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 2020 there will be 2 bands: a first band with a salary to € 68,507 and a second bad with a salary of € 68,508 or more. From a wage of € 34,713 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 2020, 2019, 2018 and 2017 on the webpage belastingdienst.nl/tabellen (only available in Dutch). For 2016 and 2015 you can download the wage tax tables (only available in Dutch).
For the wage tax/national insurance contributions there are these tables:
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 was made between 3 groups of employees in 2019:
- 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, starting on 1 January 2019, 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.
With effect from 2020, there will also be 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.