Money
How income tax works in the Netherlands: box 1 and tax credits
Dutch tax on salary is worked out in box 1, and two tax credits are taken off the result.
The Netherlands taxes income in three boxes. Salary falls in box 1. For people below state pension age the first bracket includes the premiums for national insurance. After the tax is worked out, tax credits (heffingskortingen) reduce it, and they depend on your income.
Box 1 rates for 2026 (below state pension age)
| Taxable income | Rate |
|---|---|
| Up to €38,883 | 35.75% |
| €38,883 to €78,426 | 37.56% |
| Over €78,426 | 49.50% |
💡 Pro Tip: The Belastingdienst's own example for a €80,000 salary gives €29,531 of box 1 tax before credits. Rates differ for people at or above state pension age. Check the Belastingdienst for your situation.
The two tax credits
| Credit | How it works in 2026 |
|---|---|
| General tax credit | €3,115 up to €29,736 of income, then falling by 6.398% of each euro to zero at €78,426 |
| Labour tax credit | Rises to €5,685 at €45,592 of earnings, then falls by 6.51% of each euro to zero at €132,920 |
Worked example: €60,000
1
Box 1 tax
35.75% of €38,883 plus 37.56% of €21,117 is €21,832.22.
2
General credit
€3,115 − 6.398% × (€60,000 − €29,736) is €1,178.71.
3
Labour credit
€5,685 − 6.51% × (€60,000 − €45,592) is €4,747.04.
4
Tax and take-home pay
Tax after credits is €15,906.47, leaving €44,093.53 a year, about €3,674 a month.
✨ Key Takeaways
- Salary is taxed in box 1 at three rates.
- The first rate includes national insurance premiums.
- Two tax credits reduce the tax and fall as income rises.
- Check the Belastingdienst for the current year's figures.