Rising living costs continue to put pressure on employees and employers across Europe, driven by inflation, energy prices, and ongoing geopolitical instability linked to the situation in the Middle East.
Recent developments in the Netherlands, France and Romania show that governments are increasingly using payroll-related measures, such as tax-free allowances and minimum wage increases to offset financial pressure on workers. For payroll teams, these changes reinforce the importance of monitoring legislative developments and ensuring that payroll systems and processes remain compliant.
Netherlands Increases Tax-Free Travel Reimbursement
The Dutch government has officially approved an increase in the maximum tax-free travel reimbursement to €0.25 from €0.23 per kilometre, retroactive from 1 January 2026. The measure aims to help employees manage rising commuting and transport costs. This increase doesn't necessarily require employers to increase their tax-free travel allowance unless the amount in employment contracts or Collective Labour Agreements is directly linked to the statutory maximum.
Payroll teams should, together with HR teams, review the financial and operational impact of the statutory increase. If required, payroll and HR teams will need to update payroll configurations, travel reimbursement policies, and employee communication. Since this may include retroactive changes, revised payroll tax returns will also be required. Employers will also need to assess whether existing reimbursement policies should be aligned with the new maximum threshold.
Minimum Wage Increase in France and Romania
France has announced a 2.41% increase in the statutory minimum wage, effective 1 June 2026. The hourly SMIC (Salaire Minimum Interprofessionnel de Croissance) is increased to €12.31 from €12.02, raising the gross monthly salary to €1,867.02 from €1,823.03. The increase applies to the SMIC, France’s national minimum wage framework, and reflects ongoing efforts to support household purchasing power amid rising living costs.
Romania has also announced a new national minimum wage increase, effective 1 July 2026. The monthly gross minimum wage will increase to RON 4,325 from RON 4,050 (an increase of about 7%), as part of the government’s broader efforts to address inflation and cost-of-living pressures.
Payroll teams supporting employees in France and Romania will need to ensure that salary levels, payroll calculations, and employment agreements remain compliant with the updated rates. The increase may also affect salary bands, overtime calculations, and labour agreements.
Key Takeaways
The recent payroll-related measures in the Netherlands, France, and Romania demonstrate how governments are responding to rising living costs through wage increases (also mid-year) and other employee support measures.
For payroll teams, these changes further underscore the importance of proactive compliance monitoring, strong payroll governance, and timely system updates. While many of these adjustments may appear operational, they also demonstrate payroll’s critical role in helping organisations respond to economic and legislative change across multiple jurisdictions.
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Max van der Klis-Busink, MCIPP, RPP, is the Owner of Passion For Payroll.
