Employee loans: look beyond payroll tax

When employers provide a loan to an employee, the first focus is often tax: taxable benefit, payroll withholding, employment tax treatment and arm’s length terms. That is important, but it is not the full picture.

On 23 June 2026, the Court of Appeal of The Hague held that a €50,000 loan granted by an employer to an employee at 7% interest qualified as consumer credit. The employer could not rely on the statutory exemption for employer loans, because the loan was not interest-free and the interest rate was not below the market level.

The consequences were material. Since the employer had not demonstrated that it had provided the required pre-contractual information and assessed the employee’s creditworthiness before granting the loan, the repayment claim was rejected.

Key takeaway: an employee loan is not just a tax matter. Employers should also consider civil law, employment law, consumer credit rules, loan documentation, salary deductions and evidence.

Nassau Tax & Global Mobility and its partners help employers carefully structure employee loans so that they are tax-compliant, legally sound, and practical to implement.

Source: Court of Appeal of The Hague, 23 June 2026, ECLI:NL:GHDHA:2026:1974.