Global Employment Tax and Compliance Newsletter. November 2025

Welcome to the November 2025 edition of Acumen International’s Global Employment Tax & Compliance Newsletter.

November’s updates share a clear underlying pattern. Across several jurisdictions, governments finalised budgets that raise revenue by adjusting the mechanics of taxation and social-security rather than redesigning the systems themselves. Threshold freezes, new tax bands, revised credits, and higher wage floors are now doing most of the work.

For employers, this means that employment costs in 2026 will be shaped less by headline salary decisions and more by the interaction between tax progression, social-security settings, and minimum-wage policy.

The changes differ from country to country — a threshold freeze in the UK, new progressive bands in Slovakia, targeted credits in Canada, incentive shifts in Finland, updated allowances and VAT rules in Norway, but they operate in the same direction: gradual upward pressure on the cost of hiring and retaining staff.

Alongside the fiscal measures, November also brought developments in labour-mobility oversight. The OECD clarified remote-work permanent-establishment rules, and the EU advanced its 2026 agenda on posting and social-security digitalisation, signalling tighter alignment between tax, mobility and compliance data.

The sections below outline the measures adopted or confirmed this month and highlight where they may affect payroll, global mobility and workforce planning in the year ahead.

United Kingdom: Autumn Budget Brings Higher Employment Costs

The UK’s Autumn Budget, delivered on 26 November 2025, set out several changes that directly affect payroll, hiring costs, and workforce planning for 2026 and beyond. The government confirmed a further three-year freeze on income-tax and National Insurance thresholds, extending the current freeze to April 2031. As wages continue to rise, more employees will move into higher tax bands, increasing effective tax rates and reducing take-home pay across a broad segment of the workforce.

Minimum wage levels will also rise from April 2026. The National Living Wage will increase from £12.21 to £12.71 per hour, and the rate for workers aged 18 to 20 will rise from £10.00 to £10.85 per hour. This continues the trend of above-inflation adjustments and will lift baseline payroll costs for employers in retail, hospitality, logistics, and other sectors with younger or hourly workforces.

The budget further adjusts dividend, property, and savings-income taxation, which may influence remuneration strategies for senior staff, mobile employees, and individuals on split-income or incentive-based packages. Combined with the continued threshold freeze, these changes will shape net-pay outcomes for many UK-based employees in 2026.

For employers, the overall effect is a steady increase in wage and tax pressure. Compensation planning for the 2026–2027 cycle should factor in higher minimums, bracket creep from frozen thresholds, and the impact of broader personal-tax adjustments on both domestic and expatriate employees.

OECD: Updated Guidance on Permanent Establishment and Remote Work

On 19 November 2025, the OECD released updated commentary on Article 5 of the Model Tax Convention, clarifying when remote work from another country can create a permanent establishment for an employer. The update addresses situations where staff work from a home office or another private location outside the company’s control.

The OECD confirms that occasional or short-term remote work abroad will not create a fixed place of business. As a general indicator, remote work carried out abroad for less than half of an employee’s working time in a 12-month period will not meet the threshold for a permanent establishment. Even where the employee spends more time in that location, a PE arises only if the work done there serves a clear commercial purpose linked to the company’s business in that country.

For employers, the guidance helps narrow the risk around cross-border remote work requests. Companies can rely on the updated thresholds when assessing remote-work approvals, but will still need clear internal records of where employees work and why those arrangements exist as part of future tax-risk reviews.

European Union: Court of Justice Clarifies Limits of EU Role in Wage-Setting

The Court of Justice of the EU has ruled that the European Union cannot legislate on actual wage levels, including minimum wages. EU institutions may influence how Member States organise wage-setting frameworks, for example through collective bargaining requirements, but they cannot set or mandate specific pay amounts.

For employers with cross-border teams, this confirms that wage compliance remains entirely national. Minimum wage changes, wage-floor adjustments, and collective bargaining outcomes will continue to differ by country, and in some cases by sector. Countries revising their wage-setting frameworks in response to the ruling may see more frequent or more formalised wage updates, which directly affects cost-of-hire planning and payroll accuracy.

Compliance continues to depend on correct, country-specific treatment rather than any harmonised EU standard. Jurisdiction-level monitoring remains essential, especially in markets with active wage councils or expanding collective bargaining coverage.

Canada: Federal Budget 2025 – Key Tax Measures Affecting Employers and Mobile Staff

Canada released its 2025 federal budget on 4 November. Several measures affect globally mobile employees and the employers who structure compensation, relocation packages, and assignment costs. The most significant is the repeal of the Underused Housing Tax from the 2025 calendar year onward, removing filing and payment obligations for non-resident owners of vacant or underused residential property.

The budget also introduces a new Top-Up Tax Credit to address cases where the 2025 middle-class tax cut could otherwise increase an individual’s tax liability. For many employees, this will stabilise tax outcomes where large one-off deductions or credits are claimed.

A temporary tax credit for personal support workers is introduced from 2026, aimed at specific health-care roles. Other amendments streamline the interaction between the Home Accessibility Tax Credit and the Medical Expense Tax Credit to prevent duplicate claims, and the government has cancelled the previously proposed Canadian Entrepreneurs’ Incentive.

For employers managing inbound or outbound mobility, the main implications sit with the repeal of the housing tax, revisions to marginal tax rates, and the introduction of the Top-Up Tax Credit, all of which influence net compensation, hypothetical tax calculations, and the cost of tax equalisation policies.

Saudi Arabia: New Localisation Rules for Accounting Teams

Saudi Arabia brought new localisation rules for accounting roles into force on 27 October 2025. Companies with five or more accounting staff must now staff at least 40 percent of those positions with Saudi nationals. The government has also set clear wage floors for the profession: SAR 6,000 for bachelor’s degree holders and SAR 4,500 for diploma holders.

This is the first step in a five-year plan that will raise the localisation target to 70 percent. The Ministry of Human Resources and Social Development has issued guidance explaining how roles count toward the quota, how ratios are calculated for each establishment, and how compliance checks will run during the rollout.

Employers need to look at the makeup of their finance teams and confirm that job titles, headcount, and salary levels match the new rules. Organisations that depend heavily on expatriate accountants will feel the shift first, as future hiring and internal moves must support the phased increases that follow.

Finland: Proposal to Reduce Key Employee Withholding Tax to 25%

Finland has signalled a major change to its specialist-tax regime. In November, the government confirmed its intention to lower the key employee withholding rate from 32% to 25% as part of the 2026–2029 fiscal plan. The measure is designed to improve Finland’s position in the international talent market and to reduce compensation costs for employers hiring foreign specialists.

The proposal has completed consultation and is awaiting a government bill. If enacted, the reduced rate would apply both to new hires and to eligible specialists already working in Finland, including certain Finnish nationals returning after extended periods abroad.

For employers, the reform would widen the range of roles where the key employee regime offers a cost advantage and may influence salary planning for senior technical, research, and project-based roles. Companies relying on net-salary arrangements would see immediate savings once the new rate takes effect.

United Kingdom: New Rules for Work and Study Visas

The UK issued a new Statement of Changes on 14 October 2025, tightening several parts of its work-based immigration system. The most immediate shift is a higher English-language requirement for skilled workers from 8 January 2026, with applicants moving from B1 to B2 across all components. Individuals already in a route that required B1 can extend without meeting the new level.

The reforms also increase employer costs. The Immigration Skills Charge will rise by 32 percent, adding pressure to budgets for multi-country recruitment and ongoing sponsorship.

Several talent pathways expand at the same time. From 4 November 2025, the High Potential Individual route covers graduates from the world’s top 100 universities, subject to an annual cap. The Innovator Founder and Global Talent routes become easier to access for entrepreneurs, architects, and creative professionals.

Visitor rules tighten as well. Botswana nationals now need a visa to enter the UK, with a short grace period for individuals holding valid Electronic Travel Authorisations issued before the change.

Norway: 2026 Budget Proposals Affecting Employment and Mobility

Norway’s government presented its 2026 budget proposals. The package includes changes to personal allowances, National Insurance contributions, electric-vehicle VAT rules, and the date used to determine wealth-tax liability. These measures will influence net pay, mobility allowances, and year-end tax positions for internationally mobile staff.

The budget raises the personal allowance and adjusts income thresholds for bracket tax. National Insurance contribution rates fall slightly, which improves take-home pay for many employees. The VAT exemption threshold for electric vehicles is set to drop from NOK 500,000 to NOK 300,000, bringing more vehicles into the VAT net and affecting company-car costs.

A notable structural change is the proposal to set wealth-tax liability based on residency as of 31 December of the income year, rather than 1 January of the following year. This introduces new timing considerations for assignees, business owners, and year-end mobility planning.

Other measures include revised rules for securities funds, updated VAT treatment for cross-border services from 1 July 2026, restrictions on VAT loss recognition, and the phase-out of tax-free mergers into housing cooperatives.

European Union: Worker-Mobility Measures Planned for 2026

The European Commission set out its 2026 work programme, confirming that several reforms to cross-border labour mobility will be brought forward next year. The plan focuses on tightening cooperation between authorities, expanding digital tools, and improving how worker-mobility data is shared across the EU.

The Commission intends to give the European Labour Authority a stronger role in coordinating inspections, accessing posting data, and supporting enforcement where workers move between member states. In parallel, the Fair Mobility Package will introduce a digital Social Security Pass integrating A1 certificates and health-insurance proof, aimed at reducing paperwork for employers and simplifying checks at national level.

The central posting declaration (the “e-declaration”) is also progressing. Parliament has proposed widening the data captured and making the system compatible with national platforms, which would allow more member states to join. The overall direction is clear: mobility processes will become more digital, more connected, and more transparent for inspections.

For employers, these developments point toward earlier scrutiny of posting records, tighter alignment of HR data with social-security filings, and a gradual shift away from fragmented national processes.

Switzerland: Protection Status S Extended, New Rules for Seven Ukrainian Regions

Switzerland has confirmed that protection status S for people displaced from Ukraine will remain in place until at least 4 March 2027. The Federal Council decided in October that the security situation does not allow for a safe return, so the framework will stay active.

From 1 November 2025, a new rule will apply to new applications. The State Secretariat for Migration will distinguish between Ukrainian regions where returning is considered reasonable and those where it is not. Applicants from seven western regions (Volyn, Rivne, Lviv, Ternopil, Zakarpattia, Ivano-Frankivsk, and Chernivtsi) may no longer qualify for status S on the basis that return is possible.

This change does not affect individuals who already hold protection status S, nor their close family members still in Ukraine. Each new application will still be examined individually. If status S is refused but removal is not allowed or not reasonable, temporary admission may be granted instead.

Slovakia: Major Tax and Social Security Changes From 2026

Slovakia has confirmed a wide set of tax and social-security changes that will apply from January 2026. The measures increase health-insurance contributions, introduce new progressive income-tax bands, and raise minimum assessments for sole traders. Several rules that affect payroll, benefits, and employer obligations will tighten at the same time.

Employees will see higher health-insurance deductions, rising from 4 to 5 percent. New tax bands of 30 percent and 35 percent will apply to income above €60,349.21 and €75,010.32. The threshold for claiming the general tax allowance will fall slightly, reducing eligibility for some workers.

Sole traders will face higher minimum social-insurance bases, now calculated at 60 percent of the average wage instead of 50 percent, raising the minimum monthly payment to €303.11. Their exemption from social-insurance contributions will shorten to five months.

Other measures that affect employers include an extension of employer-paid sick-leave from 10 to 14 days, mandatory social-insurance contributions on income received during sick or maternity leave, and a three-day reduction of public holidays from November 2025. VAT on selected high-sugar and high-salt foods will rise to 23 percent, and the tax deduction for company cars used privately will be capped at 50 percent.

These changes will require updated payroll settings, revised budgeting for employer costs, and a review of benefits, compensation planning, and leave administration before the new year.

Launch of the Acumen Global Alliance

Acumen International has launched the Acumen Global Alliance (AGA), a partner network designed to help recruitment firms, HR consultancies, advisory practices and HR-technology providers support clients with compliant international hiring without developing their own multi-country employment infrastructure.

AGA gives partners access to Acumen’s global employment solutions, including Employer of Record services, immigration support, payroll and benefits administration, contractor-to-employee transitioning, workforce risk management, and the company’s tools such as the Global Payroll Calculator and Global Compliance Guide. These capabilities operate on Acumen’s existing framework covering more than 190 countries.

The alliance offers three routes to participation: sales, delivery and referral. This allows partners to integrate Acumen’s services under their own brand, contribute local delivery in their markets, or introduce opportunities directly. AGA follows a pilot phase with early partners across recruitment, mobility, consulting and HR-tech, which tested the model in real cross-border hiring scenarios.

See you in December as we close out 2025

We will continue tracking these developments as they move from announcements into day-to-day administration.

If you’d like to keep following how global tax, labour, and immigration rules evolve month by month, you can subscribe to this newsletter or follow us on LinkedIn.

We’ll be back next month with the final 2025 edition.