Knowledge Base

Welcome to the Expatax Knowledge Base containing hundreds of answers to questions we received about topics concerning tax, payroll, accounting, legal, business etc. related to the Netherlands. Search in our Knowledge Base or browse the different categories. Expatax is a Dutch tax and accounting firm specialized in assisting international workers, freelancers and companies. Don't hesitate to contact us if you need assistance or check our website.

I am made redundant and receive a lumpsum payment. What are the tax options?

Unfortunately a lot of people are made redundant. Most of the times you will be able to arrange a redundancy package. The amount mainly depends on the time you worked for the company.

Of course there are tax consequences.

When you get a redundancy package you could choose out of three options:

  1. Payment in one lumpsum to your bankaccount
  2. Income insurance from an insurance company or bank (no longer possible from 1 January 2014)
  3. Income insurance from your own limited company, called Stamrecht BV (no longer possible from 1 January 2014)

As you can see option 2 and option 3 are no longer possible for new redundancies since 1 January 2014. Existing income insurances and stamrecht BV's remain approved. But new ones will be refused.

1. Payment in one lumpsum to your bankaccount

Normally when you are made redundant the employer will pay the redundancy package in one amount. The employer can also decide to pay you in monthly terms combined with a social security payment from the government but we will not discuss this further.

The lumpsum will be normally taxed. So this means that the whole amount will be taxed together with your other income during the year. The higher the income and lumpsum the sooner you will be in the highest tax scale of 52%. When normally your salary isn't taxed against 52% the lumpsum leads to a higher average taxation. It may be possible to use the so called average income ruling ("middelingsregeling") to reduce taxation. This way income is spread out over 3 years and tax is calculated based in the same average income in these years. The tax caluclated this way is compared to the tax you have paid now and the difference is paid back (if this is more than € 545).

Please be advised that you won't get the 30% ruling on the redundancy package.

Attached Files
There are no attachments for this article.
Comments (2)
Comment by John Buckley on Tue, Oct 14th, 2014 at 11:41 AM
The income insurance options are no longer possible, according to my financial and tax advisers.
Comment by Arjan Enneman on Wed, Jan 21st, 2015 at 11:26 PM
The income insurance and the stamrecht BV options are indeed no longer possible since 1 January 2014.
Security Code Security Code
Related Articles RSS Feed
Travel calendar 2013: claim a tax exemption for foreign workdays
Viewed 8134 times since Thu, Jan 9, 2014
Taxation of spouse alimony
Viewed 1497 times since Fri, Aug 30, 2013
Writing yourself off the Dutch system
Viewed 2285 times since Thu, Aug 7, 2014
I live in Germany and have a bank saving account in the Netherlands. Am I subjected to pay tax?
Viewed 1292 times since Fri, Aug 8, 2014
Do I get a tax refund if I have worked outside the Netherlands part of the year?
Viewed 1889 times since Thu, Oct 18, 2012
Tax return for non resident working as freelancer for a Dutch company, mostly outside NL
Viewed 5759 times since Thu, Nov 8, 2012
Can I open a savings account for my child and will he pay tax on the interest ?
Viewed 9921 times since Wed, Mar 21, 2012
Protective assessment upon emigration from the Netherlands - why did I get one?
Viewed 19075 times since Tue, Nov 13, 2012
Leaving the Netherlands
Viewed 1041 times since Mon, Oct 20, 2014