How income tax works in Netherlands
Dutch residents are generally taxed on worldwide income. Box 1 covers employment income, business profits, some other work income and the deemed income from a primary residence after mortgage interest rules.
For 2026, Box 1 uses three brackets for people under state pension age: 35.75% up to EUR 38,883, 37.56% from there to EUR 78,426, and 49.50% above that. The first bracket includes national insurance contributions.
Employees usually pay through wage withholding. The 30% ruling can let qualifying expats treat a portion of salary as tax-free for a limited period, which is one of the main reasons internationally mobile staff still look at the Netherlands.
Income tax brackets in Netherlands
| Bracket | Rate | Notes |
|---|---|---|
| Up to EUR 38,883 | 35.75% | Includes national insurance component |
| EUR 38,883 to EUR 78,426 | 37.56% | Mostly income tax |
| Above EUR 78,426 | 49.50% | Top Box 1 rate |
Tax rates at a glance
- Bracket 1
- 35.75%2026
- Bracket 2
- 37.56%
- Bracket 3
- 49.50%
- National insurance in bracket 1
- Included
- 30% ruling
- If eligible
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
EmployeesExpatsFoundersContractorsCross-border workers
Watch out for
- Box 1 is only part of Dutch personal tax. Investments may sit in Box 3 and large shareholdings in Box 2.
- The 30% ruling is valuable but conditional, time-limited and not automatic for every expat hire.
- Healthcare contributions and employee insurance premiums can add to the total employment cost stack.
- Self-employed people need to model profit tax, allowances and contributions carefully rather than copying the employee wage table.
Frequently asked questions
What is the top income tax rate in the Netherlands?
The top Box 1 rate is 49.50% in 2026 on income above EUR 78,426.
Do expats pay Dutch income tax?
Yes if they are Dutch tax residents or have Dutch-source employment or business income. Some qualifying expats can use the 30% ruling.
Is all income taxed in Box 1?
No. Substantial shareholdings usually fall in Box 2 and many savings or investments in Box 3.