Moving to the Netherlands for work: how your salary is taxed

How your salary is taxed

Dutch tax on salary is called box 1 tax. The rate in the first band includes national insurance contributions (state pension, survivors' benefits and long-term care), so there is no separate social security line on your payslip as in most countries. For someone below state pension age, the 2026 rates are:

Two tax credits then reduce the tax:

• General tax credit (algemene heffingskorting): up to €3,115, reduced as income rises above €29,736 and gone at €78,426.
• Labour tax credit (arbeidskorting): up to about €5,685 for people in work, reduced above €45,592 and gone at €132,920.

Because the credits shrink as you earn more, the real marginal rate on a middle salary is higher than the band rate: on €60,000 every extra €100 costs you about €50 in tax. Employee pension contributions are deducted before tax. Your employer also pays the income-related health contribution (Zvw) for you, so it does not come off your salary.

Worked example: €60,000 a year

Take-home pay at common salaries

Gross includes the 8% holiday allowance. Per month excludes it; it is paid once a year.

Your payslips and holiday allowance

Your employer withholds wage tax (loonheffing) every month and applies the tax credits for you. Only one employer or benefit provider at a time should apply the credits (loonheffingskorting); if you have two jobs, tell the second one not to, or you will owe tax when you file.

You are entitled to a holiday allowance (vakantiegeld) of at least 8% of your gross salary, paid at least once a year and often in May or June. Job offers are usually quoted as a monthly salary without it, so €5,000 a month means €60,000 a year plus €4,800 of holiday allowance. If you earn more than three times the minimum wage, your contract can set a lower allowance, so check it. Some employers also pay a 13th month, but that depends on your contract or collective agreement and is not required by law.

The 30% ruling

If a Dutch employer recruits you from abroad and you have expertise that is scarce in the Netherlands, your employer can pay up to 30% of your salary as a tax-free allowance for up to five years. In practice:

• In the 24 months before you started, you lived more than 150 km from the Dutch border for more than 16 months.
• Your taxable salary (after the allowance) must be at least €48,013 in 2026, or €36,497 if you are under 30 with a master's degree.
• Your employer applies together with you. Apply within four months of starting so the ruling counts from your first day.
• The allowance is worked out on salary up to €262,000, so it is at most €78,600 a year.

On €80,000 the ruling raises take-home pay from €53,913 to €66,112 a year, a gain of +€12,199.

Health insurance

Basic health insurance (basisverzekering) is compulsory once you live or work in the Netherlands. If you take it out within four months, the cover starts from the day you arrived and you pay the premium from then. If you wait longer, you are not covered for the gap and can be fined. The premium is on average €157 a month in 2026, paid by you directly to the insurer, and the first €385 of most care each year is your own excess (eigen risico). If you are single with an income below €40,857, you may get up to €1,550 a year of healthcare allowance (zorgtoeslag) towards the premium.

First steps after you arrive

1. Register with your municipality (BRP) within five days of arriving if you will live in the Netherlands for more than four months. You then receive your citizen service number (BSN), which you need for work, banking and health insurance. For shorter stays you can register as a non-resident (RNI) instead, which also gives you a BSN.
2. Take out basic health insurance within four months.
3. Apply for the 30% ruling with your employer within four months of starting, if you qualify.
4. Get a DigiD, the login you use for the tax authority and other government services.
5. Check your payslip: the tax credits should be applied by one employer only.

Your tax return

For the year you arrive you file a migration return (M form) instead of the normal return; it covers both the part of the year before and after you moved. It is filed the following year, by the date in the letter from the tax authority (for the 2025 M form this was 1 July 2026). From then on you file the normal online return, usually due by 1 May. Many employees with only a salary get a small refund or pay a little extra, because withholding cannot match the year exactly.

What changes in 2027

• Tax Plan 2027: under the proposal the first-band rate rises to 36.23% and the second to 38.16%, while the labour tax credit goes up. On €60,000 that changes take-home pay by +€128 a year. The lower house votes on 12 November 2026.
• 30% ruling: down to 27% unless your ruling started by the end of 2023.

Sources

• Belastingdienst: income tax rates
• Belastingdienst: Handboek Loonheffingen 2026 (30% ruling, section 19.4)
• Rijksoverheid: 30% ruling and the 2027 transition
• Government of the Netherlands: when to take out health insurance
• Rijksoverheid: average health insurance premium 2026
• Belastingdienst: healthcare allowance 2026
• Government of the Netherlands: registering with your municipality
• Rijksoverheid: holiday allowance
• Our methodology and the full list of sources for the calculator

Frequently asked questions

This guide explains the general rules for employees and is not personal tax advice. Rules change and individual situations differ, so check with the tax authority or a tax adviser before making decisions. Spotted something out of date? Email [email protected].