Which is the best choice? Employ a bookkeeper or outsource it to an accounting firm? Read more about it here.
As an entrepreneur with staff, you have to deal with issues related to wage taxes. Wage tax is the tax deducted from an employee's salary. The employer pays this tax directly to the tax authorities.
The income tax/levy consists of the components: wage tax, national insurance contributions, employee insurance contributions and an income-related contribution for the Health Insurance Act. Together, these make up income tax.
Before an employee is employed, the employer must register with the Tax Administration. After that, you will receive a wage tax number to file the wage tax return. As entrepreneur and employer, you file the wage tax return. Belastingadviseur Eindhoven also takes care of the registration with the Belastingdienst, should you want help with that.
Levy rebates are reductions on payroll taxes. As a result, you have to pay less tax for the employee to the Belastingdienst. In any case, you have to take into account the general tax credit and the labour rebate. You need to apply the reduction using the form ‘Model tax return for payroll taxes’. You can download the levy rebate form here.
What tax credits are available?
Do you hire staff through an intermediary? Then the intermediary must pay the wage taxes for these staff. If they fail to do so, the tax authorities may hold you liable. A contractor who outsources his work to a subcontractor is also responsible for paying his wage tax or national insurance contributions.
Because of levy rebates, you will have to pay less tax. Levy rebates are deductions from income tax and national insurance contributions. As a result, you pay less tax and contributions.
In the table below, you can see the calculation of this levy rebate, along with the changes that will apply in 2024.
Taxable income from work and home 2023 | Levy rebate 2023 | Taxable income from work and home 2024 | Levy rebate 2024 |
up to €22,661 | € 3.070 | up to €24,813 | € 3.362 |
from €22,661 to €73,031 | €3,070 - 6.095% x (taxable income from work and home - €22,660) | from €24,813 to €75,518 | €3,362 - 6.630% x (taxable income from work and home - €24,812) |
from €73,031 | € 0 | from €75,518 | € 0 |
The labour rebate is the tax credit you get when you work. The amount of the labour rebate depends on age and the amount of income from work. From 2023, the payment of the labour rebate to the least-earning partner will cease.
In 2023, the maximum labour rebate was €5,052 (was €4,260 in 2022). From an income of €37,697 (was €36,650 in 2022), the labour rebate becomes progressively lower. The rate of reduction is 6.51% (was 5.86% in 2022). Please note that the government is increasing the labour rebate and introducing a different accrual rate. In 2024, this reduction is adjusted. The changes are as follows:
Taxable income from work and home 2023 | Labour rebate 2023 | Taxable income from work and home 2024 | Labour rebate 2024 |
up to €10,741 | 8.231% x income from work | Up to € 11.491 | 8.425% x income from work |
from €10,741 to €23,201 | € 884 + 29.861% x (income from work - € 10,740) | from €11,491 to €24,821 | € 968 + 31.433% x (income from work - € 11,490) |
from €23,201 to €37,691 | €4,605 + 3.085% x (income from work - €23,201) | from €24,821 to €39,958 | €5,158 + 2.471% x (income from work - €24,820) |
from €37,691 to €115,295 | €5,052 - 6.510% x (income from work - €37,691) | from €39,958 to €124,935 | €5,532 - 6.510% x (income from work - €39,857) |
from €115,295 | € 0 | from € 124,935 | € 0 |
Do you have a tax question about staff or personal income? Or would you like to outsource the company's payroll to a payroll agency? Then contact for an introduction consultation.
Which is the best choice? Employ a bookkeeper or outsource it to an accounting firm? Read more about it here.
What is the role of a shareholders' agreement and why should you include it when setting up a bv? Read more about it here.
Read here what you need to consider when setting up a bv with a foreign shareholder.
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