When must you withhold payroll taxes?

When you are not established in the Netherlands and you employ personnel who live or work in the Netherlands you must, in some situations withhold (some of the) payroll taxes in the Netherlands.

You withhold some payroll taxes from the employee's wage (wage tax and the national insurance contributions), bear the cost of some payroll taxes (the employed persons' insurance contributions) and withhold or bear the cost of some payroll taxes (the income-dependent contribution pursuant to the Health Care Insurance Act (Zvw)). The precise payroll taxes you must either withhold or pay for your account depends on a number of factors:

  • You withhold wage tax when your employee must pay income tax in the Netherlands and you are under the obligation to act as a withholding agent. Tax conventions determine whether your employee must pay income tax in the Netherlands. The Dutch legislation determines whether you are under the obligation to act as a withholding agent.
  • You withhold national insurance contributions when your employee falls under the social security insurance schemes in the Netherlands and you are under the obligation to act as a withholding agent. Social security regulations or conventions determine whether your employee falls under the social security insurance schemes of the Netherlands. The Dutch legislation determines whether you are under the obligation to act as a withholding agent.
  • You, as the employer, are required to bear the cost of the employed persons' insurance contributions and the employer's contribution pursuant to the Health Care Insurance Act (Zvw), and to withhold the contribution pursuant to the Health Care Insurance Act (Zvw) from the employee's wages. This is governed by only 1 criterion: your employee falls under the social security insurance schemes of the Netherlands. Social security conventions determine whether your employee falls under the social security insurance schemes of the Netherlands.

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