In Netherlands, there are three categories (referred to as a "Box") where income is taxed differently.
On this page, currently we are only covering Box 1 as it includes majority of salaried employees.
Which income is covered in Box 1 in Netherlands?
This information is from
Belastingdienst.
Income that falls into Box 1 includes:
profit from business
salary, benefit or pension
tips and other income
foreign income
income as a freelancer, host, artist or professional sportsman
periodic payments (such as payments of an annuity or alimony)
negative personal deduction
refunded premiums for annuities and the like
owner-occupied home tax
capital home insurance
What age group does this income tax calculator cover?
All the calculations are made for people who have not yet reached the state pension age (66 years and 7 months) in 2022.
What is the 30% ruling in Netherlands?
From
Belastingdienst again, 30% ruling is provided a definition.
If you are coming to work in the Netherlands from another country you may experience higher cost of living
than you are used to, for instance, because living expense here are higher than in your country. If so,
your employer may compensate you for these so-called ‘extraterritorial costs’ untaxed.
Your employer may also choose to pay you 30% of your salary, extraterritorial costs included, tax-free. This is the 30% facility.
When do I qualify for 30% ruling?
You are in paid employment.
You have a specific expertise that is not or hardly found on the Dutch labour market.
You were recruited outside of the Netherlands.
You are in possession of a valid decision.
In 2022, your gross salary must also be higher than 39.467 €
How does the Payroll Tax Rate (without 30% ruling) work in Netherlands?
Without 30% ruling, your taxable income can be 50.000 € (without other deductions).
For 2022, upto 35.472 € of your gross income, it is taxed at 9,42%.
Upto 69.399 €, it is taxed at 37,07% and above that at 49,5%.
If you earned 50.000€ per year without 30% ruling, you would be taxed like this:
35.472 * (9,42 / 100) ≈ 3.341 €
Remaining 14.528 * (37,07 / 100) ≈ 5.385 €
You would pay a total of ≈ 8726 € as payroll tax.
How does the Payroll Tax Rate (with 30% ruling) work in Netherlands?
With 30% ruling, your taxable income can be 39.647 €.
For 2022, upto 35.472 € of your gross income, it is taxed at 9,42%. Upto 69.399 €, it is taxed at 37,07% and above that at 49,5%.
If you earned 50.000€ per year with 30% ruling, you would be taxed like this:
35.472 * (9,42 / 100) ≈ 3.341 €
Remaining 4.175 * (37,07 / 100) ≈ 1.547 €
You would pay a total of ≈ 4.888 € as payroll tax instead of ≈ 8726 € without the 30% ruling.
What is a General Tax Credit?
The general tax credit is the tax break on your taxable income. For a Taxable Income of 30.000 €,
the labour tax credit is ≈2.366 €. It is calculated as 2888 - 0.06007 * (30000 - 21318).
What is a Labour Tax Credit?
The labour tax credit is the tax credit you receive when you work. For a Taxable Income of 30.000 €,
the labour tax credit is ≈4.086 €. It is calculated as 3887 + 0.02610 * (30000 - 22357).
Is the 30% rule scrapped?
The Government recently announced (May 2022) that they are restricting the 30% rule benefit for a gross salary up to 216.000€.
Anyone who earns more will pay at the full tax rate.
Is this tool accurate?
As much as we aim to be accurate, some of the factors used to calculate cannot be a 100% match
to you as this may vary on personal factors. Please contact a Tax Consultant for accurate information.
