Calculating wage tax/national insurance contributions
The amount of wage tax/national insurance contributions you must withhold is based on the bracket rate for the wage tax/national insurance contributions.
In 2023 there will be 2 bands: a first band with a salary to € 73,031 and a second band with a salary of € 73,032 or more. From a wage of € 38,704 you only charge wage tax and no national insurance contributions. Employees who have reached the state pension age do not pay the state pension contribution, but do pay the surviving dependants and long-term care contributions.
With certain forms of wages you do not withhold wage tax/national insurance contributions from the employee's wages, as you bear the expense. This is what are referred to as the final levy.
Calculation instructions: when you make use of automated payroll records
When you make use of automated payroll records then you can use calculation instructions for the calculation of wage tax/national insurance contributions. When you use a software application your supplier will have incorporated these calculation instructions in the application. You can download the calculation instructions (only available in Dutch).
Tables: when you do not make use of automated payroll records
When you do not make use of automated payroll records then you can use calculation instructions for the calculation of wage tax/national insurance contributions. You can check the tables for 2023, 2022, 2021, 2020, 2019 and 2018 on the webpage belastingdienst.nl/tabellen (only available in Dutch).
For the wage tax/national insurance contributions there are these tables:
- white tables for wages from present employment and wages that are deemed to be equivalent
- green tables for wages from previous employment and benefits that are deemed to be equivalent
Consequently, you use the white or the green tables as determined by the category of wages. White and green tables are available for various wage periods.
In the wage tax tables a distinction is made between 3 groups of employees:
- employees who are residents of the Netherlands
- employees who are residents of close circle of countries, i.e. another EU Member State, an EEA country (Iceland, Norway and Liechtenstein), Switzerland or one of the BES-islands (Bonaire, Saint Eustatius and Saba)
- employees who are residents of a third country, i.e. a country that does not fall under 1 or 2 above.
The reason for this is that only Dutch residents will be entitled to the tax portion of the tax free allowance. Non-residents of the Netherlands will no longer be entitled to this. If such persons fall under social security insurance schemes in the Netherlands they will only be entitled to the contribution portion. There is an exception for one of the tax-free allowances, the employment allowance: employees who are residents of one of the close circle of countries are entitled to the tax portion of the employment allowance.
There are also separate wage tax tables for these two groups of employees:
- residents of Belgium
- residents of Aruba and Suriname
These employees are also entitled to the tax part of the general tax credit.
You use the white or green table for the wage period for your employee, or the table for extraordinary remuneration.