Income Tax/Wage Tax Withholding (“Loonheffing”)

If you are employed in the Netherlands, wage tax or income tax will be deducted from your salary. This is called “loonheffing” in Dutch. Wage taxes are deducted from your salary every month.

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Wage tax reduction

You are entitled to a tax reduction if you are employed. This can be requested through your employer. You then pay less wage tax and receive higher wages. However, this only applies to 1 employment contract. If you have multiple employment contracts, most employees request a wage tax reduction on their highest paid contract.

Wage tax/payroll tax and income tax

Wage tax/payroll tax is the tax you pay on your income when you work in the Netherlands. This tax is deducted from your gross salary and paid to the Tax Authorities (Belastingdienst) by your employer. So it is important to take this into account when talking about gross and net income.

If you earn money or are working in the Netherlands then you need to pay tax on your income. You declare your income tax via your annual tax return (aangifte inkomstenbelasting).

Income tax return

It is a requirement from the Tax authorities that your income tax is filed annually. Your tax information is already submitted by the payroll company or state authority, even if payroll tax has already been withheld from your gross salary.

The tax return is beneficial in balancing your “prepaid” tax with your other financial involvements such as: your partner’s income, savings or investments, extra income, your mortgage, tax deductions such as study or health care costs.

Dutch tax return

In the beginning of each year, the Tax Authorities will send you a letter asking you to complete a tax return for the previous year. The fiscal year runs from January 1 to December 31. The Dutch tax return does not apply to your situation if your financial affairs do not include any of the above elements.

Income outside the Netherlands

If you are also receiving income outside the Netherlands, it is important to mention this when completing your annual income tax return. This is to avoid double payments or deductions.

30% Facility

The 30% facility is a special tax benefit for expats. If you are eligible for this, you do not need to pay tax on 30% of your gross income. TOSS can tell you everything about this 30% ruling and how to apply for it.

Tax advice

Because of continuous changes in tax rules and regulations regarding taxes, we have close partnerships with professionals in this field. They have up-to-date knowledge and can advise you on all your tax matters such as income tax, 30% -ruling or shadow taxes.

TOSS would be happy to introduce you to them, so feel free to ask.

What clients say

Vivek – India – Developer
The moment I contacted TOSS in Holland I knew for sure that I had found an answer to all my questions. I needed assistance because I found a new job. They assisted me with the 30% ruling and set up the whole employment administrative obligations for me to be able to work for this company. In exactly 6 days all was taken care off by TOSS. Thank you!

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About TOSS

As The One Stop Shop, TOSS offers a wide range of services for expats and / or their employers in the field of living and working in the Netherlands with the aim of making every related process as smooth and effective as possible.

We have over 20 years of experience and we have carefully built up an extensive global network of specialists to serve you. All our team members are specialized and educated with all needed payroll certificates and our services meet the (inter)national standards.

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