Payroll taxes in the Netherlands must be deducted from the salary and paid to the tax authorities. The taxes on the payroll are:
- wage tax and national insurance contributions
- employee insurance premiums
- income-related contribution to the Health Insurance Act (ZVW employer’s levy and ZVW contributions)
What is a wage tax?
Employers already pay wage taxes to the taxing authorities, saving the employees from having to do so later. Wage taxes include national insurance contributions, in addition to the wage tax that is placed into a sizable sum from which the government, for example, constructs roads. When an employee retires or gets seriously ill, they receive money from that sum. The tax authorities will check an employee’s tax return at the end of the year to see if they have paid enough income tax. If not, they must make up the difference. On the other hand, they may also be eligible for a refund.
Become a registered employer
You must register with the Tax Authorities as an employer in order to pay payroll taxes in the Netherlands. Following that, you will get:
A payroll tax ID
Alongside is the letter of declaration, which may have a connection to the industry, and the decision or contact with the varied premium percentage. If you need to pay your employee’s employee insurance premiums, you can use the work resumption fund (Whk).
If you file a payroll tax return or have any other interactions with the tax authorities, you must use your payroll tax number.
Payroll tax and national insurance contributions are reduced
For some of your employees, you may not always be required to pay the whole amount of the payroll tax that was withheld. For instance, they carry out research and development (R&D) activities. This is called remittance reductions. In the Handbook Payroll Taxes, Chapter 26 has more information about this.
Verify the identification of your employee
Ask for a statement with a signature, a date, and personal information such as a person’s name, address, date of birth, and social security number when hiring someone. You would need to verify your employee’s identity and have a record of it. You should confirm a foreign employee’s authorisation to work in the Netherlands before hiring and including them in your payroll.
Prior to the employee’s employment period, you must obtain all their information and confirm their identity. If you are unable to correctly verify your employee’s identity, the anonymous rate must then be applied. Chapter 2 of the Handbook Payroll Taxes has more information on the anonymous rate.
Establish payroll management for your Netherlands company
Payroll setup and upkeep are some of the other requirements when hiring employees in the Netherlands. The Handbook Payroll Taxes, chapter 3, has more information about this. Wherever your company is based or has an office, you should maintain its payroll administration at that same location. You are also in charge of salary determination, premiums and taxes and make timely payments.
Wage tax brackets 2022
You can see how much tax is levied on your salary in the table below:
| Tariff | Taxable income | Percentage |
|---|---|---|
| Basis | up to € 69,398 | 37.07% |
| Top | From € 69,399 | 49.50% |
How much tax will I pay with a tax credit in 2022?
Fortunately, there are also several tax credits that lower the amount on which you pay tax. In the table below, you can see which tax credits are automatically settled before you receive your salary:
| Type | Maximum amount | For whom? |
|---|---|---|
| General tax credit | €2,888 | For incomes up to € 21,317 (from € 21,317 to € 69,398 this decreases) |
| Labour tax credit | 4.541% x labour income | Labour income from € 0 to € 10,350 |
| € 470 + 28.461% x (labour income – € 10.350) | Labour income from € 10,350 to € 22,356 | |
| € 3,595 + 1.656% x (labour income – € 21.430) | Labour income from € 22,356 to € 36,649 | |
| € 4,260 – 5.86% x (labour income – € 36.649) | Labour income from € 34,954 to € 109,346 | |
| € 0 | Labour income higher than € 109,346 | |
| Elderly discount | € 1,726 or (€ 1,726 – 15% x (collective income – € 38,464)) | Employees with AOW pension age |
| Young disabled discount | € 771 | Everyone with a right to Wajong and works |
Labor Law stipulations to consider as an employer
You have several significant duties and obligations as an employer. We will go over some of the responsibilities you have as an employer with regard to the health of your employees in this article. The potential accompanying challenges and problems will also be covered in the following sections.
Worker’s well-being
To safeguard an employee’s health, numerous requirements for employers are established. An employer has a so-called “duty of care” under the Working Conditions Act. Fundamentally, this duty of care means that the employer must make sure that workers can do their duties and responsibilities in a safe and healthy manner.
This responsibility of care entails a number of obligations. One of these responsibilities is to identify potential risks in the work’s execution and the required corrective actions. These are noted in the Risk Inventory and Evaluation (RI&E). The Coronavirus pandemic has now made this task increasingly crucial. Being aware of the relevant laws and regulations is an additional obligation you have as an employer.
RI&E
Every employer is required to regularly create and/or modify a RI&E in order to guarantee that workers can do their jobs as safely and healthily as possible.
Occupational illnesses and workplace accidents
A RI&E’s goal is to identify the risks, but unfortunately, no amount of risk mapping can guarantee that no occupational accidents will occur. Employers are obligated to notify the Labour Inspectorate right away if an accident or occupational sickness causes serious physical injuries, mental harm, or death. The Labour Inspectorate then determines whether to conduct a thorough investigation into the accident and its circumstances.
In the event of an occupational disease, the occupational health and safety agency will notify the Netherlands Centre for Occupational Diseases about the condition. Employers are required to keep a record of all accidents that result in employee absences due to an illness. This also falls under the RI&E. There are more circumstances in which registering an accident is required rather than reporting one. Even if it is not a catastrophic accident, registration is still required.
Requirements in the event of illness
The aforementioned responsibilities are established to prevent accidents and illnesses, but a company still has its obligations even when an employee is on sick leave. These obligations remain to be applicable even if the absence was not brought on by an occupational illness or an accident at work.
First, an employer is required to continue paying the salary in the event of illness, for whatever reason it may have been brought about. An exception will apply only when the worker knowingly contributed to their disease.
In most circumstances, the responsibility to keep paying salaries while an employee is ill lasts for a period of two years. You must continue to pay at least 70% of the compensation during the first year; nevertheless, the wage cannot be less than the minimum wage. In the case that a higher proportion has been stipulated in the job contract or collective bargaining agreement, the increased proportion then takes effect. Additionally, in the second year, you must pay the employee at least 70% of their regular salary; but, if their regular pay is less than the minimum wage, you are no longer required to supplement their compensation.
Reintegration
The reintegration of a sick employee is partly your responsibility as an employer since it is also the responsibility of an employee. These duties take into effect as soon as the employee reports for work absence due to illness. Most of the time after filing a sick report, an employee will return to work within two weeks. However, you will observe that the initial measures toward reintegration are not taken until the employer recognizes that the employee has more serious sickness. The goal is to keep the employee from being permanently unable to do their job duties, continuing to be disabled for work, and ultimately entering the WIA, for example.
This guide is part of Relocate Staff to the Netherlands in our Launch Guide.
