The income tax and payroll tax rate will change from January 1, 2025

ORANJESTAD - As of January 1, 2025, the income tax and payroll tax rate will change.

As is known, the same rate applies to income and payroll tax. This rate is of great importance to individuals, employers and traders who have their own business. The change includes a reduction of the current rate, which means that most taxpayers will pay less income tax and payroll tax in 2025. The working class in particular will notice that their employer will withhold less payroll tax in 2025 compared to 2024, which means that the employee will receive a higher salary.

The tax-free amount remains Afl. 30,000.

Considerations

The rate reduction has been approved by the government of Aruba to help as many people as possible, especially the most vulnerable in the community, namely the working class, to keep our economy stable.

The new income tax/wage tax table 2025

The new income tax/wage tax table 2025 looks as follows:

For a table income of more than the amount stated in column I, but not more than the amount stated in column II, the tax for the amount stated in column III, increased by the amount calculated by taking the percentage stated in column IV of the part of the table income that exceeds the amount stated in column I.

 With a table income of more than the
amount indicated in column I but not
more than the amount stated in column II
 		IS the tax for the amount indicated in column III, plus the amount calculated by taking the percentage indicated in column IV of the part of the table income that exceeds the amount indicated in column I.
 

I

II

III

IV

1

-

34.930

0.00

0,00%

2

34.930

63.904

0.00

21,00%

3

63.904

135.527

6.084.54

42,00%

4

135.527

-

36.166,20

52,00%

Explanation of the changes

Tax-free amountAfl. 30.000,00
Income brackets
  • Income brackets - For income bracket 1, the percentage mentioned in column IV is reduced to 0% (this was 10%).
  • For income bracket 2, there is no change.
  • For income bracket 3, the amount in column III is reduced to Afl. 6,084.54 (equivalent to Afl. 9,577.33).
  • For income bracket 4, the amount in column III is reduced to Afl. 36,166.20 (equivalent to Afl. 39,659.20).

The tax-free amount means that all private individuals or traders who have their own business (sole proprietorship) and a taxable income of up to Afl. 30,000 per year, do not pay income tax and payroll tax.

How is the tax calculated?

Here you can read how the tax amount is calculated.

  • Before the table is applied to calculate the tax amount, the tax-free amount of Afl. 30,000 must be deducted.
  • Finally, the calculated tax amount is rounded off.

Example:

Taxable income Afl. 78,864

Tax-free amount Afl. 30,000 -/-

Table income Afl. 48,864 see income bracket no. 2

Subtract the amount in column I (bracket 2) Afl. 34,930 -/-

Balance Afl. 13,934

Tax on Afl. 34,930 according to column III (income bracket 2) Afl. 0.00

Tax on Afl. 13,934 - 21% according to column IV Afl. 2,926.14

Total tax amount Afl. 2,926.14

Income tax or payroll tax payable Afl. 2,926 (per year)

You may use this Excel file to automatically calculate the tax amount. The file’s name is ‘Calculator inkomstenbelasting/loonbelasting 2025’.

It is important for everyone, and certainly for employers who have to prepare the payroll administration of their employees in 2025, to apply the new rate table income tax and payroll tax.