Your payslip shows a gross figure well above what lands in your account. The gap is no secret, but it hides in a mix of tax, contributions and credits. Here is how the system works in the Netherlands for 2025 and roughly what to expect in 2026.
Gross versus net
Gross pay (brutoloon) is the amount your employer agreed with you for your work, before any deductions. Net is what you actually receive. Three large items sit between those two figures: the payroll levy (loonheffing, a combination of income tax and national insurance contributions), the Health Insurance Act contribution (Zorgverzekeringswet, or Zvw), and any pension premiums or contributions for unemployment (WW) and disability (WIA) insurance.
Want to work out the difference quickly for your situation? Try the gross to net calculator from National Calculators. You enter your gross pay and see what is left straight away.
The three bands in box 1
In 2025 a notable change took effect: box 1 now has three rate bands instead of two. Box 1 covers your income from work and home ownership.
- Band 1: up to 38,441 euros, rate 35.82%
- Band 2: from 38,441 to 76,817 euros, rate 37.48%
- Band 3: above 76,817 euros, rate 49.50%
The band 1 rate looks high, but it already includes the national insurance contributions (premies volksverzekeringen). People who have reached the state pension age (AOW) pay a much lower percentage on the same band, because they no longer pay the AOW contribution. The official rates are on the Belastingdienst site, the Dutch tax authority.
National insurance contributions
The contributions in band 1 cover the basic social provisions:
- AOW (old-age pension): 17.90%
- Anw (surviving dependants): 0.10%
- Wlz (long-term care): 9.65%
That comes to 27.65% together. On top sits 8.17% income tax, which leads to 35.82%. Alongside these, your employer withholds the income-dependent Zvw health contribution. Pension through your employer and any WW or WIA premiums are separate items on your payslip.
Tax credits
Tax credits (heffingskortingen) reduce the tax you owe. Two matter for most employees:
- General tax credit (algemene heffingskorting): in 2025 a maximum of 3,068 euros. Above a certain income it tapers off gradually.
- Employment tax credit (arbeidskorting): in 2025 a maximum of 5,599 euros. This applies only when you work and tracks your earned income.
There are also specific credits, for example for older people, single parents or those on a low income. A full overview is at Rijksoverheid.nl. For a calculation per situation, use the income tax calculator from National Calculators.
What changes in 2026?
For 2026 the band thresholds and credits are indexed each year. The Budget Day (Prinsjesdag) documents and the 2026 Tax Plan (Belastingplan) are the guiding source. The three-band structure is expected to stay the same, but the amounts shift with inflation. Small changes to the employment and general tax credits steer purchasing-power effects. Official details appear on Rijksoverheid Belastingplan once the law is passed.
A short worked example
Say you earn 45,000 euros gross a year. On the first 38,441 euros you pay 35.82%, about 13,770 euros. On the remaining 6,559 euros you pay 37.48%, about 2,458 euros. Your gross tax burden comes to 16,228 euros. You then subtract the tax credits, roughly 4,700 euros in total at this income. What remains, before pension and Zvw, is about 11,500 euros in tax. This is simplified, because your employer withholds the payroll levy each month and pension schemes vary a lot.
FAQ
Why is my net pay lower than someone else’s on the same gross?
Pension scheme, age (AOW), the tax addition for a company car and specific tax credits affect the net amount strongly, even at the same gross figure.
Do holiday pay and a thirteenth month count toward my annual income?
Yes. Holiday pay (vakantiegeld) and bonuses are part of your taxable annual income and can, together with your salary, partly fall into a higher band.
When do I get money back from the Belastingdienst?
Mostly if you received fewer tax credits during the year than you were entitled to, for example through changing employers, or if you have mortgage interest relief for an owner-occupied home.