Change in the Minimum Wage<\/i><\/p>\n
As of 1 January 2026, the minimum wage in Aruba will be set at AWG 11.58 gross per hour for employees aged 18 and over. This represents an important change, as the minimum wage will now be expressed as an hourly wage, bringing an end to the inequality of the previous calculation method, under which the minimum wage was effectively based on a weekly amount regardless of whether more than 40 hours were worked in that week.<\/p>\n
For the calculation of a monthly salary, the hourly wage is multiplied by the number of hours worked and by a factor of 4.333.<\/p>\n
Based on the new minimum hourly wage, the minimum monthly salary for a 40-hour workweek is calculated as follows:<\/p>\n
40 hours \u00d7 AWG 11.58 \u00d7 4.333 = AWG 2,007.05 gross per month<\/p>\n
In Celery, an hourly wage or a period wage can be entered per employee. In both cases, a minimum hourly wage of AWG 11.58 gross must be applied.<\/p>\n
Changes to the Regulation on the Fiscal Treatment of Fringe Benefits<\/i><\/p>\n
As of 1 January 2026, a substantially modernized Regulation on the Fiscal Treatment of Fringe Benefits will enter into force (see appendix). This regulation largely replaces the outdated provisions from 2003 and has direct consequences for payroll administration in Aruba.<\/p>\n
The revised regulation represents a fundamental modernization of the fiscal treatment of fringe benefits. Below, we outline the most important payroll-relevant changes.<\/p>\n
1. More Room for Tax-Free Reimbursement of Business Expenses<\/b><\/p>\n
One of the most significant innovations is the introduction of a general exemption for business expense reimbursements. Reimbursements and benefits are not considered taxable wage income if:<\/p>\n
This gives employers greater flexibility but also requires proper structuring of payroll records and internal expense categories. Without proper documentation, the exemption cannot be applied.<\/p>\n
2. Company Car: New Valuation Basis and Lower Add-On for Sustainable Vehicles<\/b><\/p>\n
From 2026 onwards, the taxable benefit for a company car will no longer be based on the new car purchase price, but on 15% of the book value as of 1 January, with a minimum of 50% of the acquisition value.<\/p>\n
In addition, lower percentages apply to energy-efficient vehicles:<\/p>\n
This results in a lower taxable benefit for older vehicles and provides a clear fiscal incentive for electric driving.<\/p>\n
3. Mileage Allowance for Private Cars Doubled<\/b><\/p>\n
The maximum tax-free mileage allowance for business travel using a private car increases from AWG 0.60 to AWG 1.20 per kilometer.<\/p>\n
Mileage related to commuting between home and work is explicitly classified as private use and therefore does not qualify for this tax-free allowance.<\/p>\n
4. Higher Fixed Allowances and New Telephone\/Internet Allowance<\/b><\/p>\n
The fixed monthly tax-free allowances for car and representation expenses have been significantly increased. Below is an overview of the old and new amounts:<\/p>\n
| Position<\/th>\n | Car Costs<\/th>\n | Representation<\/th>\n<\/tr>\n<\/thead>\n |
|---|---|---|
| Director<\/td>\n | 250 \u2192 350<\/td>\n | 250 \u2192 300<\/td>\n<\/tr>\n |
| Manager<\/td>\n | 200 \u2192 300<\/td>\n | 100 \u2192 150<\/td>\n<\/tr>\n |
| Sales<\/td>\n | 400 \u2192 500<\/td>\n | 100 \u2192 150<\/td>\n<\/tr>\n |
| Accountant \/ Advisor<\/td>\n | 300 \u2192 400<\/td>\n | 100 \u2192 150<\/td>\n<\/tr>\n |
| Other positions (business >25%)<\/td>\n | 200 \u2192 300<\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n In general, the previously established amounts have increased by approximately AWG 100 per month.<\/p>\n In addition, a new fixed allowance for telephone and internet expenses is introduced. Depending on the employee\u2019s position, this allowance ranges from AWG 100 to AWG 200 per month.<\/p>\n 5. Meals: Higher Taxable Benefit<\/b><\/p>\n The minimum taxable benefit for employer-provided meals is increased as follows:<\/p>\n
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