Read up on how the following topics are relevant for taxation, fellowships and salaries.
Understanding your payslip
Your employer must provide you with a pay slip which provides you with information about your salary. This includes information on how your wage is calculated and the amounts that have been withheld. The employer must provide this information when you receive your first salary. After your first salary you will receive a payslip each time something changes in your salary. Most employers provide online pays slip information in which you can see and download your pay slips continuously.
Information on the payslip
- It starts with your personal details in the top section.
- Periode- This is the time period over which you have received a salary
- Salaris / uurloon / periode / maand /year - This is you gross salary per hour / month /period /year (pre-tax)
- Bijz. tarief / heffingskorting (ja) – This is the special tax rate (for bonuses) and an indication if you received a general tax credit (indicated by yes)
- Verzekerd voor WW, WiA, ZW, Zvw - This indicates whether you are covered for or contribute to social security
- Datum in dienst - This is the date you entered your current employment
- Burgerservicenummer (BSN) - Your Dutch citizen registration number
- Functieomschrijving - This is your job description or job title
- (Normale) gewerkt uren - This indicate the number of your regular working hours
- Brutoloon / Belastbaar loon / Loon / Loon voor de loonheffing- This is your taxable wage/salary
- Pensioengevend loon - This is your salary for pension purposes
- Loonheffing - This is the amount that was deducted for wage tax AND social security contributions
- Sociale verzekeringen (SV) - These are the social security contributions
- Reiskostenvergoeding - This is the amount to compensate transport and/ or commuting expenses
- Nettoloon - This is your nett salary after tax, deductions and refunds, this is what will be paid into your bank account.
- Cumulatief – Your cumulated salary over the months of the year
- (Opgebouwd) vakantiegeld - This is the (accumulated) holiday allowance
If something is not right
If you have questions about your pay slip first ask your employer for advice. If you need more information you can contact workers unions or labor law lawyers for advice.
Trade union federations
Federatie Nederlandse Vakbeweging (FNV) (click on the globe icon upper right and choose English) and Algemene Onderwijsbond (AOB) are Dutch trade union federations, they guard and advocate employees’ rights in matters related to collective labour agreements, social security, and pensions. They can answer any questions you have about work and income and help you if you have problems with your wages.
Dutch tax system
Taxation
Like much of Europe, taxes in the Netherlands are relatively high. In return the public services are relatively good. Part of your taxes consist of social security contributions. If you live in the Netherlands, you qualify as a resident taxpayer. If you live abroad and receive income from the Netherlands that is taxable in the Netherlands, you qualify as a non-resident taxpayer. In both cases, you will be subject to Dutch income tax.
How do I pay taxes?
If you receive a salary, your employer will pay your tax over this salary in advance. On your payslip you read how much of your gross salary is paid to the tax office monthly. Furthermore, at the end of the year you receive an annual overview of your salary and the paid taxes. This overview is called Jaaropgaaf in Dutch and is important to keep for your administration. Then you can actively approach the tax office to file your taxes that year. It is wise to do this if you can use tax deductions/cuts. For example, when you start work halfway the calendar year, it is likely that you can apply for tax deductions. When you file your taxes you need to provide information on all your taxable income. Keep in mind that most scholarships (including grants, stipendia and fellowships) are also taxable income. Follow this link for more information on income tax.
How much tax do I need to pay?
The total of your taxable income, the applicable tax rates, the tax credits and possible tax cuts will decide the amount of tax you need to pay. If you receive salary, these social security contributions are automatically paid to the Tax Office through the monthly tax-payment withheld from your salary by your employer. Follow this link for more information on income tax.
Other taxes
For each product that you purchase you automatically pay VAT. The general rate is 21% VAT. There are certain branches and services and products which fall under the lower VAT-rate of 9%: e.g. food, medicine, books, transport and cultural events. And the services of hairdressers, bicycle repair men and shoemakers.
If you own a car, motorbike or other motor driven vehicle you will need to pay motor vehicle tax every three months. The amount of motor vehicle tax (motorrijtuigenbelasting) which you have to pay depends on the type of vehicle (a.o. age, weight, CO2 production).
Your municipality can charge taxes for specific services such as water drainage (rioolheffing) and waste handling (afvalverwerking). You may ask your local municipality for information on rates and taxes.
For more information on tax matters in the Netherlands, please visit the website of the Dutch tax authorities named 'de Belastingdienst'.
30% Tax facility
The 30% ruling is a Dutch tax exemption for employees who were hired abroad to work in the Netherlands. If your situation meets various conditions, your employer can pay 30% of your salary as a tax-free allowance. There are a number of conditions you need to meet in order to be elidgable for this tax examption. You can read more on this website of the Dutch tax authorities.
Most Dutch institutions of higher learning will be able to provide more information and will assist you with the application when you start working.
Avoiding double taxation
It is possible that even though you stay in the Netherlands, from a fiscal point of view, you are still seen as a non-resident tax payer. For example, because other family members still live in your country of origin and you visit them regularly. Because the Dutch employer performs the task as withholding agent on the source of income and the taxable country of residence will tax you on your world income, this may lead to double taxation. To avoid double taxation it is first important for the employer to make a correct judgement on what your taxable country of residency is. In most treaties the country of residence is determined by balancing someone’s social, economic and legal ties to a country. A strong social tie to the country of origin could be decisive.
If the country of fiscal residency is not the same as the country of source income, the bilateral tax agreement applies. To avoid double taxation the Netherlands has concluded tax treaties with a large number of countries. A tax treaty is an arrangement between two countries about which of them has the right to tax certain types of income. In this way, a situation is avoided where you would have to pay tax in two countries on the same income. Treaties with different countries are not always identical in content. If the Netherlands has concluded a tax treaty with the country from which you receive income, you can only find out about the exact tax consequences in the Netherlands by consulting the applicable treaty.
Contact your HR advisor if you have any questions regarding your taxation.