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Ask our Expat Desk: Dutch wage taxation

On October 11, 2012 by Dutch Umbrella Company

How will my pay be taxed?

I’m a Portugese national and have a job offer in Amsterdam starting next month. I have never worked in The Netherlands before and have no understanding of how my pay will be taxed or what social contributions I will have to pay. Before I ask my employer, can you help?

WePayPeople Expat Desk replies

First, great question.

Wage taxation in The Netherlands is progressive. This means that wages taxes and social contributions will be deducted from your gross pay at different percentages depending on your income level and age. Your employer will deduct these taxes and social security contributions and forward them to the Belastingdienst (Dutch tax authorities).

The 2012 total percentages (wage taxes plus social security contributions) for employees are as follows:

BandTaxable wagesYounger than 65 years65 years or older
1€ 0 – €18,94533.10%15.20%
2€18,946 – €33,86341.50%24.05%
3€33,864 – €56,49142.00%42.00%
4€56,492 or more52.00%52.00%

 

For example, if you are aged 25 years and have a gross pay of €40,000 per year, wage taxes and social contributions will be deducted at 33.10% on the first €18,945, 41.50% on the next €14,918 and 42.00% on the remaining €6,137.

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