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Rate Box 1 (income from work and home)
The rate in Box 1 is a combination of tax and premiums social security. Premiums social security are calculated in the first bracket. On your payslip or year end statement you may see something like: “ingehouden loonheffing” or “LB/PR. VOLKSVZ” where LB stands for wage tax and PR. VOLKSVZ for premiums national insurance or premiums social security.
If you are not insured in the Netherlands but in the country where you were transfered from (based on a A1 declaration or Certificate of Coverage) then you don’t pay premiums social security in the Netherlands thus reducing the amount which is withheld from your salary of freelance income.
For the year 2021 the tax rate and premiums for income from work and home are:
Combined rates in Box 1 for persons younger than retirement age
|Taxable income||Tax per bracket||Premium National|
Insurance per bracket
|From||up to and including|
|€ 0||€ 35,129||9.45%||27.65%||37.10%|
|€ 35,130||€ 68,507||37.10%||0%||37.10%|
Total premium for the national insurance is 27.65% which is divided in:
- AOW (General Old-age Pensions Act ): 17.9%
- ANW (General Surviving Relatives Act): 0.1%
- Wlz (Act on long-term care): 9.65%
Rate Box 2 (income from a substantial interest in a limited company)
For the year 2021 the tax rate for income from a substantial interest is 26.90%.
Rate Box 3 (income from savings and investments)
The tax rate for income from savings and investments is increased to 31%. Expats with the 30% ruling can opt in the tax return to be exempted from taxation on savings and most of the investments.
After the tax has been calculated based on the above percentages you can reduce the calculated amount with the applicable tax credits.
- Personal tax credit (max for lower incomes) € 2,837
- Personal tax credit (max for incomes above € 68,507) € 0
- Personal tax credit for partner without income born after 1 January 1963 € 379
- Personal tax credit for partner without income born before 1 January 1963 € 2,837
- Labour tax credit (max for lower incomes) € 4,205
- Labour tax credit (max for incomes above € 68,507) € 0
If you have children additional tax credits can apply. There are also other specific tax credits depending on your situation but the above are the common tax credits.