Pseudo-final levy on fossil fuel lease cars from 2027

Pseudo-final levy

From January 1, 2027, the Netherlands will introduce an extra tax on lease cars that are not emission free: the pseudo-final levy. The government wants to encourage employers to offer only electric cars or other sustainable options, such as traveling by public transport.

02 Apr 2026

Mark Sloothaak, Mobiliteitsadviseur

NS Zakelijk

What is the pseudo-final levy?

The pseudo-final levy is an additional tax for employers on lease cars that are not fully emission-free. This applies to petrol, diesel and hybrid cars. Company cars that employees use privately or for commuting also fall under the pseudo-final levy.

You pay a 12 per cent levy on the catalogue price if the car is less than 25 years old. If the car is older, you pay 12 per cent on its market value. The levy is calculated monthly and is usually paid through payroll tax, often in arrears. Even if an employee uses the car for just one day a week, you must pay the levy for the entire month. You are not allowed to pass these costs on to your employee.

500-kilometre threshold and additional tax: what you need to know

The 500-kilometre threshold that applies to additional tax for private use does not apply to the pseudo-final levy. The levy always applies, regardless of how many private kilometres are driven.

The pseudo-final levy is separate from the additional tax for employees. Additional tax affects the employee’s income, while the pseudo-final levy is a tax for the employer.

Is the pseudo-final levy definitive?

The pseudo-final levy is definitive and is part of the Tax Plan 2026/2027. Because details may change, it is wise to check the Dutch Tax and Customs Administration website for the latest information.

Is there a transition scheme for the pseudo-final levy?

There is a transitional arrangement in place until 17 September 2030. Cars that your employees were already allowed to use privately before 1 January 2027 generally do not fall under the pseudo-levy until 17 September 2030. This only changes if your employee switches to a different car or employer, or if the car is assigned to another employee.

What does the pseudo-final levy mean for employers?

If you offer lease cars that are not fully emission-free, or have company cars that employees also use privately or for commuting, you will face these strategic challenges:

Higher costs: it will become much more expensive to offer non-emission-free lease cars. From 2027, you pay extra tax on these cars. This increases your organisation’s total mobility costs.
Faster transition to sustainable mobility: the measure encourages you to green your fleet and offer other transport options besides lease cars.
More focus on HR and mobility policies: you pay more attention to encouraging sustainable commuting and business travel, for example by using public transport.

It is wise to review your mobility policy or way of business travel now and consider change.

Is public transport an alternative to the lease car?

Public transport is a strong alternative to non-emission-free lease cars. Offering your employees the train or other public transport reduces your dependence on those lease cars. This also lowers your costs. You only pay for the trips employees actually make. If someone works from home or is off, you pay nothing. That is different from lease cars, where fixed lease costs and depreciation continue.

Besides, it shows that your organisation takes sustainability seriously. This is positive for your image and makes you more attractive for new talent. For example, all NS trains run on green electricity.

Of course, you can also replace fossil lease cars with electric lease cars. But even then you face higher additional tax and a fiscal benefit that keeps shrinking. Want to know more? Then read our article about this.

NS-Business Card: flexible travel and administrative convenience

With the NS-Business Card, you make public transport travel easy for your employees and yourself. Employees travel by train, bus, tram, and metro throughout the Netherlands. If you choose shared transport such as the OV-fiets, that works as well with this card. As an employer, you get one monthly VAT invoice, so no separate receipts or expense claims anymore. The card is free and employees do not have to load balance.

With handy reports you keep insight into travel behavior and costs. That way you stay in control and your employees benefit from comfortable and sustainable travel.

Discover NS-Business Card

How to handle the pseudo-final levy well

The pseudo-final levy calls for a smart approach to mobility. Replace non-emission-free lease cars with electric ones or make it easy for employees to travel by public transport. The NS-Business Card helps you with this. That way, you keep costs and tax pressure under control and contribute to a more sustainable future.

Frequently Asked Questions about pseudo-final levy

What is the pseudo-final levy?

From 1 January 2027, employers will pay an additional tax on lease cars that are not fully emission-free. This is called the pseudo-final levy. It applies to petrol, diesel and hybrid cars. Company cars that employees use privately or for commuting also fall under this levy.

If the car is less than 25 years old, you pay 12 per cent of the catalogue price as the levy. For cars older than 25 years, you pay 12 per cent of the market value.

This tax is calculated monthly. You usually pay it afterwards through the wage tax, and you are not allowed to pass the cost on to your employees.

How does the pseudo final levy work?

From 1 January 2027, the pseudo-final levy applies if you, as an employer, provide a petrol, diesel or hybrid car to your employee.

How does this levy work?

From 1 January 2027, you provide a lease car to your employee.
The car may be used for private trips, but also for commuting. For the pseudo-final levy, commuting always counts as private use. The well-known 500-kilometre limit does not apply here.
The pseudo-final levy only applies if the car is not completely emission-free. So, electric or hydrogen cars are excluded. Private or commuting use must be present.
As an employer, you pay 12 percent per year of:
- the catalogue value if the car is younger than 25 years;
- or the market value if the car is older than 25 years.
- That comes down to about 1 percent per month. Note: even if your employee uses the car for only one day in a month, you pay for the whole month.
You declare and pay the levy through wage tax, usually afterwards. You may not pass these costs on to your employee.
Your employee pays the regular additional tax. Your pseudo-final levy as employer is on top of this. These are two separate tax rules that exist side by side.

Is there a transitional arrangement for the pseudo-final levy?

You have a transitional arrangement until 17 September 2030. Cars that your employees were allowed to use privately before 1 January 2027 generally do not fall under the pseudo-levy until that date. However, if your employee changes employer or car, or if the car is assigned to another employee, the situation may be different.

Who pays the pseudo-final levy?

You, as the employer, are responsible for paying the pseudo-final levy. You declare and pay this levy through the payroll tax, usually afterwards. You are not allowed to pass these costs on to your employee.

How is the pseudo-final levy calculated?

The pseudo-final levy is calculated as follows:

Determine the value of the car

If the car is 25 years old or younger, use the list price including VAT and BPM. If the car is older than 25 years, use the market value, also known as the value in economic traffic.

Apply the rate

The rate is 12 per cent per year, which equals 1 per cent per month.

Count per month

The levy is calculated per pay period, usually monthly. If your employee uses the car for even one day in the month, the entire month counts. This applies regardless of whether the journey was private or commuting.

Who pays the levy?

The pseudo-final levy is a final tax in the payroll tax and is paid by you as the employer. You are not permitted to pass these costs on to the employee.

Example calculation

Suppose you have a car with a list price of € 50,000.

Year: € 50,000 × 12 per cent = € 6,000
Month: € 50,000 × 1 per cent = € 500 per month

This amount is in addition to other costs such as lease fees, fuel or charging, and the additional taxable income for the employee.

Is electric driving an alternative to the pseudo-final levy?

Yes, you can replace non-zero-emission lease cars with electric lease cars. However, these cars are subject to a higher additional taxable income and a tax advantage that is gradually decreasing. Would you like to know more? Read our article about this.

Is public transport an alternative to the lease car?

Yes, public transport is a good alternative to non-zero-emission lease cars. You only pay for the journeys your employees actually make. Alternatively, you can choose a subscription that allows your employees unlimited travel for a fixed monthly fee. As an employer, you avoid lease costs, depreciation, fuel, and the pseudo-final levy. Your employee also has no additional taxable income. This significantly reduces costs and is sustainable.