What is the Netherlands Income Tax?
The Netherlands taxes employment income in box 1 using two bands: about 36.97% up to €75,518 and 49.5% above. Social security is bundled into the lower band rate.
Two large credits reduce the bill: the general tax credit and the labour tax credit, both of which taper away as income rises. The 30% ruling lets qualifying skilled migrants receive 30% of salary tax-free.
Formula & worked example
Net tax = Tax − general credit − labour credit
Worked example: a €70,000 salary produces about €25,879 of tax before credits. Credits of roughly €4,000 bring the net tax down, leaving monthly net pay near €4,000. With the 30% ruling, only €49,000 is taxable and net pay rises dramatically.
How to use this netherlands income tax calculator
- Enter your gross annual salary.
- Indicate whether the 8% holiday allowance is already included.
- Select the 30% ruling if you qualify as an incoming skilled migrant.
- Note the credits — they are large at moderate incomes and vanish at high ones.
Smart tips
- Dutch job offers often quote salary excluding the 8% holiday allowance — always check which figure you are given.
- The 30% ruling is now capped and time-limited; confirm current rules before relying on it.
- Mortgage interest on a main home is deductible in box 1, a significant benefit for Dutch homeowners.
- Pension contributions are typically deducted before tax through the employer scheme.
- Wealth is taxed separately in box 3 on a deemed-return basis, not on actual gains.
Frequently asked questions
What are Dutch income tax rates?
Roughly 36.97% on income up to €75,518 and 49.5% above, with social security included in the lower rate.
What is the 30% ruling?
A tax facility letting qualifying incoming skilled workers receive 30% of their salary free of income tax for a limited period.
What is the holiday allowance?
An extra 8% of annual salary, normally paid in May. Some quoted salaries include it and some do not.
What are the Dutch tax credits?
The general tax credit and the labour tax credit, both reducing tax directly and tapering away as income increases.
Want the theory behind the numbers? Read our European tax guides on the Money Blog.