Irion says payroll error kept workers taxed at 47.5% for up to two years

GREAT BAY--Member of Parliament Ardwell Irion has written to Minister of Finance Marinka Gumbs and Minister of Justice Nathalie Tackling calling for the urgent correction of what he describes as a fiscal irregularity that has caused government employees to be taxed at an incorrect, higher rate for up to two years. In a letter dated January 19, 2026, Irion said complaints from civil servants, most of them from the Ministry of Justice, indicate that an administrative error linked to one-time lump sum payouts has had a significant financial impact on employees.

Irion explained that while a one-time lump sum payout classified as “Bijzondere Beloningen” (Special Remuneration) can trigger the top marginal tax rate of 47.5% for that payout, he said it is legally incorrect for the payroll system to continue applying the 47.5% rate to employees’ regular monthly salaries afterward. According to Irion, affected employees reported that after receiving a lump sum payout, wage tax on their regular salary was increased to 47.5% and remained at that level for as long as two years. He said that when employees contacted the Wages and Salaries Department, they were told the issue was being reviewed, but no correction was implemented.

As a former Minister of Finance, Irion said the payroll system appears to be calculating current wage tax based on an inflated “Fiscaal Jaarloon” (Fiscal Annual Wage) from the previous year, which he said is distorted by the one-time payment. He argued this reflects a misapplication of the ordinance because regular monthly salaries should be taxed using the periodic wage tax tables (Tijdvaktabellen), which are meant to reflect income earned in a given month and should not be driven by a past exceptional payout.

Irion called on the Ministers to instruct the Wages and Salaries Department to immediately return affected employees to the correct income tax bracket based on their current earnings. He also requested that government calculate the excess wage tax withheld and reimburse employees within a reasonable timeframe.

Irion further noted that government recently found a way to pay the Christmas bonus completely tax free, and he asked the Ministers to disclose the legal basis used for that exemption. He proposed applying a similar approach to the lump sum payouts for justice workers to ensure equal treatment.

The letter was copied to union leaders, including WICSU/PSU, NAPB, and ABVO.

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