An increasing number of major employers in the Netherlands have decided to offer an employment benefit from 2025 that would allow staff to use their personal choice budget to pay back their DUO student loans, providing thousands in tax savings.
As of January 1, 2025, several major companies will make the scheme available to tens of thousands of employees in different sectors as new collective labour agreements come into effect. The tax benefit allows workers to repay their DUO student loans via the individual choice budget.
This means that staff will not have to pay income tax on the wages used to repay their student debt, saving thousands of euros on tax. According to RTL Nieuws, some large Dutch employers introducing the scheme this year include ProRail, ING, KPN, UWV, Schiphol and the government.
The total amount of tax savings depends on an employee’s income, tax bracket and the company’s limit on how much of the choice budget can be allocated to DUO loan repayments.
“Employees can sometimes earn back more than half of their student debt through the gross / net arrangement if they pay off debt for a number of consecutive years with the help of the choice budget,” CNV director Justine Feitsma told RTL Nieuws. An example given is that of a young civil servant called Jan who earns a gross monthly salary of 3.404 euros and has an individual choice budget of 16,5 percent of his annual salary.
By using 1.000 euros of his choice budget every year to pay off his 15.000 euro DUO loan, Jan will save around 530 euros in tax. If he does this for the entirety of the repayment period, he will see a total tax savings of 7.965 euros - more than half of what he owes.
With rising interest rates, many people who have completed their studies in the Netherlands find it increasingly difficult to repay their student loans. “This initiative offers young employees more financial breathing room and alleviates some of the mental stress tied to long-term debt,” said Feitsma.
The Dutch trade union CNV has advocated for such an arrangement for a long time, urging more employers to embrace similar benefits for their employees.“There aren’t many uses for the choice budget that deliver such significant savings,” said Feitsma.
While the benefit can easily earn workers more than half of their student debt in tax savings, some employers have also noted the benefits for themselves. “This program not only saves employees substantial money but also makes us a competitive employer, particularly for young graduates entering the workforce,” said Carlo Steenvoorden, HR director at KPN.
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