How Dutch income tax works
The Netherlands taxes income in three "boxes": Box 1 covers employment, business and home-ownership income; Box 2 covers substantial shareholdings; Box 3 covers savings and investments. This calculator covers Box 1, where almost all salary tax is paid. Since 2025, Box 1 uses three brackets — the old first bracket was split in two — and the 2026 figures are confirmed: 35.75% to €38,883, 37.56% from €38,883 to €78,426, and 49.50% above €78,426.
The first bracket looks steep for a reason: it bundles national-insurance premiums (AOW, ANW and Wlz — together 27.65%) with the actual income-tax component. That's also why people at AOW (state-pension) age pay only 17.85% in the first bracket: they no longer owe the AOW premium. The second and third brackets are pure income tax.
What the calculator deliberately leaves out are the tax credits — the algemene heffingskorting (general credit, up to about €3,115 in 2026) and the arbeidskorting (labour credit, up to about €5,685), both of which taper with income. They're applied automatically on your assessment and can cut the bill substantially, so treat this result as the before-credits figure — your real take-home is higher.
The Dutch system rewards filing correctly rather than gaming brackets: because most employees' tax is withheld through payroll (loonheffing), the annual return mostly reconciles credits and deductions like mortgage interest (hypotheekrenteaftrek) in Box 1. The 3-bracket structure itself is young — until 2025 there were two brackets, and the split of the old first bracket was designed to make the system slightly more progressive without touching the 49.50% top rate, which has been stable for years.
Methodology
AOW age: same structure, but 17.85% in the first bracket instead of 35.75%.
Credits (algemene heffingskorting, arbeidskorting): not included — applied automatically by the Belastingdienst.
Worked example
€70,000 taxable Box 1 income, working age, 2026:
- €38,883 × 35.75% = €13,900.67
- €31,117 × 37.56% = €11,687.55
- Total before credits = €25,588.22 — effective rate 36.5%
Once the general and labour credits are deducted on the actual assessment, the effective rate drops several points — which is why Dutch payslips often look kinder than the bracket rates suggest.
Frequently asked questions
Why is the first bracket rate (35.75%) so high?
Because it's not just income tax — it includes 27.65% in national-insurance premiums (AOW/ANW/Wlz). The pure income-tax part of the first bracket is only about 8.1%.
Why do AOW-age taxpayers pay less in the first bracket?
At state-pension age you stop paying the AOW premium, so the first-bracket rate drops from 35.75% to 17.85%. Select the AOW option in the calculator to apply it.
Are the tax credits included?
No. The algemene heffingskorting (~€3,115 max) and arbeidskorting (~€5,685 max) depend on your exact income and are applied automatically by the Belastingdienst. The calculator shows the before-credits figure, so your actual tax will be lower.
What's the deal with the 30% ruling?
Eligible expats recruited from abroad can receive 30% of salary tax-free for up to 5 years (being phased to 27% from 2027). It requires an employer application and minimum salary — not modelled here, but it can dwarf the bracket maths.
Does this cover my savings (Box 3)?
No — Box 3 taxes a deemed return on savings and investments under separate rules. This calculator is Box 1 (employment/business income) only.
Are the 2026 rates confirmed?
Yes — confirmed via the Dutch Chamber of Commerce (KVK) and corroborated by multiple tax sources: €38,883 / €78,426 thresholds at 35.75% / 37.56% / 49.50%. The 3-bracket structure dates from the 2025 split of the old first bracket.
Figures verified for tax year 2026 · Last reviewed September 2026 · Sources: kvk.nl (Dutch Chamber of Commerce, Dutch tax rates 2026); portsighttax.com; tax-calculator.nl