Dutch income tax explained: Box 1, 2, 3 and the 30% ruling

To estimate what you can spend on rent, start with your take-home salary, then check whether savings, investments or company shares could create a separate tax bill. Dutch income tax divides income into three categories called Box 1, Box 2 and Box 3. One person can have income in all three in the same year.

Ruling update · 13 November 2026: The tax authority has clarified the salary test for qualifying master’s graduates who turn 30 during the year. See the birthday-year explanation. This update covers the ruling only; the general tax figures and Box 3 proposal review below remain dated 7 October 2026.

Two dates matter when planning ahead:

• 1 January 2027: Under the enacted wage-relief transition, qualifying continuing pre-2024 users retain 30%; 2024 entrants move to 27% with the old indexed salary threshold; 2025-and-later entrants move to 27% with the increased threshold. The actual approval and continuity conditions still apply.
• 31 December 2026: The separate partial foreign taxpayer transition for Box 2/3 ends, even if your wage ruling continues.

A main residence generally belongs in Box 1; a second or investment property generally falls in Box 3. Salary paid by a company in which you own shares remains Box 1 income. The shareholding itself may bring dividends and sale gains into Box 2.

This guide uses 2026 rules checked on 7 October 2026. The examples concern full-year Dutch residents. Moving during the year, cross-border work, pensions and treaty relief can change the result. The pending Box 3 proposals appear in a separate section below and are not used in the calculations.

Find the section that fits your situation

• Comparing a job offer? Start with the salary examples, then enter your own figures in the salary calculator.
• Checking an expat package? Read the ruling conditions and the separate Box 2/3 transition.
• Holding savings or investments? Read Box 3, including how actual return is compared. For substantial company ownership, use Box 2.
• Moving during the year or keeping overseas accounts? Read the cross-border limitations before using a full-year example.

Box 1: salary tax, national insurance and tax credits

For someone below AOW state-pension age throughout 2026 and fully covered by Dutch national insurance, the combined rates are:

Each rate applies only to the income within that band. Earning more than €78,426 does not mean that the entire salary is taxed at 49.50%.

The first rate combines 8.10% income tax and 27.65% national insurance contributions. These national insurance contributions are already inside the combined rate. Your personal health-insurance premium is a separate living cost. See the official Box 1 explanation.

Tax credits then reduce the calculated levy. Two important credits for employees are the general tax credit (algemene heffingskorting) and employment tax credit (arbeidskorting). A credit reduces tax; it is different from a deduction that reduces taxable income.

In 2026, the general credit is at most €3,115. Above aggregate taxable income of €29,736, it falls by 6.398% of the excess, down to zero. Aggregate income includes taxable income from Boxes 1, 2 and 3, so a salary-only estimate may overstate this credit if you also have investment income. The employment credit depends on employment income: above €45,592, it is €5,685 minus 6.510% of the excess, with a floor of zero. These are the relevant formulas for the examples below, not the complete credit tables for every income level. See Belastingdienst’s 2026 rates and credits.

Examples A and B: an €80,000 package, with and without the 30% ruling

Both examples assume one employer, a full year of Dutch residence and national insurance coverage, age below AOW throughout the year, no fiscal partner, no employee pension contribution, no home deductions, no benefits, no Box 2 or Box 3 income and no other tax credits. The €80,000 annual cash package already includes holiday pay, bonuses and any ruling reimbursement. Do not add another 8% holiday pay or a ruling payment on top.

Example B assumes an approved ruling and an employer agreement allowing the full 30% for the whole year. All calculated amounts are approximate, rounded to the nearest euro; payroll and tax-return rounding can differ.

The national insurance row is a component of the combined levy before credits, not another charge to subtract after the total. Example B changes both taxable wages and the credits. The €24,000 reimbursement stays inside the €80,000 package, leaving €56,000 taxable.

These figures do not include rent, health-insurance premiums or other household expenses. A monthly payslip may also vary with holiday pay, bonuses and pension deductions. Use the Dutch net salary calculator for a salary estimate with your inputs; it does not settle your complete Box 2 or Box 3 tax position.

What the 30% ruling changes

The expat scheme allows an eligible employer to pay part of an eligible employee’s wages tax-free as reimbursement for extraterritorial costs. In 2026 the maximum is 30% of wages including the reimbursement, subject to the scheme’s conditions and limits. It is not automatically a 30% addition to an agreed salary.

For the ordinary 2026 salary test, taxable wages after the exemption must exceed €48,013. Example B’s €56,000 exceeds that threshold, but salary alone does not establish eligibility: approval and the employer’s agreement still matter. Different salary rules can apply to qualifying categories. The maximum full-year 2026 exempt reimbursement is €78,600, corresponding to a €262,000 wage base. See the official expat-scheme conditions.

The enacted transition keeps the maximum at 30% in 2025 and 2026. From 1 January 2027, qualifying continuing pre-2024 users retain 30%; 2024 entrants move to 27% with the old, indexed salary norm; 2025-and-later entrants move to 27% with the increased norm. The actual approval and continuity conditions still apply, and the ruling must remain valid; this does not restart its duration. Your start date matters. These are enacted ruling transition rules, separate from the pending Box 3 proposals.

Turning 30 during the year with a qualifying master’s degree

For employees with a qualifying master’s degree, the lower salary norm applies through the month of their 30th birthday; the regular norm applies from the following month. Prorate each annual norm for its part of the year, then add them to get one annual threshold. The relevant annual taxable salary must exceed that combined threshold. In the official example of a birthday on 30 June, the threshold is 6/12 of the lower norm + 6/12 of the regular norm.

If the annual test fails, an exception may still preserve relief through the birthday month if the taxable salary for that period meets the prorated lower-norm test. This is conditional, not automatic retention. Ask payroll to calculate your birthday year separately; the calculator’s full-year master’s option does not support it.

Source: Belastingdienst position KG:041:2026:008, published 9 November 2026, checked 13 November 2026 for this ruling update.

The former Box 2/3 election is a separate rule

The partial foreign taxpayer election (partiële buitenlandse belastingplicht) was abolished for new use from 2025. Qualifying people who used the ruling before 2024 can still elect under the transition through 2026 only, while their ruling remains valid. A wage ruling that continues in 2027 does not preserve this election: the transition ends on 31 December 2026.

That election treats the person as a nonresident for certain Box 2 and Box 3 purposes. It was never a blanket exemption for every asset: Dutch property can remain taxable in Box 3. Having a wage ruling in 2026 does not automatically mean you can exclude foreign investments. Check the partial foreign taxpayer transition separately from your payslip.

Box 3: savings and investments in 2026

Under the deemed-return method, Box 3 generally starts with the value and composition of your assets and qualifying debts on 1 January. It calculates a return using different percentages for bank deposits, other assets and debts, then taxes the taxable return at 36%. It does not simply charge 36% of your bank balance.

For a mixed portfolio or qualifying debts, follow the full official Box 3 calculation; do not apply the simple all-investment example below unchanged.

Example C: salary plus €100,000 of investments

Keep all of Example A’s assumptions and add €100,000 of ordinary Box 3 investments on 1 January 2026. Assume no debts, other assets or partial foreign taxpayer status, and that actual return is not lower than the deemed result. The general credit is already zero at this salary.

Withholding is a prepayment of the final bill. If we assume the employer has already withheld exactly €26,087 and there are no other prepayments or credits, the remaining assessment is approximately €878. You would not pay the whole €26,965 again. This exact withholding assumption illustrates the settlement; it is not a forecast of what an employer will withhold. No portfolio gains are added to take-home salary in this example.

What if your actual return is lower?

Current counter-evidence rules allow a lower actual return to be considered. This is separate from the proposed future Box 3 law. The comparison covers the whole Box 3 portfolio, including income and both realized and unrealized value changes. Selling nothing does not necessarily mean the actual return is zero.

The actual-return calculation has no tax-free asset allowance. Losses can offset gains within the same year; a negative annual result is floored at zero and cannot be carried to another year. Costs are generally not deductible, with an exception for interest on Box 3 debts. From 2026, own use of a second property can also produce an addition to actual return. Check Belastingdienst’s actual-return rules before comparing methods, especially if you own property.

Box 2: substantial company ownership

A substantial interest generally means holding at least 5% in a company, directly or indirectly, alone or with your fiscal partner. Rules also cover relevant share classes and rights; check the details rather than looking only at the total percentage on a brokerage screen. Box 2 taxes dividends and disposal gains from that interest. Ordinary investments outside these rules generally fall in Box 3.

See the official Box 2 rules.

Example D: a €10,000 dividend from a Dutch BV

This is a separate full-year Dutch-resident shareholder who owns 10% of the ordinary shares in a Dutch BV. Assume a €10,000 gross dividend, no other Box 2 income or losses, no partner allocation and a general credit already reduced to zero by other income. The table shows only the Box 2 component, not their complete personal tax bill.

The €1,500 withheld and €950 remaining together cover the €2,450 personal Box 2 liability. They are not two separate final taxes. Dutch dividend withholding can be credited in the same year’s income tax return; see Belastingdienst’s substantial-interest income guidance. Company corporation tax is not included in this example.

Foreign accounts and investments still need attention

Dutch residents generally report worldwide income and relevant assets. Tax treaties and other rules may provide double-tax relief, but an overseas account is not automatically outside the return. Whether you transfer the money to the Netherlands is not the deciding test. The main questions are tax residence, income or asset type, treaty treatment and any valid transitional election. See the official foreign-income guidance. Move-year and cross-border cases need a calculation beyond these full-year examples.

Pending Box 3 changes: position on 7 October 2026

The following are proposals, not enacted rules. They do not replace the 2026 figures used above.

The cabinet’s 29 September 2026 letter, pages 4–5 proposed a shift towards taxing realized capital gains, with financial instruments targeted for 2028 and remaining assets, including crypto, targeted for 2030. This concerns when gains in asset value are taxed; dividends and interest are income, so holding an investment without selling does not mean all its returns escape tax. The letter also proposed transitional changes:

The legislative calendar records cabinet agreement and referral to the Council of State (Raad van State) on 2 October. The Senate update published on 6 October reports the discussion on 5 October and the urgent request for advice, expected in late October. In that discussion the minister explicitly said the proposed asset-exemption limit was not final, so €30,846 must not be treated as a confirmed 2027 threshold.

The original bill passed the lower house on 12 February, but the Senate vote was deferred pending the amendment. Neither a target year nor lower-house approval means the revised system is already law.

Turn the tax estimate into a rental budget

Start with the salary calculator to estimate employment take-home pay. Then set aside any additional Box 2 or Box 3 tax, taking account of amounts already withheld or prepaid. Finally, subtract your living costs beyond rent. This gives you a more useful housing budget than applying one tax percentage to your gross salary or treating an investment balance as spendable income.