In two calculation examples we show you how the wage tax credit is calculated and to which benefit you can best apply it.
We would like to emphasize that the calculation examples below are not exhaustive and do not cover all situations. Do you want to avoid receiving a surcharge on your income tax? Then request a provisional income tax assessment from the Dutch Tax Authorities. You can read more about this on the Tax Authorities website.
Go to the Dutch Tax Authorities websiteCalculation example 1
Participant is older than the AOW retirement age and is married.
- AOW pension: € 12,000 per year
- Philips Pensioenfonds pension: € 40,000 per year
- Total income: € 52,000 per year
With a total income of € 52,000, the part above the reduction limit is € 23,594 (€ 52,000 - € 28,406). The reduction is 3.170% of € 23,594, which amounts to € 748. This means that the remaining tax credit is € 1,536 - € 748 = € 788. This discount is applied to the tax you owe.
It is best to apply the payroll tax credit to the pension you receive from Philips Pensioenfonds. This is your largest source of income.
Calculation example 2
Participant is younger than the AOW-age and has a high pension from multiple sources of income.
- Pension Pension Fund x: € 22,000 per year
- Pension Philips Pensioenfonds: € 70,000 per year
- Total income: € 92,000 per year
With an income of € 92,000, the portion above the phase-out limit is so large that the general tax credit has been fully phased out. It is best not to apply the payroll tax credit to any of your incomes. Because in this case you are not entitled to a tax credit.