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Everyone in the Netherlands has to pay taxes. However, do you completely understand how the tax system is constructed? After reading this page, we hope to inform you enough so you know how the Dutch tax system is constructed! We focus on box 1: income from work and from an owner-occupied home.
There are two terms that are important in box 1:
Tax brackets
Do you know what a tax bracket is? A tax bracket divides the taxable income into pieces. Each tax bracket has his own tax tariff. In the Netherlands, we have a progressive tax system. This means that you pay a higher tariff when you are earning more.
Tax tariffs 2025
The tax tariff determines how much tax you have to pay on your income in a certain tax bracket. Below are the updated tariffs for 2025:
Tax tariffs for box 1: If you are under the AOW (state pension) age in 2025
| Tax bracket | Income | Tax tariff |
| Bracket 1 | Up to €38,441 | 35.82% |
| Bracket 2 | €38,441 to €76,817 | 37.48% |
| Bracket 3 | From €76,817 | 49.50% |
Tax tariffs for box 1: If you reach the AOW age in 2025 (born on or after January 1, 1946)
| Tax bracket | Income | Tax tariff |
| Bracket 1 | Up to €38,441 | 17.92% |
| Bracket 2 | €38,441 to €76,817 | 37.48% |
| Bracket 3 | From €76,817 | 49.50% |
Tax tariffs for box 1: If you were born before January 1, 1946
| Tax bracket | Income | Tax tariff |
| Bracket 1 | Up to €40,502 | 17.92% |
| Bracket 2 | €40,502 to €76,817 | 37.48% |
| Bracket 3 | From €76,817 | 49.50% |
State pension age
But be aware! Did you already reach the state pension age? In that case, other tax brackets and tariffs apply. We have dedicated a page for individuals who are already retired. Look at this page to check which tax brackets and tariffs apply in your situation.
EXAMPLE 1
Your taxable income amounts to €35,000. In this case, only the first tax bracket applies.
- Your taxable income is your income reduced by the applicable deductible items.
In 2025, you pay €35,000 * 35.82% = €12,577.00 income tax. This amount will be reduced by the applicable tax credits.
EXAMPLE 2
Your taxable income amounts to €80,000. In this case, both tax brackets apply.
- Your taxable income is your income reduced by the applicable deductible items.
In 2025, you pay the following on income tax:
€38,441 * 35.82% = €13,779.47
(€76,817 – €38,441) * 37.48% = €14,356.55
(€80,000 – €76,817) * 49.5% = €1,586.99
Total = €29,722.01
This amount will be reduced by the applicable tax credits.
We are happy to help!
Do you still have any questions about the Dutch tax system after reading this page about the Dutch tax brackets and -tariffs? We are here to help you. You can contact us using the details below.
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