How Dutch payroll tax works
In the Netherlands your employer withholds loonheffing (payroll tax) every month. It combines income tax and national insurance contributions (for state pension, survivor benefits and long-term care) into one amount for people below state pension age. For most employees this withholding is close to the final tax bill, so the annual tax return mainly matters if you have deductions, savings above the tax-free allowance or other income.
For 2026 the combined rates in box 1 (income from work) are:
| Taxable income per year | Rate |
|---|---|
| up to €38,883 | 35.75% |
| €38,883 to €78,426 | 37.56% |
| above €78,426 | 49.50% |
Two tax credits then reduce the amount you pay. The general tax credit (algemene heffingskorting) is at most €3,115 and phases out as income rises above about €29,700. The labour tax credit (arbeidskorting) is for people in work, peaks at about €5,685 and phases out at higher incomes. Together they make the average tax rate much lower than the bracket rates suggest, especially on modest salaries.
How the calculator estimates your net pay
- Your gross monthly salary is multiplied by 12. If you choose to add holiday allowance, 8% is added on top (see below).
- We apply the 2026 brackets to this annual income and subtract the tax credits if you choose to apply them.
- The resulting average rate is applied to your monthly salary to estimate your monthly net pay.
Example: a gross salary of €4,000 a month plus 8% holiday allowance means an annual income of €51,840. After tax credits the estimated tax is about €11,790, an average rate of roughly 22.7%. Net pay is then about €3,090 a month, plus a net holiday allowance of roughly €2,970 in May or June.
To go from net to gross, choose net to gross; the calculator searches for the gross salary that produces the net amount you entered.
The 8% holiday allowance
Dutch employees are legally entitled to a holiday allowance (vakantiegeld) of at least 8% of their gross salary, usually paid once a year in May or June. Job offers often quote the monthly salary excluding this allowance, but some employers include it in an “all-in” package. Check your contract and use the holiday allowance calculator for the exact amount.
What this estimate does not include
- Pension contributions. Most Dutch employees pay into a pension fund through their employer. Contributions are deducted from gross pay and lower your taxable income; they can easily be 4–8% of salary.
- The 30% ruling. Eligible skilled migrants can receive part of their salary tax-free (currently 30%, being reduced in later years). This calculator does not apply it.
- Company car tax, allowances and benefits such as travel allowances. For tax-free business mileage see the mileage calculator.
- Healthcare insurance. Basic health insurance is mandatory and paid separately (roughly €150 a month in 2026), and an income-related contribution is paid by your employer. Low incomes may receive a healthcare allowance.
Use the result as a planning estimate, not as a payslip. Your employer’s payslip and the Belastingdienst are the authoritative sources.
Tips for expats
- Ask whether an offer is including or excluding holiday allowance and a 13th month.
- Compare offers on annual gross income including all fixed allowances.
- If you have a second job, only one employer should apply the tax credits. Select No for the second job in the calculator.
Frequently asked questions
What is a good salary in the Netherlands?
The median gross salary for full-time employees is roughly €45,000 to €50,000 a year. What feels comfortable depends heavily on the city: housing in Amsterdam and Utrecht is much more expensive than in most other regions.
How much tax do I pay on €5,000 gross per month in the Netherlands?
With 8% holiday allowance and tax credits applied, the average rate is roughly 28%, leaving a net monthly salary of about €3,585, before pension contributions.
Is the holiday allowance taxed?
Yes. It is taxed as a special payment, often at a higher withholding rate than your monthly salary, but the final tax over the year is the same.
Why is my payslip different from this estimate?
Payslips include pension contributions, the 30% ruling if applicable, allowances, benefits in kind and employer-specific deductions. The calculator only models salary, holiday allowance and the two main tax credits.
Does this calculator work for freelancers (ZZP)?
No. Self-employed people pay income tax through an annual return and have different deductions, such as the self-employed allowance. This tool is for employees.
Does it apply to people above state pension age?
No. People above Dutch state pension age (AOW) pay lower rates because they no longer pay the state pension contribution. The calculator assumes you are below that age.
Last reviewed: 2026-10-06. Results are estimates for information only.