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. You calculate the wage tax and national insurance contributions for the wages in the 1st and 2nd tax brackets. These are subject to 1 combined rate. A lower percentage for the 1st and 2nd tax brackets is applicable to everyone who has reached the State old-age pension (AOW) age. You calculate solely the wage tax for the wages in the 3rd and 4th tax brackets: you do not calculate national insurance contributions for these tax brackets.
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 2018 and 2017 on the webpage belastingdienst.nl/tabellen (only available in Dutch). For 2016, 2015, 2014 and 2013 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. Tables for employees with or without holiday coupons are in turn available for each wage period.
Starting in 2019, the wage tax tables differentiate between three 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, 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.
You use the white or green table for the wage period for your employee, or the table for extraordinary remuneration enclosed after each white and green table.