3 tax brackets with generous tax credits (heffingskortingen)
The Netherlands has a deceptively high 35.75% starting rate from €0—because it bundles 27.65% social security. The hidden trap? Box 3 taxes fictional investment returns even when you actually lose money. Expats: the 30% ruling stays at 30% for 2026 but drops to 27% from 2027 (salary cap: €262,000). A €60,000 earner pays ~€14,500 after generous tax credits.
The Netherlands uses a progressive income tax system with three brackets for 2026, ranging from 35.75% to 49.5%. What makes Dutch taxes unique is the generous system of tax credits (heffingskortingen) that can reduce your tax bill by up to €8,800. The high starting rate of 35.75% includes approximately 27.65% in social security contributions bundled into Box 1. Expats may qualify for the 30% ruling, allowing 30% of salary to be received tax-free. Use our calculator below to estimate your Dutch tax liability, including the algemene heffingskorting (general tax credit) and arbeidskorting (employment tax credit).
| Taxable Income | Tax Rate |
|---|---|
| €0 - €38,883 | 35.75% |
| €38,883 - €78,426 | 37.56% |
| Over €78,426 | 49.5% |
Note: These are marginal rates - you only pay the higher rate on income within each bracket.
The Netherlands has 3 income tax brackets for 2026: 35.75% on income up to €38,883, 37.56% on income from €38,883 to €78,426, and 49.5% on income above €78,426. These rates apply to Box 1 income (employment and home ownership). The 35.75% starting rate includes approximately 27.65% in social security contributions (AOW state pension, WLZ long-term care, Anw survivors benefits).
The 30% ruling (30%-regeling) is a Dutch tax benefit for highly skilled expats recruited from abroad. It allows employers to pay 30% of an employee's salary tax-free as a reimbursement for extraterritorial costs. In 2026, the salary threshold is €48,013 taxable (€68,590 gross) or €36,497 taxable (€52,139 gross) for those under 30 with a master's degree. The ruling lasts up to 5 years and has a €262,000 salary cap.
The algemene heffingskorting (general tax credit) is a Dutch tax credit that reduces your tax liability. In 2026, the maximum is €3,115. It phases out for incomes above €29,736 at a rate of 6.4%, reaching zero at €78,426. Formula: €3,115 - (income above €29,736 × 6.4%). Combined with the arbeidskorting (employment tax credit of up to €5,685), employees can receive nearly €8,800 in tax credits.
The arbeidskorting (employment tax credit) has a complex calculation for 2026. It starts at €0 for income below €11,490, increases to a maximum of €5,685 for income between €37,697-€124,934, then phases out to €0 at €144,698. The exact formula varies by income band. For example, someone earning €60,000 receives the full €5,685 credit, reducing their effective tax rate significantly.
The deadline for filing your Dutch income tax return (aangifte inkomstenbelasting) is May 1, 2026 for the 2025 tax year. You can request an extension until September 1. Most Dutch residents receive a pre-filled return (vooraf ingevulde aangifte) from the Belastingdienst that includes wages, pensions, and benefits automatically.
Box 3 covers savings and investments. In 2026, assets above the €59,357 exemption per person (€118,714 for couples) are taxed at 36%. The Dutch tax system assumes a fictional return on your assets rather than taxing actual gains. This includes savings accounts, investment portfolios, crypto holdings, and second homes. The fictional return calculation was reformed in 2023 following court rulings.
Box 2 covers substantial interest income (aanmerkelijk belang) - typically dividends and capital gains from owning 5% or more of a company's shares. The 2026 rates are 24.5% on the first €68,843 and 31% above that threshold. This primarily affects business owners taking dividends from their own companies (BV structure).
No, in the Netherlands social security contributions are bundled into the Box 1 tax rate. The 35.75% first bracket includes approximately 27.65% in social contributions (AOW state pension at 17.9%, WLZ long-term care at 9.65%, and Anw survivors benefits at 0.1%). This is why the Dutch starting rate appears much higher than neighboring countries.
A €60,000 gross salary in the Netherlands pays approximately €14,500 in tax after tax credits. Breakdown: €13,894 tax on first bracket (€38,883 × 35.75%), €8,083 tax on remaining €21,117 (× 37.56%) = €21,977 total tax, minus €3,115 general credit and €5,685 employment credit = €13,177 net tax. Take-home: approximately €45,500 (75.8%).
Residents are taxed on worldwide income across all three boxes. Non-residents are only taxed on Dutch-source income (employment, real estate, substantial interest in Dutch companies). Expats with the 30% ruling can opt for partial non-resident status, meaning they're only taxed on 70% of their salary and can ignore foreign assets for Box 3. This partial non-resident option ends December 31, 2026.
Yes, mortgage interest (hypotheekrenteaftrek) for your primary residence is deductible in Box 1 at your highest marginal rate. For 2026, the maximum deduction rate is 36.93%. To qualify, you must repay the mortgage within 30 years using an annuity or linear scheme, and the mortgage must have been taken out after January 1, 2013 (or meet old rules for earlier mortgages).
If you work remotely for a Dutch employer while residing in the Netherlands, you're taxed as a Dutch resident on your worldwide income. If you live abroad but work remotely for a Dutch company, taxation depends on tax treaties - typically your country of residence has primary taxing rights. For digital nomads spending part of the year in NL, the 183-day rule usually applies to determine tax residency.
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