Dutch nationals with ties to The Netherlands (tax residents) are required to be on the Dutch payroll for income tax.
This is now a requirement by law, in accordance with the double-taxation agreement between Ireland and The Netherlands which gives The Netherlands withholding income taxation rights.
If you are unsure about whether you are Dutch tax resident,please consult our Article: Dutch tax residency explained
Please find below some general notes on the Dutch payroll. Please note that this is an ongoing project that we are working on with the Belastingdienst and the Kamer Van Koophandel (KvK) so we may not have all the answers immediately while we wait for confirmation from them on certain taxation matters regarding your contract work. We operate a Dutch payroll and will remit all your taxes and social insurance monthly on your behalf.
What taxes will you pay?
If you are working in the Netherlands, you will pay income tax and social insurance in the Netherlands.
If you are a Dutch tax resident and working in another EU country, you will pay income tax in the Netherlands and social insurance in that country (limited exceptions apply for mobile contracts or in cases of frequent permanent base moves.
Your social insurance (in cases where we can pay on your behalf) will show as EU SI on your payslip. Social insurance rates in other countries can be found here:
BSN Registration:You may need to register for a BSN number, if you do not have one already. This is a Citizen Service Number. If you live in The Netherlands, please seek to obtain a BSN. The following link will explain the procedure in a simple, yet informative manner.http://www.iamexpat.nl/expat-page/official-issues/essentials/bsn-sofi-numberIf you are living overseas and do not have a BSN, it is advised you call The Belastingdienst, to obtain further information on being able to register for a BSN, you may need to explain that you are working for an Irish Ltd company but have a contract for services agreement via an intermediary to fly aircraft on behalf of Ryanair.Should you have any difficulty in obtaining a BSN, please contact our country manager.
Self-assessment:As a director of an Irish Ltd company, clients in The Netherlands may need to submit a Dutch tax-return to the relevant authority in a punctual manner through their own accountant. It is advised that you seek guidance on this from a Dutch accountant, if necessary. At present, we do not offer this service, however this may change in the future.You contract work hs employment status in the Netherlands and you should advise your accountant to submit your income in accordance with the income/expenses rules of employment only.We will continue to submit any necessary Irish returns on your behalf. If you do submit a Dutch tax return, you will need to apply for a Dutch certificate of residence in order to apply for a refund of any Irish tax paid.
Payment:The Dutch payroll will be calculated in Euros and your payslip will indicate your net pay. You will no longer receive an Irish payslip. You will continue to be paid in Euros from your company bank account.
Expenses and take home pay:Expenses are strictly enforced as actual expenses only.* You will need to keep the proof of payment to claim the expense.Please note that it is your responsibility to claim expenses in accordance with these rules and keep proof of expenditure.You should also be uploading receipts into OAM in all cases.Salary options are not available.You will need to upload the expenses that you have incurred on a monthly basis. The deadline is the 1st of each month.
E.g - Expenses incurred throughout the month of November, are to be uploaded to OAM by the 1st December. This will allow enough time for us to check the expenses and process them in the January payroll.Please be as descriptive as possible when commenting in the remarks section whilst uploading. I.e If you are OOB state the location, dates, reason.If you have any questions please contact firstname.lastname@example.org.Further information on expenses can be found here: Dutch Monthly Expenses
Taxation RatesYour contract work has employment status in the Netherlands. This means that you are treated in the payroll as a deemed employee, i.e. you are you assume the employer and employee payroll/taxes responsibility of the Irish Limited company on your agency pay.
Take home retention in the Netherlands is approximately 50-60% of agency pay.
Income tax rates:
|Income from employment and home|
|Taxable income || ||Tax per bracket||Total per bracket||Cumulative|
|of more than||but less than|| || || |
| -|| € 20.142||8,90%|| € 1.792|| € 1.792|
| € 20.142|| € 33.994||13,20%|| € 1.828|| € 3.620|
| € 33.994|| € 68.507||40,85%|| € 14.098|| € 17.718|
| € 68.507|| -||51,95%|| -|| |
Social Insurance Rates
|SOCIAL INSURANCE CONTRIBUTIONS - NETHERLANDS|
|WAO-WIA wg (sector specific)||Capacity to work/Disability fund||6.77%|
|Premie Sectorfond (sector specific)||Sector specific fund||1.39%|
|Gediff WGA wg||Differentiated premium WGA||0.47%|
|werkloosheidswet (WW)||Unemployment fund||2.85%|
|ZW wg||Sickness fund||0.81%|
|Zvw werkgevesheffing||Healthcare insurance fund||6.90%|
|AOW||General old age fund||17.90%|
|ANW||General surviving relatives fund||0.10%|
|Wlz||General Act Exceptional medical fund||9.65%|
|Gross Salary threshold||€54614 (cumulative basis = €4551.16pm)||€33,994 (cumulative basis = €2832.83pm)|
How the Dutch payroll operates:
We may need to move you to an Irish limited company registered in the Netherlands as an overseas employer, our country manager will be in touch to organise this.
1. Your uploaded expenses are checked each month against allowable expenses rules. Non-allowable expenses are deducted.
2. Your agency pay is reduced by the Employer social insurance calculation to find the taxable gross salary.
3. Your income tax and employee social insurance is calculated on the gross salary (less allowable expenses) and shows under the description: Loonheffling. In the Netherlands Income tax and employee social insurance are combined under this heading.
4. The net pay is paid directly to your account from your company bank account.
Your payslip explained
You can find an example of a Dutch payslip here: (in progress)