Payroll tax
Loonheffing is a term used in the Netherlands to describe the taxes and contributions deducted from employees' income. It is an important part of the tax system and ensures that the government receives regular taxes, rather than employees receiving a large tax bill at the end of the year. Payroll taxes include income tax and social insurance contributions such as state pension and health insurance.
Wage tax in the Netherlands
Employers are responsible for withholding and remitting payroll taxes to the Internal Revenue Service. They calculate the amount deducted from employees' salaries based on the payroll tax tables and the employee's personal situation, such as income, age and any tax benefits.
Payroll tax is of great financial importance to both employees and the government. It ensures that taxes and contributions are paid regularly and staggered, easing the financial burden on workers and helping to fund public benefits.
