On November 1, 2021, the ‘levensloopregeling’ (life-course savings scheme) will definitively be closed to everyone. In other words, not only do employees who make use of this scheme have just a few months left to save up more money, they also have just a few months left to take out those savings. What should you keep in mind with respect to the payroll tax return when employees take out their life-course savings?
Since 2012, only employees who had a balance of € 3000 or more on their life-course savings account on December 31, 2011 are still permitted to continue saving money through the life-course savings scheme. However, in just over half a year those employees must also say goodbye to the scheme, as it will be officially closed to everyone on November 1, 2021.
On that date, all still existing life-course savings accounts will be officially closed and the accrued savings left on them will be made free for the employees to take out. The respective institutions where employees have their life-course savings accounts will then be responsible for handling this. However, until November 1 it is still the employer’s responsibility to deal with employees taking out life-course savings. Which code you should use in the payroll tax return for life-course savings taken out depends on the situation:
- the same code as for wages should be used for an employee who was younger than 61 years of age on January 1, 2021 and who is partly on a life-course savings scheme leave (‘levensloopverlof’ in Dutch, a leave of absence possible through the life-course savings scheme) and partly continues to work;
- the same code as for wages paid before the employee went on leave if the employee in question was younger than 61 years of age on January 1, 2021 and is currently on a full-time life-course savings scheme leave;
- code 54 if the employee in question was 61 of age or older on January 1, 2021.
In the last situation – i.e. where the employee in question was 61 of age or older on January 1, 2021 – any life-course savings taken out should be declared as wages from previous employment rather than current employment. What that means is that in the payroll tax return, you should use a different IKV (income relationship number) for the declaration of life-course savings than for the declaration of other income of the employee. The IKV used for the latter can only be used for income from current employment, such as salary and benefits. Wages from previous employment should be declared under a new, separate IKV. This is not only the case if the employee partly continues to work alongside a part-time life-course savings scheme leave, but also if (s)he goes on a full-time life-course savings scheme leave. In the latter case, you must use the following code in the payroll tax return: ‘incidentele inkomstenvermindering O: onbetaald verlof’ (incidental reduction of income O: unpaid leave)
When taking out life-course savings through your organization, the employee is entitled to a tax credit of € 223 (amount in 2021) for each calendar year up to and including 2011 for which the tax credit was not applied, with a maximum in tax credit equal to the amount in life-course savings taken out. When applying the tax credit to an employee’s payroll tax, you must declare this in the section ‘toegepast bedrag levensloopverlofkorting’ (applied amount for life-course savings scheme tax credit).
When on November 1 the life-course savings accounts are closed and the accrued savings left can be taken out, an employee’s right to the life-course savings scheme tax credit will also end. Make sure to inform your employees of this. When filing the payroll tax return for the last two months of 2021, you must therefore declare € 0 in the aforementioned section.
If employees take out life-course savings for an unpaid leave, you must adjust the number of paid hours declared in the payroll tax return:
- for a full-time unpaid leave, the number of paid hours should be changed to 0;
- for a part-time unpaid leave, the number of paid hours should be calculated in proportion to the time that an employee has worked.
Last possibility for savings
If this year an employee is still saving through the life-course savings scheme, you must declare the respective amount in the payroll tax return under the section ‘Gespaarde bedrag levensloopregeling’ (saved amount of life-course savings scheme) for the tax period in question. Any employer’s contributions to the savings must also be declared here. In principle, you must always declare a positive amount, but if you have to correct a previously declared amount which was too high, the correction can be made by declaring a negative amount.
Since the life-course savings scheme will officially close on November 1, this means that in the payroll tax return for the last two months of 2021, you must declare € 0 in the aforementioned section.