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Tax brackets and -tariffs
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:
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.
The tax tariff determines how much tax you have to pay on your income in a certain tax bracket. We only have 2 tax brackets with 2 tax tariffs left in 2020. This makes the Dutch tax system a lot easier to understand.
|Tax bracket||Income||Tax tariff|
|Bracket 1||Up to € 68,508||37.35%|
|Bracket 2||From € 68,508||49.50%|