Tax thresholds in the Netherlands vs. the number of hours - will you pay more tax for overtime?

author: Maciej Wawrzyniak4 April 2023
Oceń post
Onroerendezaakbelasting – podatek od nieruchomości w Holandii


People leaving their country for work very often want to make the most of the situation and earn a large sum of money in the shortest possible time. To this end, they very often take advantage of the possibility of overtime and the additional higher rate for it. However, some people fear that with the increase in salary there will be a need to pay more tax and it will become unprofitable. What is the reality? In today's post we will present how the tax for overtime in the Netherlands presents itself - welcome.

Overtime Netherlands - how are they paid?

Let's perhaps start by giving a brief overview of the regulations on additional working time. Full-time work in the Netherlands is between 36 and 40 hours per week. You can also work longer - however, overtime is payable or additional days off. These are paid at between 125% and 135% of the regular rate, depending on the CLA (an agreement between employers and unions). This agreement also regulates other employment issues. An employee can work no more than 12 hours per day, including overtime. The workweek can be a maximum of 60 hours, after which each person is entitled to a minimum of 36 hours of uninterrupted rest.

It is worth remembering that these are general rules, and individual collective bargaining agreements - may introduce certain deviations from the above rules. In practice, the rate for additional hours can range from 100 to 200 percent.

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Overtime and tax - will you pay more?

You're probably wondering what kind of overtime tax you'll have to pay if you decide to work longer hours. In the Netherlands, the tax thresholds on the number of hours worked are set on an estimated basis by the Belastingdienst, which calculates a different rate for each person.

The Belastingdienst uses the income earned in the previous year to calculate taxable income and estimates tax for overtime on that basis. This is called the "special rate."

To calculate your Dutch tax refund, you will primarily need your Jaaropgave tax card, which you will receive from your employer. Using our Dutch tax return app, you will accurately calculate your Dutch overtime tax. Our device is extremely intuitive and easy to use - all you need to do is enter the basic data into the calculator - then you will receive the amount of refund or possible surcharge.

Tax thresholds in the Netherlands - how many hours affect the rate?

Overtime, like normal hours worked, is taxed according to the tax bracket you are in. Until recently, there were three different rates in this country, but now there are two thresholds in the Dutch system:

-36.93% - for incomes below €73,031,

-49.5% - for incomes above 73,031 euros.

So you won't pay exorbitant overtime tax until your overall annual income exceeds the amount affecting the tax rate increase. Otherwise, the higher tax will apply only to the excess over €68,507.

For example, if your taxable income for the tax year is €40,000, this amount will fall within tax bracket 1 exactly as your overtime. We will assume that €3,000 of your total income comes from overtime - in that case, you will pay €3,000 x 36.93%, or €1107.90 in tax.

Overtime and tax - get a refund at the end of the year

In case you have paid too much tax for overtime, at the end of the year everything will be counted and you will get it back. This is because it will be left in the annual tax return that you will have to file with the government. Although the tax rates seem very high, we actually have a chance to recover a large part of the advance payment paid for income tax. All thanks to the possibility of taking advantage of numerous deductions and credits. As a result, and in the case of low annual income, the real amount of tax paid is therefore much lower than the rates shown above suggest.

Wondering how much tax refund you will get from the Netherlands? Try out our Dutch tax refund calculator online 2023/2024 and find out what your return will be for the year. It is an extremely easy and intuitive tool to use – regardless of your salary and status, it ensures that every user will receive the most accurate overpayment calculation. Don't wait and make your tax affairs easier today!