Taxation after employees

[lamante]

Hi,

 

I am considering to establish a company in the Netherlands but the information I found on the website of Belastingdienst is somewhat unclear for me. I would like to know exactly how much tax should a company pay after an employee. I found a payroll tax calculator (Nettoloon 2015 berekenen) on the web, which clearly shows what is the net salary after taxation. In my home country we distinguish two kinds of taxes; 1. tax that is allocated for the employee, and 2. tax that is allocated for the employer (practically both kinds are deducted from the gross wage and paid by the employer to the tax authority).

 

This makes me confused a little bit because according to the Nettoloon 2015 berekenen calculator I only see one type of taxation; Loonheffing. Is this mean that you do not have this (employee-employer) distinction in the Netherlands but only have one "big" tax which includes everything?

 

Or do I have to calculate with anything else extra that a company has to pay besides Loonheffing?

 

Thank you for your feedback!

 

Met vriendelijke groet,

 

Lamante

 

 

[Marjan]

I'm not familiar with the exact calculation but count on approximately 20-25% on top of the employee's salary for employers taxation.

[4711]

The total salary cost is higher than just the gross salary, depending on the branch the employer is in (and if there is a pension scheme involved). Probably (average) around 25-30% (up to 50% if the pension is an expensive one).

 

Just to give you an idea, that’s all.

 

[Joost Rietveld]

Dear Lamante

 

Sadly there is no guideline or rough percentage. The amount of employer expenses has so many variables that even a rough estimate is impossible.

 

First it depends on the gross annual salary. Next are influences such as the sector the company is active in, whether or not a collective labour agreement is mandatory, pension plans mandatory or not and what other amounts (i.e. reimbursement of expenses or travel compensation) the employer is paying to the employee.

 

All in all the percentage of employer expenses on top of the employees gross salary can range from 5% to about 35% of the gross salary.

 

But I am guessing that this does not quite answer your question as you are also mentioning the net salary.

 

In NL there is taxation at the source. Wage taxes. This is a percentage of the gross annual wages. This percentage can range from nothing to 52%.

 

For you as an employer it is good to know that you should always engage an employment contract based on a gross salary! That way you are not liable for tax influences which make up the gap between net and gross.

 

The gross salary (including other expenses as mentioned at the start of my post) is tax deductible for the (corporate) income tax. That´s your tax benefit as an employer.

 

The employee receives his/her net salary. Annually he/she needs to file an income tax return in which he/she states the gross annual income. The Tax Offices calculates his/hers income tax and deducts the wage taxes which his/her employer has withheld on his/her salary.

 

This is in short our system.

 

Best advice I can give you is to contact a wage tax expert and ask him/her a calculation based on your wishes and expectations with regards to the employee you are willing to engage into a contract with.

 

Best of luck.

Joost