Taxes in the Netherlands
If you work in the Netherlands, taxes are an important part of your salary and financial life.
For most employees, Dutch taxes are relatively automatic. Your employer calculates payroll taxes and deducts them from your salary before paying your net wage. However, this does not mean you can completely ignore the tax system.
Understanding your payslip, tax credits, annual income statement and income-tax return can help you check whether you are paying the correct amount and whether you may be entitled to a tax refund.
This guide explains the main Dutch tax rules that employees and people moving to the Netherlands should understand.
Who Collects Taxes in the Netherlands?
The Dutch Tax Administration is called the Belastingdienst.
It is responsible for administering national taxes, including income tax and payroll taxes.
If you work for an employer, much of your income tax administration happens automatically through payroll.
Your employer reports your salary to the Belastingdienst and withholds the applicable payroll taxes before paying your salary.
That is why the amount arriving in your bank account is normally lower than the gross salary stated in your employment contract.
Gross Salary vs Net Salary
Two of the most important terms to understand are bruto and netto.
Bruto salaris means gross salary.
This is your salary before taxes and applicable deductions.
Netto salaris means net salary.
This is the amount remaining after payroll taxes and other applicable deductions have been taken from your gross salary.
For example, if your employment contract says you earn €3,000 gross per month, you should not expect €3,000 to arrive in your bank account.
Your actual net salary depends on factors such as your income, tax credits, pension arrangements and other deductions.
For more information about wages and payslips, see our Salaries & Expenses guide.
What Is Loonheffing?
Loonheffing is payroll tax.
When you are employed, your employer normally deducts payroll taxes directly from your wage.
This means employees usually do not have to manually transfer income tax to the Belastingdienst every month.
The deductions appear on your payslip.
At the end of the tax year, the amount already withheld is taken into account when your final income-tax position is calculated.
If too much tax was withheld, you may receive money back.
If too little was withheld, you may have to pay additional tax.
Dutch Income Tax – Box 1
The Dutch income-tax system separates different types of income into categories known as boxes.
For most employees, the most important is:
Box 1 – income from work and home
Box 1 can include income such as:
salary;
wages;
pension;
benefits;
freelance income;
business profits;
tips and other income;
certain foreign income;
income connected with an owner-occupied home.
For an ordinary employee, salary will normally be the main source of Box 1 income.
Income Tax Rates in 2026
For people who have not reached the Dutch AOW pension age, the 2026 Box 1 rates are:
Up to €38,883: 35.75%
€38,883 to €78,426: 37.56%
Above €78,426: 49.50%
These percentages include income tax and, where applicable, national insurance contributions.
The rates for people who have reached AOW pension age are different.
Does Earning More Put Your Entire Salary Into the Higher Tax Rate?
No.
The Netherlands uses progressive tax brackets.
If your income moves into a higher bracket, the higher percentage does not suddenly apply to your entire income.
Only the part of your taxable income that falls into the higher bracket is taxed at that rate.
For example, if part of your income falls into the first bracket and another part falls into the second bracket, those portions are taxed according to their respective rates.
This is important because people sometimes incorrectly assume that receiving a pay rise and entering a higher tax bracket means their whole salary will suddenly be taxed at the higher percentage.
It does not work that way.
Tax Rates Are Not the Same as the Percentage You Actually Lose From Your Salary
Looking only at the headline income-tax percentage does not tell you exactly how much net income you will receive.
Tax credits can reduce the amount of tax you actually pay.
Your individual situation can also affect the final calculation.
This is why simply taking your gross salary and subtracting 35.75%, for example, will usually not give you an accurate net salary.
What Are Tax Credits?
The Dutch term for a tax credit is heffingskorting.
Tax credits reduce the amount of tax you have to pay.
Two important credits for employees are:
Algemene heffingskorting — general tax credit
Arbeidskorting — employed person's tax credit
The amount you receive depends on factors such as your income and circumstances.
For 2026, the maximum general tax credit for someone below AOW age is €3,115. It starts decreasing once the relevant total income exceeds €29,736 and reaches zero at higher income levels.
The employed person's tax credit can reach a maximum of €5,685 in 2026 before being reduced at higher employment income levels.
You normally do not need to calculate these amounts yourself. The tax system and payroll administration calculate the applicable credits.
What Is Loonheffingskorting?
If you start working in the Netherlands, your employer may ask whether you want them to apply loonheffingskorting.
This allows applicable tax credits to be taken into account directly when calculating your salary.
If the credit is applied, less tax may be withheld from your salary, which can result in a higher monthly net wage.
There is one very important rule:
Apply loonheffingskorting to only one income at a time.
If you have two employers at the same time and both apply the tax credit, too little tax may be withheld.
You could then have to repay the difference after filing your income-tax return.
If You Have Two or More Jobs
Having several jobs is allowed, but you should pay particular attention to your taxes.
Imagine that you work for Employer A and Employer B at the same time.
You should normally have the loonheffingskorting applied to only one of those incomes.
Each employer sees the salary that it pays you. It does not automatically calculate payroll based on everything you earn from your other employers.
When your annual tax position is calculated, however, your income is considered together.
This is one reason why people with several jobs can sometimes receive an unexpected tax bill.
Check Your Payslip
Your loonstrook (payslip) contains important information about your salary and deductions.
Depending on the employer and payroll system, it may show:
gross salary;
hours worked;
hourly wage;
holiday allowance;
overtime;
allowances;
taxable wage;
payroll tax;
pension deductions;
other deductions;
whether loonheffingskorting is being applied;
net salary.
Do not look only at the amount deposited into your bank account.
Check your payslip regularly, particularly when you start a new job or your salary changes.
Your Jaaropgaaf
After the end of the calendar year, your employer provides an annual income statement called a jaaropgaaf.
If you leave your employer during the year, it may be provided earlier.
The jaaropgaaf contains important annual information such as your taxable wage and the payroll tax already withheld.
Keep this document.
You may need it when checking or completing your Dutch income-tax return.
If you worked for several employers during the year, you can receive a separate jaaropgaaf from each employer.
Do You Need to File a Dutch Tax Return?
A Dutch income-tax return is called an aangifte inkomstenbelasting.
Not everyone has exactly the same filing obligations.
If the Belastingdienst sends you a notification telling you to file a tax return, you should file it within the applicable deadline.
Even when you have not received an invitation, filing a return can sometimes be relevant if you have tax to pay or believe you are entitled to money back.
Your individual situation matters.
Why Might You Receive a Tax Refund?
You may have paid too much tax during the year.
This can happen in situations such as:
you worked for only part of the year;
you changed employers;
your income changed significantly;
too much payroll tax was withheld;
you are entitled to deductions or tax credits that were not fully reflected in payroll;
you moved to or from the Netherlands during the year.
A tax return calculates your final position using your income and circumstances for the relevant tax year.
If too much tax was already withheld, you may receive a refund.
A refund is not guaranteed simply because you worked only part of a year.
You May Also Have to Pay Extra Tax
A tax return does not always result in money back.
Sometimes it shows that you owe additional tax.
This may happen, for example, when:
too little payroll tax was withheld;
loonheffingskorting was incorrectly applied to several incomes;
you had several sources of income;
you received income that was not taxed sufficiently during the year;
your final circumstances differ from the information used for earlier calculations.
Therefore, do not assume that filing a tax return automatically means receiving a refund.
Filing Your Tax Return Online
Many people file their Dutch income-tax return online through Mijn Belastingdienst.
You will normally use your DigiD to log in.
A significant amount of information may already be pre-filled because employers, banks and other organisations report information to the Dutch authorities.
However, you should still check the information carefully.
Do not assume that pre-filled information is automatically complete or correct for your circumstances.
What Is DigiD?
DigiD is your Dutch digital identity for accessing government and public services online.
It is separate from your bank account and online-banking login.
DigiD can be used for services involving organisations such as:
Belastingdienst;
municipalities;
healthcare organisations;
pension services;
other government agencies.
Protect your DigiD login details carefully.
Never give another person your DigiD password or authentication code.
Moving to or From the Netherlands During the Year
Taxes can be more complicated if you move internationally during a tax year.
For example, you may have:
lived outside the Netherlands for part of the year;
moved to the Netherlands and started working;
left the Netherlands before the end of the year;
earned income in more than one country.
Your tax residency and the country where your income was earned can affect how your tax return is handled.
International tax treaties may also determine which country has the right to tax certain income.
Do not assume that you pay tax only according to your nationality.
Tax residency, where you live and where you work are much more important.
Foreign Income
If you live in the Netherlands but receive income from another country, special tax rules may apply.
Examples can include:
foreign salary;
foreign pension;
rental income;
investments;
foreign savings;
business income.
The Netherlands has tax treaties with many countries intended, among other things, to determine taxing rights and help prevent the same income from being taxed twice where treaty relief applies.
International tax situations can become complicated quickly, so professional tax advice may be useful if you have significant income or assets in more than one country.
Box 2 – Substantial Interest
Box 2 generally concerns income from a substantial interest in a company.
This is not relevant to most ordinary employees.
It can become relevant if you own a significant share of a company, including certain foreign companies.
If you are simply employed by a company and do not have such an ownership interest, Box 2 will usually not be the main part of your tax situation.
Box 3 – Savings and Investments
Box 3 concerns savings and investments.
The system is different from the tax applied to your salary.
For 2026, the Belastingdienst states that the Box 3 tax rate is 36% on the calculated taxable return.
There is also a tax-free asset allowance.
For 2026, the tax-free allowance is €59,357 per person.
This does not mean that everyone with €59,358 in a bank account suddenly pays 36% of their savings.
Box 3 has its own calculation system for taxable assets and returns.
If you have substantial savings, investments or other assets, check the current Box 3 rules carefully.
Foreign Savings and Investments
If you are a Dutch tax resident, foreign financial assets may also be relevant to your Dutch tax return.
Do not assume that money is irrelevant to Dutch taxation simply because it is held in a bank account outside the Netherlands.
Your exact obligations depend on your tax residency and circumstances.
This can be especially important for newcomers who still have savings, investments or property in their home country.
The Expat Scheme – 30% Facility
Some employees recruited from abroad may qualify for the Dutch Expat Scheme, commonly known as the 30% facility.
The scheme is intended to compensate eligible employees for additional costs associated with working outside their country of origin.
Under the scheme, an employer can, subject to the rules, pay up to 30% of qualifying remuneration as an untaxed allowance.
However, the scheme is not available to every foreign worker.
There are specific conditions.
Who Can Qualify for the Expat Scheme?
Among the conditions, you must generally be an employee recruited from outside the Netherlands and meet the expertise requirements.
For 2026, the standard salary threshold for the expertise requirement is more than:
€48,013 per year
A lower threshold of:
€36,497
applies in 2026 to certain employees under 30 with a qualifying Dutch academic master's degree or an equivalent foreign qualification.
Different rules can apply to certain scientific researchers and doctors training as specialists.
Another important condition generally concerns where you lived before starting work in the Netherlands. The scheme includes a requirement involving residence more than 150 kilometres from the Dutch border for the required period.
You and your employer normally apply together.
Meeting one condition alone does not automatically mean you qualify.
The 30% Facility Does Not Automatically Mean 30% of Every Salary Is Tax-Free
This is an important misunderstanding.
Even when someone qualifies for the Expat Scheme, the applicable salary requirements and other conditions still have to be respected.
Your employer is also not obliged to provide the full 30% tax-free allowance.
The actual amount can therefore be lower.
For 2026, the maximum untaxed allowance under the scheme is capped at €78,600 for someone using it for the whole year and with sufficient qualifying salary.
Social Insurance Contributions
Part of the Dutch tax system involves premies volksverzekeringen, or national insurance contributions.
For employees below AOW age, these contributions are incorporated into the first Box 1 tax rate.
They finance Dutch national insurance schemes.
Whether you are insured under the Dutch social-security system can become more complicated if you live or work across borders.
For example, special rules can apply when you:
live in another EU country but work in the Netherlands;
work in several countries;
are temporarily posted by a foreign employer;
remain covered by another country's social-security system.
Cross-border workers should check which country's social-security legislation applies to them.
Taxes and Your BSN
Your BSN (Burgerservicenummer) is your Dutch citizen service number.
It is used by the Dutch authorities to identify you for many administrative purposes, including taxes.
Your employer will need the necessary personal information for payroll administration.
Make sure your employer has your correct details.
Errors involving your identity, BSN or payroll information can create problems later.
Temporary Employment and Agency Workers
If you work through a Dutch employment agency (uitzendbureau), taxes are normally deducted from your wages through payroll just as they are for other employees.
Check your payslip carefully.
Agency workers may see several types of deductions or reservations on their payslips.
Not every deduction is a tax.
For example, depending on your arrangement, there may be separate amounts related to:
accommodation;
health insurance;
pension;
transport;
other agreed services.
Learn to distinguish these deductions from loonheffing.
If you do not understand a deduction, ask your employer or agency for an explanation.
Holiday Allowance and Tax
Employees in the Netherlands commonly receive vakantiegeld (holiday allowance).
Holiday allowance is taxable income.
Because payroll calculations for additional or special payments can look different from your normal monthly salary, you may notice a relatively large tax deduction on the payslip when holiday allowance or another bonus is paid.
That does not necessarily mean the payment is subject to a completely separate final income-tax system.
Your final annual tax position is based on your total taxable income and applicable rules.
See our Salaries & Expenses guide for more information about holiday allowance.
Keep Your Tax Documents
Keep important documents relating to your employment and taxes.
Useful records include:
employment contracts;
payslips;
jaaropgaven;
tax returns;
tax assessments;
letters from the Belastingdienst;
documentation relating to foreign income;
relevant bank and financial records.
Do not throw away your records immediately after receiving a refund.
They may be useful if questions arise later.
Watch Out for Fake Tax Messages
Criminals sometimes pretend to be the Belastingdienst.
Be cautious with unexpected emails, SMS messages or phone calls claiming that:
you owe tax immediately;
you will be fined unless you pay within hours;
you must click a payment link;
you need to provide banking passwords;
you must transfer money to an unfamiliar account.
Do not give anyone your DigiD password or banking authentication codes.
If you receive a suspicious message, visit the official Belastingdienst website yourself rather than using the link in the message.
Useful Dutch Tax Terms
Belastingdienst — Dutch Tax Administration
Belasting — Tax
Inkomstenbelasting — Income tax
Loonheffing — Payroll tax
Loonheffingskorting — Payroll tax credit
Algemene heffingskorting — General tax credit
Arbeidskorting — Employed person's tax credit
Aangifte inkomstenbelasting — Income-tax return
Belastingaangifte — Tax return
Belastingaanslag — Tax assessment
Jaaropgaaf — Annual income statement
Loonstrook — Payslip
Brutoloon — Gross wage
Nettoloon — Net wage
Aftrekpost — Tax deduction
Teruggave — Refund
BSN — Citizen service number
DigiD — Dutch digital identity
Tax Checklist for Employees
When you start working in the Netherlands:
Make sure your employer has your correct personal and BSN information.
Check whether loonheffingskorting is being applied.
If you have several jobs simultaneously, apply loonheffingskorting to only one income.
Check every payslip for your gross salary, taxes and other deductions.
Keep your payslips and employment contracts.
Save your jaaropgaaf from every employer.
Check messages from the Belastingdienst.
Determine whether you need to file an income-tax return.
Check whether filing could result in a refund if too much tax was withheld.
Declare relevant foreign income or assets when required.
Never share your DigiD or banking authentication details with someone claiming to arrange a tax refund for you.
Official Dutch Tax Information
For important tax decisions, use the official Dutch Tax Administration.
Belastingdienst – Income Tax Rates
Current Dutch income-tax brackets and rates.
Belastingdienst – Box 1
Official explanation of income from work and home and the applicable rates.
Belastingdienst – Expat Scheme (30% Facility)
Official information for people coming from abroad to work in the Netherlands.
Belastingdienst – Mijn Belastingdienst
Use the official Belastingdienst website to access your personal tax administration and file returns.
https://www.belastingdienst.nl/
Taxes in the Netherlands: What You Should Remember
For most employees, Dutch income tax is deducted automatically from salary. But understanding the system is still important.
Check your payslips, keep your annual income statements and make sure the payroll tax credit is not being applied to multiple jobs at the same time.
Remember that the Netherlands uses progressive tax brackets. Moving into a higher tax bracket does not mean your entire salary is taxed at the highest rate.
If you worked only part of the year, changed jobs or moved into or out of the Netherlands, filing an income-tax return may result in a refund—but it can also result in additional tax being due.
Foreign income, foreign assets and cross-border employment can make taxation considerably more complicated. If your situation involves several countries, substantial assets or business income, consider obtaining professional tax advice.
Tax rates and rules change regularly. Always check current information from the Belastingdienst before making important financial decisions.
Last reviewed: 2026. This guide provides general information and does not constitute individual tax or financial advice.