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Tax rate and tax brackets in the Netherlands - how is tax calculated?

Question:
 
I am considering applying for a job in the Netherlands. I have found the tax amounts for 2012 but it does not indicate that if you earn above 56,491 euros this is 52% on the whole amonut or part of a sliding scale as in the lower bands. In other words 22,033 euros for the year up to this amount and then 52% over this amount. Please could you clarify?

Answer:

The tax rates in the Netherlands are indeed progressive. The higher the salary, the higher the tax rate will be. By using tax brackets the tax rates are applicable in steps. Each bracket has its own rate. So if you are in the 52% tax bracket this doesn't mean that you pay 52% on your entire income, just over the part which falls in the 52% bracket. The average tax rate will therefore be lower than 52%. Tax deductions may transfer your income into a lower bracket, tax credits will reduce the calculated tax even further.

In the table on the linked page you will find a column with tax per bracket and a column with cumulative tax.

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Comments (8)
Comment by dorothy on Sun, Feb 3rd, 2013 at 9:17 AM
hi,i am considering a job that pays me 105,000 euro per annum in the it sector. my period of stay is most likely only a year.what kind of tax bracket will i fall under?
Comment by arjan enneman on Thu, Feb 7th, 2013 at 11:10 AM
your income will be taxed spread over the tax brackets. check the link for the applicable tax brackets and tax rates. there is no special tax bracket if you will be in the netherlands only for a short period. check if you qualify for the 30% ruling, see www.expatax.nl/30ruling. certain tax credits will be applicable which reduce tax. ask your employer to make a pro forma gross-net calculation.
Comment by Andy on Sat, Nov 23rd, 2013 at 4:17 AM
I am considering job 2250 per month what kind of tax bracket will I fall?
Comment by arjan enneman on Sun, Feb 2nd, 2014 at 12:10 AM
For 2014 the income up to 19,645 Eur is taxed at 36.25%. The difference between your salary and 19,645 Eur is taxed at 42%. The calculated tax will be reduced with the applicable tax credits.
Comment by laura on Tue, Mar 25th, 2014 at 3:36 PM
hi,i can not find how are calculated the tax credits (personal and labor). can you please explain it, in order to understand the impact on the tax calculation for a 7 months job?thanks
Comment by Arjan Enneman on Thu, Oct 15th, 2015 at 8:50 AM
The calculation of the tax credits can be complicated especially the labour tax credit. For 2015 the personal tax credit is between EUR 1,342 and EUR 2,203 for a full year. The labor tax credit is maximum EUR 2,220 for a full year. Both tax credits depend on the income.
Comment by Carolina Blanco on Mon, Jun 13th, 2016 at 3:34 PM
HI, I am looking to accept a job for 70K in the Netherlands, I was wondering what tax bracket I would be in? Also could i apply for the 30% rule since I was recruited?
Comment by Arjan Enneman on Wed, Aug 10th, 2016 at 7:04 PM
Your salary will be taxed spread out over the different tax brackets. In each bracket another rate will be applicable. You can find the 2016 tax rates on http://www.expatax.nl/tax-rates-2016.php. The calculated tax will be reduced with the applicable tax rates. If you were recruited from abroad then you can indeed qualify for the 30% ruling. This will reduce your taxable salary and thus lead to a lower tax amount.
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