How is your tax calculated?
Every rule this calculator applies, in plain language — including what we deliberately leave out.
The short version
net = gross − max(0, Box 1 tax − tax credits)
- We convert your income into one taxable annual income, including 8% holiday allowance.
- We compute the Box 1 tax on it using the brackets — that is income tax and national insurance contributions combined.
- We subtract your tax credits: the general tax credit and the labour tax credit.
- Credits reduce your tax to €0, but never below. What is left is your net income.
Your net income is almost always higher than your bracket percentage suggests, because tax credits come off the tax. Everything runs in your own browser — nothing is sent to a server.
Step 1 — From gross to taxable annual income
Dutch income tax looks at your whole year, not a single month. So whatever you enter, we first convert it into one taxable annual income:
| You enter | We compute |
|---|---|
| Per year | the amount itself |
| Per month | amount × 12 |
| Per hour | amount × hours per week × 52 weeks |
We use 52 weeks per year. Your holiday days are already inside your salary — you keep being paid while on holiday — so we do not subtract them. Your net hourly rate is therefore per contracted hour.
The “including 8% holiday allowance” checkbox
In the Netherlands you legally accrue 8% vakantiegeld (holiday allowance) on top of your salary, usually paid out once a year in May.
A quoted gross monthly salary almost always excludes it — it comes on top. But to the tax office holiday allowance is simply pay, so your taxable annual income always includes it.
- Unchecked (default): your amount excludes holiday allowance → we compute amount × 1.08.
- Checked: your amount already includes it → we take it as-is.
At €3,400 gross per month excluding holiday allowance, your taxable annual income is 3,400 × 12 × 1.08 = €44,064. Ignore the holiday allowance and you would land on €40,800 and the whole calculation would be off.
Skipping the holiday allowance understates your taxable income by a full 8%. That is not just less tax — it can also put you in a different bracket or a different part of the credit phase-out.
Step 2 — The Box 1 tax
What is Box 1?
Dutch income tax has three “boxes”. Box 1 covers work and home: salary, benefits, pension, business profit and the notional rental value of an owner-occupied home. For an employee, Box 1 is basically the whole story. Box 2 (substantial shareholdings) and Box 3 (savings and investments) are not included.
The rate is tax and contributions combined
This surprises almost everyone: the percentage in the tables below is not income tax alone. It is income tax + national insurance contributions (premie volksverzekeringen) added together. Those fund the state pension (AOW), survivor benefits (Anw) and long-term care (Wlz) — and they sit only in the first bracket.
How the first bracket is built up (2026)
| Component | Percentage |
|---|---|
| Income tax | 8.10% |
| AOW (state pension) | 17.90% |
| Anw (survivor benefits) | 0.10% |
| Wlz (long-term care) | 9.65% |
| Total bracket 1 | 35.75% |
This also explains why bracket 2 is only slightly above bracket 1: in bracket 2 the 27.65% of contributions drops away, but the tax component jumps sharply.
The brackets (below state-pension age)
2026
| Bracket | From | To | Rate |
|---|---|---|---|
| 1 | €0 | €38,883 | 35.75% |
| 2 | €38,883 | €78,426 | 37.56% |
| 3 | €78,426 | — | 49.50% |
2025
| Bracket | From | To | Rate |
|---|---|---|---|
| 1 | €0 | €38,441 | 35.82% |
| 2 | €38,441 | €76,817 | 37.48% |
| 3 | €76,817 | — | 49.50% |
Brackets stack — you never pay 49.5% on everything
This is the most stubborn myth about tax. If you reach the top bracket, you pay that top rate only on the part of your income above it. Worked out for a taxable annual income of €100,000:
| Slice of your income | Amount in this bracket | Rate | Tax |
|---|---|---|---|
| €0 – €38,883 | €38,883 | 35.75% | €13,900.67 |
| €38,883 – €78,426 | €39,543 | 37.56% | €14,852.35 |
| €78,426 – €100,000 | €21,574 | 49.50% | €10,679.13 |
| Tax before credits | €39,432.15 | ||
This exact breakdown is what you see in the calculator under “Why?”. And the tax credits still have to come off.
Step 3 — The tax credits
What is a tax credit here?
A heffingskorting is not a deduction. A deduction lowers your income; a tax credit comes straight off your tax. That is far more powerful: €1 of credit is €1 less tax, whatever your bracket. We apply the two that nearly every employee receives.
General tax credit (algemene heffingskorting)
Everyone liable for Dutch tax gets this. You need do nothing but have income. Above a certain income it phases out, and from the top of bracket 2 it is gone entirely.
2026 — maximum €3,115
| Taxable income | Credit |
|---|---|
| Up to €29,736 | €3,115 (maximum) |
| €29,736 – €78,426 | €3,115 − 6.398% × (taxable income − €29,736) |
| From €78,426 | €0 |
Labour tax credit (arbeidskorting)
You only get this on income from work. It is deliberately built so that working pays: it first builds up as you earn more, peaks around a full-time salary, and then phases out again. The build-up runs in three parts, with kink points where the pace changes.
2026 — maximum €5,685, reached at €45,592
| Taxable income | Credit |
|---|---|
| Up to €11,965 | 8.324% × taxable income |
| €11,965 – €25,845 | €996 + 31.009% × (taxable income − €11,965) |
| €25,845 – €45,592 | €5,300 + 1.950% × (taxable income − €25,845) |
| €45,592 – €132,920 | €5,685 − 6.510% × (taxable income − €45,592) |
| From €132,920 | €0 |
Why this changes everything
Add them up and it becomes clear. Anyone looking only at the bracket table overestimates their tax by roughly a factor of two. It is also why at lower incomes you part with almost nothing — see the next step.
Step 4 — The floor: credits never go below zero
The general and labour tax credits are non-refundable. They lower the tax you owe. If your credits exceed your tax, your tax becomes €0 and the remainder is simply lost. There is no negative tax and no payout. That is the max(0, …) in the formula.
€15,000 · 2026
| Tax before credits | €5,362.50 |
| General tax credit | €3,115.00 |
| Labour tax credit | €1,937.12 |
| Credits together | €5,052.12 |
| Tax after credits | €310.38 |
Go lower and you hit the floor: below roughly €11,360 of taxable income (2026) your credits exceed your tax and you pay €0. Your net equals your gross — and every extra euro you earn there is entirely yours.
Historically the general credit could be paid out to a lower-earning partner. That has been phased out and does not apply to a single earner, so we do not model it.
Effective vs marginal rate
The calculator shows two percentages. They measure very different things.
Effective rate — what you pay on average
Tax after credits ÷ gross. The share of your whole income that actually goes to tax. This is the number you want when asking “how much do I keep?”, and what we use for your net hourly rate.
Marginal rate — what your next euro costs
What happens to the very next euro you earn. This is the number you want when asking “is that raise, that extra day, that bonus worth it?”
Why your marginal rate can exceed your bracket
Earn more and two things happen at once: you pay the bracket rate on that extra euro, and you lose a slice of tax credit as it phases out. Those stack. The reverse is true too: while your labour credit is still building up, your marginal rate is far below your bracket.
How it runs across your income (2026, below state-pension age)
| Taxable income | Effective | Marginal |
|---|---|---|
| €10,000 | 0.0% | 0.0% |
| €15,000 | 2.1% | 4.7% |
| €22,000 | 2.9% | 4.7% |
| €27,000 | 4.5% | 33.8% |
| €32,000 | 9.5% | 40.2% |
| €40,000 | 15.7% | 42.0% |
| €50,000 | 21.7% | 50.5% |
| €60,000 | 26.5% | 50.5% |
| €80,000 | 32.6% | 56.0% |
| €100,000 | 37.3% | 56.0% |
| €140,000 | 42.3% | 49.5% |
- Between roughly €12,000 and €26,000 working is extremely rewarding: the labour credit builds up at 31% per euro, so you keep almost all of every extra gross euro.
- Between €78,426 and €132,920 sits the highest marginal burden of all — higher than on a multi-million income. That is purely the labour credit phasing out.
Considering more hours or a raise? Look at your marginal rate, not your effective one.
Worked examples
Taxable annual income (including holiday allowance), 2026, employee below state-pension age. These figures come straight from the same engine as the calculator.
| Gross | Tax before credits | General credit | Labour credit | Tax after credits | Net | Effective |
|---|---|---|---|---|---|---|
| €15,000 | €5,363 | €3,115 | €1,937 | €310 | €14,690 | 2.1% |
| €25,000 | €8,938 | €3,115 | €5,038 | €784 | €24,216 | 3.1% |
| €36,000 | €12,870 | €2,714 | €5,498 | €4,658 | €31,342 | 12.9% |
| €45,000 | €16,198 | €2,138 | €5,674 | €8,386 | €36,614 | 18.6% |
| €60,000 | €21,832 | €1,179 | €4,747 | €15,906 | €44,094 | 26.5% |
| €80,000 | €29,532 | €0 | €3,445 | €26,087 | €53,913 | 32.6% |
| €100,000 | €39,432 | €0 | €2,143 | €37,289 | €62,711 | 37.3% |
Notice how the effective rate sits far below the bracket rate — that is the tax credits at work.
What we do not include
Being straight about it: this is a good model, not a tax return. These are deliberately not included.
Situational tax credits
- Income-related combination credit (IACK) — for working parents with a child under 12. If you qualify, your real net is higher than what we show.
- Young disabled person's credit (jonggehandicaptenkorting).
- Elderly person's credit and the single-elderly supplement (from state-pension age).
Deductions
- Mortgage interest relief and the notional rental value of an owner-occupied home.
- Study costs, charitable gifts, specific healthcare costs, partner alimony.
- Entrepreneur's allowance, self-employed deduction, SME profit exemption.
- Travel-expense and other untaxed reimbursements.
What your employer still withholds
- Pension contributions — your own share comes off your gross pay before tax is computed. If you are in a scheme, your truly disposable pay is lower than what we show. It varies per scheme, so we cannot model it generically.
- The Zvw health-insurance contribution is paid by your employer on top of your gross; your own premium to your insurer is separate and is not tax.
- Unemployment and disability insurance (WW, WIA) are paid by the employer.
Special situations
- The 30% ruling for incoming employees from abroad.
- Fiscal partnership and allocating deductions between partners.
- Company-car benefit-in-kind (bijtelling), which raises taxable pay.
- Box 2 and Box 3, and those born before 1 January 1946 (a slightly wider first bracket).
- State-pension age: this tool is built for an employee below AOW-leeftijd.
Benefits (toeslagen) — important on a lower income
Healthcare, rent, childcare and child-related allowances are income support rather than tax, so they are not included here. At lower incomes they can raise your disposable income substantially — often by hundreds of euros a month. If this calculator shows you keeping very little, check whether you are entitled to them.
Check your benefits at toeslagen.nl ↗And most importantly: this is your annual assessment, not your payslip
What your employer withholds each month is loonheffing — an advance payment on your final income-tax assessment. Your employer only knows what they pay you; the tax office looks at your whole picture at year-end. This tool computes that annual assessment, which is what you actually part with over a full year. A single payslip can therefore look different.
Glossary
| Term | What it means |
|---|---|
| Gross (bruto) | Your pay before tax. What your contract or the job ad states. |
| Net (netto) | What is left after tax comes off. |
| Box 1 | The tax box for work and home: salary, benefits, pension, profit, owner-occupied home. |
| Premie volksverzekeringen | Mandatory contributions to AOW, Anw and Wlz. Inside the bracket rate, first bracket only. |
| Heffingskorting | An amount taken straight off your tax (not off your income). |
| Afbouw (phase-out) | A credit gradually disappearing as you earn more. |
| Knikpunt (kink point) | An income threshold where a credit's build-up or phase-out pace changes. |
| Vakantiegeld | A statutory 8% of gross pay, usually paid in May. Counts as taxable pay. |
| AOW-leeftijd | State-pension age. From then on you no longer pay the AOW contribution. |
| Aanslag | The final annual settlement with the tax office. |
| Loonheffing | What your employer withholds monthly. An advance on the assessment. |
| Effective rate | Tax ÷ gross. What you pay on average across your whole income. |
| Marginal rate | What you pay on the next euro earned. |
| Verzamelinkomen | Your income from Box 1 + 2 + 3 combined. Basis for the general credit. |
| Arbeidsinkomen | Your income from work. Basis for the labour credit. |
For an employee with only wage income, verzamelinkomen, arbeidsinkomen and taxable Box 1 pay are the same figure. That is why one input field is enough.
Frequently asked questions
Why does this differ from my payslip?
Three reasons, usually all at once. (1) We compute your annual assessment; your payslip shows the monthly loonheffing, an advance. (2) We spread your holiday allowance evenly across 12 months; you probably receive it in one go in May. (3) We do not include pension contributions, which do come off your gross. For most people reason 3 makes the amount in their bank account lower than our “net per month”.
Is holiday allowance included?
Yes. To the tax office it is simply pay, so it is always in your taxable annual income. Tick the checkbox if your amount already includes it, untick it if it comes on top — with a monthly salary the latter is almost always the case.
Why does my labour credit fall when I earn more?
That is deliberate policy: the labour credit exists to make work pay for lower and middle incomes. Above the maximum it phases out at 6.510% of every extra euro. You are still better off in net terms — you just keep less of the increase.
Why is my marginal rate above 49.5%?
Because the bracket rate and your credit phase-out add together. Between €78,426 and €132,920 you pay 49.5% tax and lose 6.510% of labour credit per extra euro. Above €132,920 the labour credit is gone and your marginal rate falls back to 49.5%.
I earn little and you say I pay €0 tax. Is that right?
Yes. Below roughly €11,360 of taxable income (2026) your tax credits exceed your tax, so your tax becomes €0. Any leftover credit is not paid out — it lapses. In that case, also check whether you qualify for toeslagen.
Why can't I enter a partner, children or a mortgage?
Because we deliberately do one thing well. Every extra variable makes the calculation less predictable and the input heavier. If you have such a situation, your real net is usually higher than what we show. Use the Belastingdienst's own tool for an exact figure.
Which tax year should I pick?
2026 for what you earn now. 2025 if you are looking back, for example for your tax return. Rates and credits differ per year.
What exactly is my net hourly rate?
Your net annual income divided by your contracted hours per year (hours per week × 52). At 40 hours that is 2,080 hours. Your paid holiday is already inside your annual pay.
Where does my data go?
Nowhere. Everything is computed in your browser. Your input is stored only locally on your device so you do not have to retype it. No number is sent to a server, and there is no tracking.
Sources
All rates, brackets and credit formulas come from the Belastingdienst. The calculator uses exactly the same numbers as this page.
This is an indicative calculation and not tax advice. Consult the Belastingdienst or a tax adviser for your personal situation.
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