Netherlands payroll explained: loonheffingen in 2026

Loonheffingen is an umbrella term, not a single tax. It covers four things collected through the payroll: loonbelasting, premie volksverzekeringen, premies werknemersverzekeringen and the werkgeversheffing Zvw. The first two are withheld from the employee’s wage, the last two are the employer’s own cost, and all four land on one return.

The first two are charged together in one rate. Loonbelasting and the premies for AOW, Anw and Wlz are combined in the box 1 brackets, which is why a Dutch bracket-one rate of 35,75% looks alarming next to a foreign income tax rate. Most of that number is national insurance rather than tax.

Premies werknemersverzekeringen are different in kind. AWf, Aof, the Wko surcharge and the Whk are employer premiums and no part of them comes out of the employee’s wage. Neither does the werkgeversheffing Zvw at 6,10%. An employee looking at a Dutch payslip will not find any of the five, which is exactly right and routinely confuses employers arriving from systems where the split is shown on the slip.

The employer’s job here is arithmetic and filing rather than judgement. Work out what is due per employee per period, withhold it, pay it and declare it. The rates are published once a year by the Belastingdienst in the figures annex to the Nieuwsbrief Loonheffingen and apply from 1 January, with one exception that has nothing to do with tax: the statutory minimum wage changes again on 1 July.

For an employee below AOW age in 2026 there are three brackets. The first € 38.883 of annual wage is charged at 35,75%. Wage above € 38.883 up to and including € 78.426 is charged at 37,56%. Anything above € 78.426 is charged at 49,50%.

Bracket one is mostly national insurance, and the composition is published rather than inferred: premie AOW at 17,90%, premie Anw at 0,10%, premie Wlz at 9,65% and loonbelasting at 8,10%. Brackets two and three are pure loonbelasting, which is why the jump from bracket one to bracket two is only 1,81 points while the jump to bracket three is 11,94.

That composition matters for cost models, not only for curiosity. The AOW, Anw and Wlz premies are withheld from the employee’s wage and are not charged to the employer on top. A model that adds them to the employer stack has counted the same money twice and will produce a Dutch employment cost roughly a third too high. Who bears which premium across the whole system, and what each one buys, is set out in social security and pensions in the Netherlands.

Employees at or above AOW age no longer pay the AOW premie, so bracket one falls to 17,85% for them while 37,56% and 49,50% stay where they are. Payroll has to know each employee’s position, because the difference is 17,90 points on the first € 38.883.

Two credits reduce what is withheld, and in the Netherlands they are given through the payroll month by month rather than claimed back in an annual return. Between them they are the reason a Dutch gross-to-net calculation cannot be done with the bracket table alone.

The algemene heffingskorting is worth up to € 3.115 in 2026 for an employee below AOW age. It applies in full for wage up to and including € 29.736, then tapers at 6,398% on the excess above that figure until it reaches nil at € 78.426.

The arbeidskorting is the larger of the two and applies to income from current employment. It builds in three stages, at 8,324% up to € 11.965, at 31,009% on wage above that to € 25.845, and at 1,950% above that, reaching its maximum of € 5.685 at a wage of € 45.592. From there it tapers at 6,510% and reaches nil at € 132.920. A pay rise in the taper band therefore costs more than the bracket rate suggests, because the credit shrinks as the wage grows.

The mechanism that delivers both is the loonheffingskorting. The employee elects in writing with which employer it is applied, and it may be applied by only one withholding agent at a time. The Belastingdienst’s withholding tables are built entirely around that yes or no, which is why the question is asked at onboarding rather than at year end.

Someone with two jobs who applies it with both under-withholds all year and receives an assessment for the difference. It is the single most common Dutch payroll complaint and the cheapest one to prevent: ask once, keep the signed answer in the payroll administration, and check it again whenever a second job appears.

Five statutory charges sit on the employer side in 2026, and all five stop at the same ceiling. AWf is 2,74% on a permanent written contract that is not an oproepovereenkomst, and 7,74% on anything else. Aof is 6,27% for a small employer and 7,63% for a medium or large one, with the Wko surcharge of 0,50% levied alongside it.

The Whk has no national rate at all. It is set per employer by Belastingdienst decision each year: individually calculated for medium and large employers from their own WGA and Ziektewet history, and charged at the sector rate for small employers. The 2026 small-employer sector rates run from 0,76% to 6,63%, so the sectoraansluiting letter issued on registration is worth reading rather than filing.

The werkgeversheffing Zvw is 6,10%. An ordinary employee has nothing deducted for it. The 4,85% inhouding that appears in the same Belastingdienst table applies to categories such as DGAs and to pension and benefit income, and putting it on an ordinary employee’s payslip is a mistake with a real cash consequence.

Every one of the five is capped at a maximum premieloon of € 79.409 for 2026, which is € 6.617,41 a month or € 305,41 a day. Earnings above the ceiling attract no AWf, no Aof, no Wko, no Whk and no Zvw levy, which is the single biggest reason Dutch employer overhead falls as a percentage as salary rises.

On a permanent written contract in business services the five come to 16,77% of total gross pay in 2026, assuming no CAO applies and no occupational pension scheme is compulsory. Expressed on base salary instead of total gross pay the same money is 18,11%, and the worked example on a € 48.000 base shows why those two numbers are not in conflict.

The aangifte loonheffingen is filed per period, normally monthly, under the employer’s loonheffingennummer, and the payment goes with it. The Belastingdienst issues an aangiftebrief on registration setting out which periods are due and when, so the calendar is given to the employer rather than chosen by it.

The return is built per employee rather than as one company total. For each person it carries the wage, the loonbelasting and premie volksverzekeringen withheld, the employer premiums, the Zvw levy, and whether the loonheffingskorting was applied. Payroll software assembles it, but the data it needs comes from the onboarding file, which is why a missing BSN or an unanswered credit question stops a return rather than delaying one field.

Registration comes before the first hire, not before the first return. It produces the loonheffingennummer, a sectoraansluiting and the Whk percentage notice, and without the first of those there is nothing to file under. The sequence for a first Dutch hire is set out in how to hire an employee in the Netherlands.

Corrections run through the same return rather than a separate process, and the AWf rate is the usual reason for one. An employer must go back and re-file at the high rate if the employment ends within two months of starting, or if the employee is paid for more than 30% additional hours in a calendar year above the contractual hours. That second revision does not apply where the contract averages 30 hours a week or more, a threshold widened from 35 hours with effect from 1 January 2025.

A Dutch payslip shows the gross wage, the loonheffing withheld and the net paid. The five employer premiums do not appear as deductions because they are not deducted from anybody: AWf, Aof, Wko, Whk and the Zvw levy are the employer’s own cost and sit entirely outside the employee’s number.

Vakantiegeld normally appears once a year rather than monthly. The statutory 8% under article 15 WML accrues through the year and the overwhelming market practice is a single payment in May or June, taxed through the table for special payments rather than the ordinary monthly table. What the 8% is calculated on, and the cap that applies to it, belong to vakantiegeld.

There is no health insurance line either. Every Dutch resident buys basic health insurance personally from an insurer and pays that premium themselves. It is not a payroll deduction and does not appear on the payslip, which reliably surprises employers arriving from a country where health cover runs through the employer.

One figure will never match a hand calculation. Monthly withholding uses the Belastingdienst’s witte tabel, and the vakantiegeld payment uses the table for special payments, so an annual computation is right in total and out by a few euro in any given month. Model the year, then let the payroll run produce the month, and do not publish a mock payslip built from annual arithmetic.

Running this cycle for one person is the same work as running it for fifty: the registration, the tables, the monthly return, the corrections and the year-end. Employer of Record Netherlands arranges Dutch employment for people you have already chosen, so the arbeidsovereenkomst, the loonaangifte and the statutory employer duties sit with the employer named on the contract while your business chooses the person, sets the pay and runs the work.