next year. Their purchasing power rose by 3 percent, especially for employees with lower incomes, who will experience a sharp increase in their purchasing power. This is expected to be the same for claimants and pensioners. This was discussed by Asscher, the Minister of Social Affairs and Employment in a letter to parliament.
For most people, the paycheck will improve because of this. For low income earners, this will be most beneficial. However, the incomes of people who earn around 60 thousand euros, will see a slight decrease. This is because they receive less tax credit (due to the reduction of the general tax).
A number of schemes are not on the pay slip, but will begin next year. For example, families with children eill receive a higher personal budget and more allowances. For dual income earning families, this means a higher childcare allowance and a tax rebate, called the income-related combination tax. The care allowance also increases.
This marks a decidedly positive effect for people affected by the new taxation proposals from the cabinet, as there will be an increase in employment generated. Moreover, inflation is lower than previously expected, while wages are rising faster. The care and pension premiums are lower than expected on Budget memorandum. Ultimately, this is good for the wallet.
The first paycheck in 2016 is when purchasing power is most visible in the new year. But not everything is on the payslip. The changes in the supplements are not on the pay slip and also the effect of inflation is not on there. Furthermore, the wage increase is not attributed to anyone in January. All this is included in the purchasing power. The paychecks are somewhat less favourable than the purchasing power figures.