Payroll in the Netherlands 2026: loonheffing, premiums, payslips

In the Netherlands the employer withholds loonheffing from each salary: wage tax and national insurance premiums in one combined rate, 35.75% on the first €38,883 of annual wage in 2026, reduced by tax credits. The employer adds the employee-insurance premiums and the Zvw health levy: about 15.6% of wages plus a Whk rate set per employer.

Payroll in the Netherlands at a glance

Social security contributions

Dutch social insurance has two layers. The national insurances (volksverzekeringen) cover the state pension (AOW 17.90%), survivors (Anw 0.10%) and long-term care (Wlz 9.65%). Their 27.65% is not a separate deduction: it is part of the first band of loonheffing, so it applies only to the first €38,883 of annual wage and is reduced by the tax credits.

The employee insurances (werknemersverzekeringen) cover unemployment (WW), incapacity for work (WAO/WIA) and sickness of flexible workers. Their premiums are paid by the employer, together with the income-related Zvw health levy:

AWf low or high. The low 2.74% applies only when the employment contract is for an indefinite period, made in writing and not an on-call contract; otherwise the employer pays 7.74%. Keep the signed contract in the payroll records.

Small or large employer. For 2026 an employer is small for the Aof and the Whk if its total premium wage in 2024 was no more than €1,082,500. Small employers pay the low Aof premium and the sector Whk rate (for example 1.93% in retail); medium and large employers pay the high Aof premium and an individual Whk rate. The Belastingdienst sends each employer its Whk rate before the year starts.

Ceiling. The maximum premium wage is €79,409 a year, or €6,617.41 a month. Employees also pay a nominal premium for their basic health insurance directly to their insurer; that is not part of payroll.

Income tax on salaries

Loonheffing is withheld with the white tables for current employment and the special-rewards table for the holiday allowance and bonuses. The tables apply these 2026 bands to the annual wage:

For employees above state pension age the first band is 17.85% instead.

Tax credits. The withholding is reduced by the loonheffingskorting, made up mainly of:

• the general tax credit (algemene heffingskorting): €3,115 for wages up to €29,736, reduced by 6.398% of the wage above that, down to zero at €78,426;
• the labour tax credit (arbeidskorting): building up to a maximum of €5,685 at a wage of €45,592, then reduced by 6.51% of the wage above €45,592, down to zero at €132,920.

An employee may have the loonheffingskorting applied by only one employer or benefit agency. Loonheffing is an advance on income tax: the employee's annual return settles the final amount.

Minimum wage, working time and mandatory pay

Minimum wage. Since 2024 the Netherlands has an hourly minimum wage and no fixed monthly or weekly amount. For employees aged 21 and over it is €14.71 gross an hour from 1 January 2026 and €14.99 from 1 July 2026. Younger employees receive a percentage: from 1 July 2026, €11.99 at 20, €8.99 at 19, €7.50 at 18, €5.92 at 17, €5.17 at 16 and €4.50 at 15. From 1 January 2027 the youth percentages rise, for example from 80% to 87.5% at age 20 and from 50% to 62.5% at 18.

Holiday allowance. Employees are entitled to vakantiegeld of at least 8% of their gross annual salary, paid at least once a year (most people receive it in May or June). It comes on top of the minimum wage. For employees earning more than three times the minimum wage, a written agreement can set a lower amount or none.

Working time. The Working Hours Act allows at most 12 hours per shift and 60 hours in a week, an average of 55 hours over four weeks and an average of 48 hours over 16 weeks.

Premiums for unsocial hours. The law sets no extra pay for night, weekend or public-holiday work; any surcharge comes from the collective agreement (cao), the contract or company rules.

Monthly payroll calendar and filings

1. 1Register as an employer with the Belastingdienst (form Melding Loonheffingen Aanmelding Werkgever) before you pay your first employee, and collect each employee's details for loonheffingen, including whether to apply the loonheffingskorting.
2. 2Run payroll for each month or four-week period with the current tables and premium rates.
3. 3File the loonaangifte electronically. With 10 or fewer employees you can use the Belastingdienst's own software in Mijn Belastingdienst Zakelijk; with more than 10 you must use commercial payroll software.
4. 4File and pay by the last day of the following month. In 2026 January was due on 28 February, September is due on 31 October and December 2026 on 31 January 2027. Pay with the payment reference from your aangiftebrief; from 1 May 2026 the Belastingdienst uses a new account, IBAN NL04 RABO 0200 1122 44, and the old account is accepted for 2026 returns only.
5. 5Give a payslip at the first payment and whenever pay changes. It must show the gross wage and its components, every deduction (loonheffing, pension, wage garnishment), the contractual hours, whether the contract is a written permanent one and whether it is on-call, the pay period, the statutory minimum hourly wage that applies, and the names of employer and employee.
6. 6Keep the payroll records for seven years, also after you stop employing staff.

Worked example: €4,000 a month

An employee aged 30 earns €4,000 gross a month with a written permanent contract, receives the 8% holiday allowance and has the loonheffingskorting applied. The employer is small and in retail (Whk 1.93%), with no pension scheme. Loonheffing is shown for the full year, because the tables spread it over the salary and the holiday allowance.

The amounts actually withheld each month come from the white table for the salary and the special-rewards table for the holiday allowance; any difference from the annual tax is settled in the employee's income tax return. With a temporary contract the AWf premium would be 7.74%, adding €2,592.00 a year.

Common mistakes

1. 1Applying the low AWf premium without a written contract for an indefinite period, or to an on-call contract.
2. 2Applying the loonheffingskorting at two employers, which leaves the employee with tax to pay afterwards.
3. 3Using the wrong Aof or Whk rate, for example ignoring that size is measured on the 2024 premium wage, or not entering the rate from the Whk notice.
4. 4Paying below the hourly minimum wage after it rose to €14.99 on 1 July 2026, or forgetting the higher youth rates from 1 January 2027.
5. 5Leaving out the 8% holiday allowance when budgeting the cost of a hire.
6. 6Paying without the correct payment reference, or late: the return and the payment are both due by the last day of the following month.

How Clientlly helps

Clientlly does not ship a built-in payroll profile for the Netherlands. An administrator enters the Dutch payroll rates once in the payroll tax settings: the income-tax bands, the personal allowance, the employee and employer contribution rates and the minimum wage. Clientlly then calculates gross to net and the employer contributions and produces payslips. Because Dutch withholding uses tax credits and official tables, check the results against the Belastingdienst tables, especially for the holiday allowance.

Alongside payroll, the human resources module handles leave requests and approvals with a leave calendar and keeps HR documents such as contracts, and attendance and time tracking records working hours and overtime.