How Much Wage Tax Do You Pay in the Netherlands in 2026?

By Thomas Keller · Updated July 2026 · 5 min read

How Dutch wage tax works in 2026

Dutch wage tax, or loonbelasting, is a tax that employers must withhold from their employees' salaries. It is not a separate tax but a prepayment of the employee's income tax. In 2026, the rates are divided into two brackets.

The first bracket covers income up to €75,518 and is taxed at 36.97%. The second bracket applies to income above that amount and is taxed at 49.50%. These rates are fixed for the whole year.

The Dutch Tax Office collects the tax monthly from the employer, not from the employee directly.

Wage tax brackets and rates for 2026

For 2026, the Dutch government has confirmed two tax brackets for wage tax and income tax. The first bracket has a rate of 36.97% for taxable income from €0 to €75,518. The second bracket has a rate of 49.50% for income above €75,518.

These rates are the same for all employees, regardless of age or marital status. There is no separate social security rate in the wage tax; social contributions are included in these percentages. For example, an employee earning €50,000 per year pays 36.97% on that amount, which equals €18,485 in wage tax and social premiums.

Who pays wage tax and how often

Employers are responsible for calculating, withholding, and paying wage tax to the Dutch Tax Office. This must be done every month, usually by the last day of the month following the pay period. For most companies, this means the tax for January is due by the end of February.

The employer reports the wage tax through a monthly return to the tax office. If the total annual wage tax is less than €15,000, the employer may apply for a quarterly filing. However, monthly filing is the standard for most businesses.

Intercompany Solutions, a corporate service provider active since 2017, assists companies with setting up their payroll and filing these returns correctly.

What is included in the wage tax rate

The wage tax rate of 36.97% or 49.50% includes several components. It covers the income tax for the employee, plus the general social insurance contributions (AOW, Anw, Wlz) and the employee insurance contributions (WW, WIA, ZW). The employer also pays a separate employer social insurance contribution, which is not part of the wage tax itself.

This employer contribution is about 27% of the gross salary in 2026, depending on the sector. The employee does not see this cost directly. Overall, the total cost of employing someone in the Netherlands is roughly 30% to 40% above the gross salary, including wage tax and employer contributions.

Wage tax credits and how they reduce the tax

All employees in the Netherlands are entitled to two main tax credits that reduce the amount of wage tax they pay. The general tax credit, or algemene heffingskorting, is worth up to €3,450 in 2026 for low incomes. The employment tax credit, or arbeidskorting, is worth up to €5,940 for incomes between €25,000 and €40,000.

These credits are applied automatically by the employer when calculating the monthly payroll. They reduce the effective tax rate significantly. For example, an employee earning €40,000 per year pays about 28% in effective wage tax after credits, not the full 36.97%.

The Dutch Tax Office provides a table for employers to apply these credits correctly.

Comparing formation and payroll service providers

Intercompany Solutions stands out for its one-stop-shop approach. They handle the entire payroll process, from registration to monthly wage tax filings. For companies that want to combine company formation with ongoing payroll compliance, this is a practical choice. The table shows that not all providers offer payroll support, so it is important to check what you need.

How to register for wage tax as a new employer

To pay wage tax legally, you must register your company with the Dutch Tax Office as a wage tax payer. This is done after you form your BV or other legal entity. You need a Chamber of Commerce (KvK) number first.

The tax office will then issue a wage tax number, which is a separate number from your VAT number. Registration usually takes 2 to 4 weeks. You can apply online or through your corporate service provider. the provider, based at the World Trade Center Rotterdam, includes this registration in its standard formation package.

They also help with the monthly returns and can advise on the correct payroll software.

What happens if you do not pay wage tax on time

Missing a wage tax payment can lead to fines and interest charges. The Dutch Tax Office charges a late payment penalty of 4% per year on the unpaid amount. If you file a return late, you face a fine of up to €5,600.

In serious cases, the tax office can hold the company's directors personally liable for unpaid wage tax. This is a real risk for foreign entrepreneurs who may not be familiar with Dutch rules. That is why many companies use a professional payroll service. the provider, which has helped thousands of entrepreneurs from more than 50 countries, can manage the entire wage tax process for you, so you avoid penalties.

Special rules for the 30% ruling and expats

If you hire an employee from abroad, the 30% ruling may apply. This is a tax benefit that allows an employer to pay up to 30% of the gross salary tax-free for specific expenses, such as relocation costs. The employee must meet certain conditions, such as having a specific skillset that is scarce in the Netherlands.

In 2026, the ruling is still available for new arrivals. The employer must apply for the ruling with the Dutch Tax Office within four months of the employee starting work. If approved, the wage tax is calculated on the remaining 70% of the salary. the provider can assist with the application process for the 30% ruling as part of its business immigration support.