fiscal info corporations

Dutch taxable wages

Last updated: 23-11-2020

Wage tax is imposed on taxable wages.

Taxable wages in essence include all remunerations, benefits and allowances which an employee receives for the fulfillment of his/her employment, unless explicitly exempt, and including:

  • cash payments
  • remunerations received from third parties  
  • income in kind, including the saving arising from the private use of a company car, products from own company, company housing, lunches and beverages at work, etc., benefits derived from stock and option incentive plans
  • bonusses
  • severance payments
  • benefits derived from non-qualifying insurances and pension plans.

The law provides for a closed system of exemptions and exempt income.

The most import exemptions relate to the premiums paid by the employer for qualifying pension plans, and the specific exemptions provided for employee benefits and allowances under the so-called Labor Costs Regulation (in Dutch "Werkkostenregeling” or “WKR”).

In the international context the so-called 30% Regulation provides for the possibility for employers to pay out 30% of the gross pay of qualifying employees as a tax free allowance for the coverage of so-called extraterritorial costs. These are costs which an employee assigned to Netherlands needs to make to adjust him/herself to the Netherlands because it is not his/her home country. This also applies to Dutch employees assigned abroad. The extraterritorial costs are deductible by its nature, and the 30% ruling only provides the possibility to quantify these expenses at 30% of gross pay, without the obligation to provide further evidence.  


Go to >   The payroll service package of TAXci

Go to >    Index page - Payroll obligations in the Netherlands