In two calculation examples, we show you how the payroll tax credit is calculated and to which income you can best apply it.
We emphasize that the calculation examples below are not exhaustive and do not cover all situations. Would you like to avoid a supplementary assessment on your income tax? Then request a provisional income tax assessment from the Dutch Tax and Customs Administration. You can read more about this on the Dutch Tax and Customs Administration website.
Go to the Tax Authorities website (in Dutch)Calculation example 1
Participant is over the state pension age and married.
- AOW pension: €12,000 per year
- Philips Pension Fund pension: €40,000 per year
- Total income: €52,000 per year
With a total income of €52,000, the portion above the phase-out threshold is €23,594 (€52,000 - €28,406). The phase-out is 3.170% of €23,594, which amounts to €748. The remaining tax credit is therefore €1,536 - €748 = €788. This credit is offset against the tax you owe.
It is best to apply the payroll tax credit to the pension you receive from Philips Pension Fund. This is your largest source of income.
Calculation example 2
The participant is younger than the state pension age and has a high pension from multiple sources of income.
- Pension Fund x: €22,000 per year
- Pension Philips Pension Fund: €70,000 per year
- Total income: €92,000 per year
With an income of €92,000, the portion above the phase-out threshold is so large that the general tax credit is fully phased out. It is wise not to apply the payroll tax credit to your income, as you will not be entitled to a tax credit.