Payroll tax

If your company has its registered office in the Netherlands and you employ staff, you must deduct payroll tax from their salaries. In some cases, you are obliged to deduct payroll tax even if your company has its registered office in another country. Payroll tax consists of income tax and social insurance contributions.

You are obliged to deduct payroll tax in the Netherlands in the following cases:

• Your company has its registered office in the Netherlands.
• You have a permanent establishment in the Netherlands.
• You make available an employee in the Netherlands (posting, transfer, supply).
• Your employee works on the Dutch continental shelf.
• Your employee falls under the national insurance schemes of the Netherlands.

What must you do?

If you employ staff, you must do the following:

1. You register as an employer with the Tax and Customs Administration. You will then receive a payroll tax number and the required forms. You use the payroll tax number when submitting returns and with regard to other types of contact with the Tax and Customs Administration.
2. You record the following information about your employees:
   • surname and initials;
   • address, postcode and place of residence;
   • country and region of residence;
   • date of birth;
   • citizen service number (burgerservicenummer, BSN) or tax and social insurance number (sofinummer).
3. You verify and record each employee’s identity. In the case of a foreign worker, you must also check whether he or she is permitted to work in the Netherlands.
4. You create a payroll record.
5. You determine the elements of the employee’s wage and calculate the correct contributions and taxes.
6. You file a tax return on time and pay the contributions and taxes. The Tax and Customs Administration will inform you about how and when to file returns.

If you or your employee fails to comply with the obligations relating to payroll tax or the verification of the employee’s identity, you will have to apply what is known as the ‘anonymous rate’ (anoniementarief).

Payroll tax when hiring temporary staff or subcontracting work

If you hire temporary staff via an intermediary or subcontract work to a contractor/subcontractor, the intermediary or contractor/subcontractor must pay the payroll tax for these staff. If this company fails to do so, the Dutch Tax and Customs Administration (Belastingdienst) may hold you liable.