What is Loonheffing?
Loonheffing is the Dutch umbrella term for the combined wage tax and social premium withholding that every employer deducts from an employee's gross salary before paying out the net amount. It bundles four distinct components into a single monthly filing: wage tax (loonbelasting), national insurance premiums covering AOW state pension, Anw survivor benefits and Wlz long-term care, employee insurance contributions, and the income-dependent healthcare contribution under the Zorgverzekeringswet.
Every employer on Dutch soil, including foreign companies using an Employer of Record in the Netherlands, must register with the Belastingdienst and operate loonheffing from the first payroll run. The system is the primary channel through which the Dutch state collects personal income tax.
How does Loonheffing work?
The employer calculates gross salary, applies tax credits where the employee has confirmed the employer is the designated withholding agent, and deducts loonheffing using the official tax tables (loonbelastingtabellen) published by the Belastingdienst each January. The withheld amount is reported through the monthly loonaangifte and paid to the Belastingdienst by the last day of the following month.
At year-end, the employer issues a jaaropgaaf summarising annual gross salary, total loonheffing withheld, and any taxable benefits. The employee uses this document to file a personal income tax return, which reconciles withholding against actual liability. See the 2026 loonheffing breakdown for worked examples.
Who does Loonheffing apply to?
Loonheffing applies to every person who receives wages from a Dutch employer, whether on a permanent, temporary, or fixed-term contract. It covers directors of Dutch BVs under the fictitious employment rules (fictieve dienstbetrekking), seconded employees working in the Netherlands for more than 183 days, and employees hired through an Employer of Record. Foreign employers without a Dutch entity who employ Dutch residents may also trigger a loonheffing obligation and typically use an EOR to discharge it.
When does Loonheffing not apply?
Loonheffing does not apply to genuine self-employed contractors (zelfstandigen zonder personeel) who invoice for services and pay their own income tax annually. It is also absent where a double taxation treaty allocates taxing rights to another state and the employee spends fewer than 183 days in the Netherlands, where dividend income is the sole source rather than employment income, or where an A1 certificate from the home country keeps social security coverage abroad. For cross-border expat scenarios, 30% ruling eligibility reduces but does not eliminate loonheffing.