Income tax

Paying taxes can be complicated. Here, we’ve summarized how income taxes work in the Netherlands.

Income Tax 3

Types of income tax

Generally, if you are employed by one employer in the Netherlands, your employer will take your income tax and national insurance directly out of your wage. We have a progressive tax system that starts at 36.97% and goes to 49.95%. To work out how much income tax you are likely to pay, you can use the Blue Umbrella calculator.

If you do not have a regular income, for example you are self-employed or employed by more than one employer, you must file a tax return. Our tax year runs from January 1st till December 31st. You’ll receive a request to fill out your tax return in February and it must be completed by May 1st (generally). 

There are three types of taxable income on a tax return

  1. Profits, employment (including pension) and home ownership - variable amounts starting at 36.97% up to 49.95%
  2. Income from substantial shareholdings - 5% minimum holding, 26.90%
  3. Taxable income from savings and investments - percentage of value

For expats, the Netherlands' 30% ruling may apply. However, as of 2024, this has been reduced to the 30/20/10% ruling, progressively reducing the full advantage over 5 years.

Tax credits

Everyone is entitled to a general tax credit and your employer will take this into account when deducting your wages. There is also ‘employed person tax credit’ which is dependent on your age and income, and single-parent tax credit. The latter you must take account of in your tax form, or apply for a rebate.

Tax partners

In partnerships - married couples and unmarried couples who have a child or own a home together - where both partners are working, they will be taxed individually. If only one partner is working, the working partner may apply for refunds of their general tax credit.