Dutch Payroll Tax and Salary Administration: An Employer’s Guide

What Is Dutch Payroll Tax?

Payroll tax (loonheffing) is the collective term for taxes and social premiums that employers withhold from employee wages and remit to the Belastingdienst. It comprises:

• Wage tax (loonbelasting) – a prepayment of income tax.
• National insurance premiums – AOW (17.90%), Anw (0.10%), Wlz (9.65%) in 2025.
• Employee insurance premiums – WW (AWf premium: 2.64% low / 7.64% high), WIA/WAO, ZW.
• Healthcare contribution (Zvw) – employer levy of 6.57% in 2025.

Filing Frequency and Deadlines

Payroll returns are filed per pay period (monthly or 4-weekly) via payroll software or your accountant. The return and payment are due by the last day of the month following the pay period. Example: January 2025 wages must be filed and paid by 28 February 2025.

Corrections and Penalties

Errors in previous returns can be corrected via a correction message. Act quickly: the Belastingdienst can impose additional assessments with a default penalty of 3% (maximum EUR 5,514) for late payment. In cases of intent or gross negligence, penalties can reach 100% of the amount assessed.

Work-Related Costs Scheme (WKR) in 2025

The WKR lets employers provide tax-free allowances and benefits. The tax-free budget is:

• 1.92% of the first EUR 400,000 in taxable payroll.
• 1.18% of the excess.

Common targeted exemptions (outside the budget): travel allowance (EUR 0.23/km), remote work allowance (EUR 2.35/day), meals, professional literature and training. If you exceed the budget, the employer owes 80% flat-rate tax on the excess.

Practical Obligations

• Identity verification: check each employee’s ID before their first working day and keep a copy on file.
• Payroll tax credit: the employee indicates via a standard form whether you may apply the credit. This is only allowed with one employer.
• Annual statement: employees receive an annual wage statement (now processed automatically via the payroll return).

Common Mistakes

Frequent errors include applying the wrong tax table, allowing the payroll tax credit with multiple employers, incorrectly processing company cars, and misadministering the 30% ruling. MOJKA Finance handles payroll administration for businesses across the Netherlands. Contact us to avoid costly mistakes. As your expat accountant in Rotterdam, MOJKA Finance is here to help – contact us for a free consultation.