Taxing Wages 2024

Netherlands

Abstract

This chapter includes data on the income taxes paid by workers, their social security contributions, the family benefits they receive in the form of cash transfers as well as the social security contributions and payroll taxes paid by their employers. Results reported include the marginal and average tax burden for eight different family types.

Methodological information is available for personal income tax systems, compulsory social security contributions to schemes operated within the government sector, universal cash transfers as well as recent changes in the tax/benefit system. The methodology also includes the parameter values and tax equations underlying the data.

 

 

The national currency is the Euro (EUR). In 2023, EUR 0.96 was equal to USD 1. In that year, the average worker earned EUR 62 281 (Secretariat estimate).1

1. Personal Income Tax System (Central Government)

1.1. Central government income tax

There are three categories (‘boxes’) of taxable income:

• Taxable income from work and owner-occupied housing.

• Taxable income from a substantial interest in a limited liability company.

• Taxable income from savings and investments.

This description is limited to the most relevant aspects of taxable income from the first category, ‘taxable income from work and owner-occupied housing’, because of its relevance for the AW.

1.1.1. Tax unit

Husbands and wives are taxed separately on their personal income, which includes income from business, profession and employment, pensions and social security benefits. Certain parts of income may be freely split between husbands and wives, such as the net-income from owner occupied housing and the income from savings and investments.

1.1.2. Tax allowances

1.1.2.1. Standard allowances

1.1.2.2. Non-standard allowances applicable to AW

Related to wage earnings:

• For distances of more than 10 km for a single journey between home and work, fixed amounts for travel expenses with public transportation are deductible. The maximum deduction for employees who travel by public transport is EUR 2 354 for distances of more than 80 km. If the travel expenses are reimbursed or the employer provides transport, there is no deduction; the reimbursement is untaxed (also for employees who travel by car) if it is below certain specified amounts.

• Employee contributions to private (company provided) pension schemes.

• Related to owner occupied housing:

  • Excess of mortgage interest over net imputed rent.

• Related to personal circumstances:

  • Medical expenses and other exceptional expenses: Fiscal deduction of exceptional health expenses is reduced to the specific costs as a result of a chronic illness. As specific costs are seen medical treatment (not paid for by insurance company), diet costs, special medicine described by a doctor, extra domestic care, special expenses for clothing and transportation costs. Visual tools and insurance premiums are not seen as specific costs and are therefore not deductible. Expenses for wheelchairs, scooters for the disabled and home adjustments made because of a chronic illness are not deductible.

    • All expenses except for medical treatment expenses may be increased by a factor. This factor is income and age dependent. The factor amounts to 1.4 if the person is below the legal pension age and has an income on or below EUR 38 703. The factor amounts to 2.13 if the person is on or above the legal pension age and has an income on or below EUR 38 703. People with an income above EUR 38 703 cannot apply the factor.

    • For a single person: the specific expenses (after multiplication with the factor) in excess of 1.65% of income are deductible if income exceeds EUR 8 603 and is below EUR 45 695. If income is lower than or equal to EUR 8 603, the non-deductible limit is EUR 149. For a person with a partner: the joint income is used to determine the non-deductible amounts and the non-deductible limit is EUR 298.

    • If income exceeds EUR 45 695 the specific expenses in excess of 1.65% of EUR 45 695 increased with 5.75% of income above EUR 45 695 are deductible.

    • Donations to certain institutions (charity) that serve the public good are deductible if in excess of 1% of the income and in excess of EUR 60. No more than 10% of the income may be deducted in this way. For periodic donations the threshold of EUR 60 does not apply. A maximum of EUR 250 000 in periodic gifts may be deducted each year.

1.1.3. Tax schedule

The tax schedule for income from work and owner-occupied housing is as follows:

 

Taxable Income (EUR)	Tax Rate (%)	Social security contributions
		< 66 years and 10 months	> 66 years and 10 months
0–37 148	9.28	27.65	9.75
37 149–73 031	36.93	-	-
73 032 and over	49.50	-	-

The contributions for the general social security schemes are levied on income from work and owner-occupied housing in the first- and second-income tax bracket. These social security contributions are not deductible for income tax purposes. Individuals above the pension age pay 9.75% (for widows and orphans pensions, and exceptional medical expenses). Individuals below the pension age pay 27.65%, (for widows and orphans pensions, exceptional medical expenses, and old age income provision). For further information see Section 2.1.

1.1.4. Tax credits

1.1.4.1. Standard tax credits

The tax credits are deducted partly from the income tax liability and partly from the contributions that are made to the general social security schemes (see Section 1.13). For most families, the share of the credit attributed to tax is related to the ratio of the tax rate to the sum of the tax rate and the social security contributions rate in the first bracket of the tax schedule. In 2023, this ratio was 25.13% (= 9.28% / (9.28% + 27.65%), implying that 25.13% of the (tax) credit is attributed to the personal income tax and the remaining 74.87% to social security contributions.

Division of credits for tax and social security contributions is essential in the OECD publications. In the Netherlands no division is made in the general tax scheme between tax and SSC.

Note that the tax/benefit position tables show the total amount of social security contributions net of the credits that are claimed.

• General tax credit: The general tax credit is dependent on income since 2014, meaning that higher incomes receive less general tax credit. Since 2016, the general tax credit is fully phased out, meaning that higher incomes receive no general tax credit. In 2023, the maximum of the general tax credit is EUR 3 070 when no reduction is applicable (people who are on or above the legal pension age receive less general tax credit, because they do not pay social contributions for the state pension) and taxable income is below or equal to EUR 22 660. For incomes above this threshold, the general tax credit is fully phased out at a rate of 6.095% (per euro). So, incomes above EUR 73 031 receive no general tax credit.

• Work credit: The amount of work credit depends on taxable income from work and is phased in on three trajectories; the first one runs from EUR 0 to EUR 10 741. On this first trajectory, work credit equals 8.231% of taxable income from work. On the second trajectory, which runs from EUR 10 741 to EUR 23 201, the work credit equals EUR 884 plus 29.861% of the part of income that is above EUR 10 740. On the third trajectory, which runs from EUR 23 201 to EUR 37 691, the work credit equals EUR 4 605 plus 3.085% of the part of income that is above EUR 23 201. So, at an income of EUR 37 691, the maximum of EUR 5 052 is reached. Above this income of EUR 37 691, the work credit is fully phased out at a rate of 6.510% (per euro) so that incomes above EUR 115 295 receive no work credit.

• Income dependant combination credit: A taxpayer who is either a single parent and working or the working partner with the lowest income, and who has children below the age of 12 and has his/her taxable income from work exceeding EUR 5 547, is entitled to an income dependent combination credit of 11.45% of taxable income from work above EUR 5 547. The maximum total combination credit is EUR 2 694 and reached at an income level of EUR 29 076.

• Single parent credit: abolished since 2015.

• Additional single parent credit: abolished since 2015.

• Elderly tax credit: individuals above the pension age receive a tax credit of EUR 1 835 if their income is below EUR 40 889. This tax credit is gradually phased out to 0 at a rate of 15.0% for incomes from EUR 40 889. Individuals above the pension age who do not have a partner receive an additional tax credit of EUR 478 that is not income dependent.

The amount of the tax credit is limited to the amount of tax and premiums payable (non-refundable tax credit). Before 2023, if , a taxpayer with insufficient income to fully exploit his/her tax credit had a partner with a surplus of tax and premiums payable over his/her own tax credit, the tax credit of the former taxpayer is increased by (at most) the surplus tax and premiums payable by his/her fiscal partner. Consequently, the tax credit of the former taxpayer will exceed tax and premiums payable, resulting in a payout of the residual tax credit to the taxpayer by the tax authority. This regulation has gradually been phased out since 2009. As of 2023 the payout of the residual tax credit has ended for households where the partner with the lowest income is born after 1962. Only partners with the lowest income born before 1963 are still eligible for a payout of the general tax credit with a maximum of EUR 3 070 in 2023.

1.2. State and local income taxes

None.

2. Compulsory Social Security Contributions to Schemes Operated Within the Government Sector

2.1. Employees’ contributions

General schemes (for everyone earning income from (former) employment)

• Old age pension: The age is adjusted such that elderly will receive Old Age (state) pension at the age of 66 years and 10 months old in 2023 and at 67 years old in 2024. The Old age premium percentage is 17.9% of taxable income in the first tax bracket. This scheme does not apply to individuals above the current pension age.

• Widows and orphans pension: 0.10% of taxable income in the first tax bracket.

• Long-term care: 9.65% of taxable income in the first tax bracket.

Schemes for employees:

• Unemployment: employees do not have to pay an unemployment premium in order to reduce administration costs. Employers pay both an unemployment premium and a premium for invalidity for their employees (see par.2.2).

• For basic health insurance each adult pays an average amount of EUR 1 657 a year to a self-chosen private health insurance company. This premium is a non-tax compulsory payment, and it is not included in the Taxing Wages calculations but only in the NTCP calculations.

• Employees might obtain compensation for the nominal contribution of on average EUR 1 657 for the basic health insurance, depending on the household’s personal situation and taxable income. This is called the health care benefit. This benefit is included in the NTCP calculations as it compensates for the basic health insurance premium of on average EUR 1 657 (see www.oecd.org/ctp/taxingwages for more details on non-tax compulsory payments as well as the Special Feature in the 2009 edition of the Taxing Wages Report). The care benefit is calculated as follows:

  • Single parent households: 1889 – 0.123% * 25 070 – 13.64% * (taxable income – 25 070)

  • Married couples: number of adults * 1889 – 2.3795% * 25 070 – 13.64% * (taxable income principal and spouse – 25 070).

2.2. Employers’ contributions

Schemes for employers:

• Unemployment: on average 3.89% of gross earnings below EUR 66 956 for the general unemployment fund. The actual premium depends on the type of contract: for fixed contracts, the low premium of 2,64% applies. For other (temporary) contracts, the high premium of 7,64% applies.

• Invalidity: 8.90% of gross earnings below EUR 66 952.

• For medical care employers contribute 6.68% of gross earnings net of employees’ pension premiums and unemployment social security contributions until a maximum of gross earnings of EUR 66 956. This contribution is modelled as a NTCP from the employer to the Health Care Fund. The spending of this fund mainly compensates private insurance companies for their (public) obligation to insure individuals with a high health risk.

3. Universal Cash Transfers

3.1. Transfers related to marital status

None.

3.2. Transfers for dependent children

Families with children receive a tax-free benefit, depending on the number and age of the children. For a family with two children in the age group of 6 to 12 years, the total benefit amounts to EUR 2 574 a year.

An additional income dependent child benefit exists (kindgebonden budget). This benefit also depends on the number of children per family. A family can only claim the extra child benefit when it has children under the age of 18 years old for whom it also receives the tax free and income independent child benefit. The maximum value is EUR 1 653 per year for families with one child in 2023. The maximum value is EUR 3 185 a year for families with two children. The benefit is reduced at a rate of 6.75% per euro when the family’s yearly taxable income exceeds a threshold. Since 2020 this threshold is different for single parents and couples. For single parents the threshold equals EUR 25 070, for couples it equals EUR 43 397. As from 2015 an extra benefit for single parents is introduced (independent of the number of children and the age of the children) which amounts to EUR 3 848 in 2023. This amount is also phased out at a rate of 6.75% from the threshold. Therefore, this total benefit is completely phased out for families with two children when the taxable income exceeds EUR 129 263 for single parents and EUR 90 583 for couples.

4. Main Changes in the Tax/Benefit Systems Since 2000

In 2001, the tax system was changed thoroughly. The tax rates have been lowered; the basic allowance and its supplements have been transformed into tax credits. The deduction for labour costs has also been replaced by a tax credit. Certain other deductions have been reduced or abolished. Extra tax credits for households with children were introduced.

In 2002 and 2003 the tax system was only slightly changed. The additional combination credit was introduced in 2004. The various child credits were integrated and streamlined in 2006.

Public insurance for medical care has been reformed in 2006. A new standard health insurance system was introduced. Until 2005, no public health insurance contributions were levied on income in excess of EUR 33 000. However, taxpayers earning more than EUR 33 000 were obliged to take a private insurance. These private health insurance contributions were not included in the Taxing Wages calculations because they were made to a privately managed fund (and are therefore not taxes). Since 2006, every individual contributes a nominal contribution to a privately managed fund (on average EUR 1 064, depending on the competition between insurance companies, a year in 2009) and, in addition for employees, a percentage of gross income (6.9%) net of employees’ pension premiums and unemployment social security contributions until a maximum of gross income of EUR 32 369 (in 2009). For this last contribution, the employee receives mandatory compensation of his employer for the same amount. The premium itself, however, is not modelled (either as an employee or employer SSC) in Taxing Wages. Instead, it is modelled as a non-tax compulsory payment from the employer to a public-managed health insurance fund. The spending of this fund mainly compensates private insurance companies for their (public) obligation to insure individuals with a high health risk. Taxpayers might obtain compensation for the nominal contribution to the private insurance company of on average EUR 1 064 in 2009, depending on the households personal situation and taxable income. This is called the health care benefit and is part of the NTCP (see Section 2.1).

In 2007, the tax system has not been changed, except for some parameter updates. In 2008, the child credit has been replaced by an extra child benefit.

In 2009, the general tax credit will be reduced for non-working spouses in order to cut down the capitalization of this tax credit in 2024. A non-working spouse can in 2024 capitalise the general tax credit only against his/her own earned income. In 2009 the employment credit is extended for income exceeding EUR 42 509. This credit will be reduced by maximum EUR 24, whereas the employment credit is increased for lower incomes. The income dependant combination credit is introduced in order to promote the labour participation of single parents or partners of married workers. The income-dependent combination credit has been increased considerably. The extra child benefit depends on the total income of the family and the number of children per family. The income-dependent child benefit is higher when more children under the age of 18 years are member of the family. As from 2009 onwards, employees do not have to pay an unemployment premium mainly to reduce administration costs for employers. Employers pay now both an unemployment premium and a premium for invalidity for their employees (see also par. 2.2).

In 2013, the income base for SSC and Income-Tax is harmonised. Standardising or harmonisation of the income tax base for levying SSC and Taxes is introduces in 2013 and is called the Law “WUL” i.e., Harmonising the income base for SSC and Taxes (see publication CPB the Netherlands). So, the income tax base is since 2013 exclusive the income dependant health care contribution and employees will no longer have to pay taxes over income dependant health care contributions, instead they pay a higher tax rate in the first tax bracket and mainly Work credit is adjusted. The tax rate in the first tax bracket has been increased from 1.95% to 5.85% and the Work credit is reduced for employees with a higher income such that the effect of this harmonisation is budgetary neutral.

The main adjustment in 2014 is the General tax credit which is made income dependent. Higher income will receive less general credit and the reduction is 2% per euro of income between EURO 56 495 and EURO 19 645 per year. See also par 1.141.

In 2015, the child arrangements are reduced from 10 items to 4 items. For that reason, Single parent credits have stopped. Cash transfers for parents with children and low-income increase. And for single parents with children an extra cash benefit of EUR 3 050 is introduced to compensate the loss of single parent credits.

Not all child arrangements are part of the TW model because these are quite specific arrangements for disabled children and parents with low income with children.

Long term health care is modernised. The SSC rate for (AWBZ Dutch) reduced with 3% to 9.65% of taxable income. The tax rates in the first two brackets are raised with 3% because social spending is still used but now for other general social purposes.

In 2016, as part of a EUR 5 billion package of tax reductions on work, the general tax credit and the work credit were phased out fully, meaning that higher incomes no longer receive the general tax credit and the work credit.

Multiple tax credits were increased and made more income dependent in 2019. The working credit is increased but phased out at a faster rate of 6% (instead of 3.6%). The combination credit starts at EUR 0 instead of EUR 1 052 but increases with 11.45% instead of 6.159%. The elderly tax credit has been increased and is now gradually phased out at a rate of 15%, instead of a sudden drop of more than EUR 1 300 above a threshold income. Also, a first step has been made to unify the tax rates in the first three brackets.

In 2020, the number of tax brackets has been reduced from four to three. For people below the retirement age there are effectively only two different brackets since their combined rate of tax and social security contributions is the same in the first and second bracket. Secondly, a new phase in trajectory has been introduced for the work credit. Thirdly, the threshold after which the income dependent child benefit is phased out is now higher for couples than for single parents.

4.1. Changes to labour taxation due to the COVID pandemic in 2020 and 2021

The covid-19 pandemic has not led to changes in labour taxation for employees. Employers and self-employed do have the option to postpone payment of labour taxes. Also, some of the requirements for self-employed to qualify for certain deductibles (e.g., a minimum number of hours to qualify for a self-employed deduction) have been temporarily loosened.

5. Memorandum Items

5.1. Identification of the AW and calculation of the AW’s gross earnings

The calculation of the annual gross earnings of an AW is based upon data on gross earnings of full-time workers in industry C-K. These data have been obtained through a yearly sample survey carried out by the Central Bureau of Statistics. Included in the AW annual salary are irregular payments, such as holiday allowances, loyalty payments and bonuses. Payments for working overtime are not included. However, the CBS has stopped carrying out the ‘employment and wages’ survey in July 2006 due to new legislation. On Inquiry at the Central Bureau of Statistics (CBS) the information from the wage declarations by employers, delivered nowadays at the tax department, will be implemented by the CBS for the new survey about employment and wages. These changes produced a delay in delivery of the information on wages and employment for 2006.

On the base of new information on wages per industry sector, the AW is delivered to EUROSTAT in November 2009 by the CBS for years 2006 and 2007. The standard classification NACE Rev. 1 for industrial sectors C-K is used.

The new classification NACE Revision 2 (sectors B-N) will be applicable as from 2008 onwards. The estimation of the AW for 2008 according to the new classification is applicable at the beginning of May 2010. The AW for 2009 is available since November 2010. For 2008 the average annual gross earnings (full-time NACE REV 2) comes to EUR 43 146, for 2009 EUR 44 412, and EUR 45 215 in 2010. The latest information according to Eurostat is an AW in 2011 of EUR 46 287 (NACE Rev 2).

No new data is found on EU site http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database.

The average wages from 2012 onwards include the private and the public sectors, since values on the private sectors only (sectors B to N) are not available. The values were provided by Statistics Netherlands.

5.2. Main employers’ contributions to private pension, health and related schemes

In addition to the obligatory contributions of employees to private insurance companies, all employers pay contributions to a public-managed health fund. More information is included in the Special Feature where the contributions to the public-managed health funds are also presented.

Employers have to pay at least 70% of the gross wage of their sick employees for two years. Many employers have insured themselves privately for the risks of their employees being sick. This insurance for illness of their employees is not compulsory.

2023 Parameter values

 

Average earnings/yr	Ave_earn	62 281	Secretariat estimate
minimum wage	min_wage	25 463
Social security contributions	SSC_ceil	66 956
Employees' schemes	Unemp_rate1	0
	Unemp_franchise1	0
Medical care	Med_rate	0.0668
	Med_limit	999999
	Med_ceil	66 956
	Med_adult	1649
	Med_child	0
	Med_compensation1	0.00123
	Med_compensation2	0.13640
	Med_compenation 3	0.02378
	Med_compensation 4	0.13640
	Med_key	25070
	Med_adult for care benefit	1889
General schemes	Old_rate	0.179
	Wid_rate	0.001
	Ex_med_rate	0.0965
	Gen_Schemes_thrsh	37 149
	Unemp_empr1	0.0389
	Unemp_empr2	0
	Unemp_unempr_franchise1	0
	Unemp_unempr_franchise2	0
	Inv_empr_rate	0.0890
	Inv_empr_franchise	0
	Med_empr	0.0668
	Med_franchise	0
Payroll tax	Extra_wage_tax	0
	EWT_threshold	0
Tax schedule	Tax_sch	0.0928	22 660
	"tax_sch_lowest"	0.0928	37 149
	"tax_thrsh_1"	0.3693	73 031
	"tax_sch_2"	0.495
Tax credits	Gen_credit_1	3070
	Gen_credit_2	0
	Gen_credit1_thr	22660
	Gen_credit2_thr	73 031
	Gen_credit_per	0.06095
	Red_gen_credit	0
	Emp_credit1	884
	Emp_credit2	3721
	Emp_credit3	447
	Emp_credit4	0
	Emp_credit1_thr	10 740
	Emp_credit2_thr	23 201
	Emp_credit3_thr	37 691
	Emp_credit4_thr	115 295
	Comb_credit	0
	Comb_credit_franchise	5547
	add_comb_credit	0
	income_dependant_comb_credit1	0
	income_dependant_comb_credit_max	2694
Family cash transfers	income_dependant_comb_par_credit_per	0.1145
	Sing_par_credit	0
	Ex_sing_par_credit_per	0
	Ex_sing_par_credit_max	0
	Ch1_trans	1287
	Ch2_trans	2574
	Child_ben_1child	1653
	Child_ben_2children	3185
	Extra_cash_sing_par	3848
	Child_ben_redn	0.0675
	Child_ben_ceil	25 070
	Child_ben_incr_ceil_couple	18 327
Non-tax compulsory payments	dummyNTCP	0
	NTCP_pension_ee	0.0810
	NTCP_pension_er	0.1216
	NTCP_pension_franchise	15 859
	NTCP_pension_max	128 810

2023 Tax equations

The equations for the tax system in the Netherlands in 2022 are repeated for each individual of a married couple. Tax credits, except a part of the general credit of the spouse, depend also on the tax paid by the principal if the spouse's income is zero or very low, and the cash transfers are calculated only once. The functions which are used in the equations (Taper, MIN, Tax etc) are described in the technical note on the tax equations. Due to adjustments of the work credit in 2016 and 2020, the function Emp_credit(Value) was altered in those years. Variable names are defined in the table of parameters above, within the equations table, or are the standard variables “married” and “children”. A reference to a variable with the affix “_total” indicates the sum of the relevant variable values for the principal and spouse. And the affix “_spouse” indicates the value for the spouse. No affix is used for the principal values. Equations for a single person are as shown for the principal, with “_spouse” values taken as 0.

 

	Line in country table and intermediate steps	Variable name	Range	Equation
1.	Earnings (gross)	gr_earn
	Earnings (net)	earn	B	gr_earn
2.	Social security contributions	SSC_al	B	SSC_f(earn,Unemp_rate1,SSC_ceil,Unemp_franchise1)
3.	Credits in taxable income	taxbl_cr	B	MIN(earn-SSC_al, Med_ceil)*Med_rate
4.	CG taxable income	tax_inc	B	earn-SSC_al
5.	CG tax before credits	CG_tax_excl / tax_liable	B	Tax(tax_inc,Tax_sch)
6.	Tax credits	tax_cr	P	MIN(CG_tax_excl+SSC_taxinc,IF((tax_inc<Gen_credit1_thr),Gen_credit_1,(Gen_credit_1-MIN(Gen_credit_per*(Gen_credit2_thr-Gen_credit1_thr),Gen_credit_per*(tax_inc-Gen_credit1_thr))))+Emp_credit(tax_inc)+IF(AND(Children>0,tax_inc>Comb_credit_franchise),IF(Married='0,income_dependant_comb_credit1+MIN(income_dependant_comb_credit_max-income_dependant_comb_credit1,income_dependant_comb_par_credit_per*(tax_inc' - Comb_credit_franchise)),0)
		tax_cr_spouse	S	IF(Married>0,MIN(CG_tax_excl_spouse+SSC_taxinc_spouse+CG_tax_excl+SSC_taxinc-tax_cr,IF(tax_inc_spouse>0,IF((tax_inc_spouse<Gen_credit1_thr),Gen_credit_1,(Gen_credit_1-MIN(Gen_credit_per*(Gen_credit2_thr-Gen_credit1_thr),Gen_credit_per*(tax_inc_spouse-Gen_credit1_thr)))),Red_gen_credit)+Emp_credit(tax_inc_spouse)+IF(AND(Children>0,tax_inc_spouse>Comb_credit_franchise),income_dependant_comb_credit1+MIN(income_dependant_comb_credit_max-income_dependant_comb_credit1,income_dependant_comb_par_credit_per*(tax_inc_spouse - Comb_credit_franchise)),0)),0)
		tax_cr_inc	B	=tax_sch_lowest/SUM(Old_rate+Wid_rate+Ex_med_rate+tax_sch_lowest)*tax_cr_spouse
7.	CG tax	CG_tax	B	tax_liable-tax_cr_inc
8.	State and local taxes	local_tax	B	0
9.	Employees' soc security' based on earnings	SSC_earn	P	SSC_f(earn,Unemp_rate1,SSC_ceil,Unemp_franchise1)
		SSC_earn_spouse	S	SSC_f(earn_spouse,Unemp_rate1,SSC_ceil,Unemp_franchise1)
	Based on taxable income	SSC_taxinc	B	(Old_rate+Wid_rate+Ex_med_rate)*MINA(tax_inc,Gen_Schemes_thrsh)
	Total employees' soc security	SSC_liable	J	SSC_earn+SSC_taxinc+SSC_earn_spouse+SSC_taxinc_spouse
		tax_cr_SSC	B	=SUM(Old_rate+Wid_rate+Ex_med_rate)/SUM(Old_rate+Wid_rate+Ex_med_rate+tax_sch_lowest)*tax_cr_spouse
	Total	SSC	J	SSC_liable-tax_cr_SSC
10.	Total payments	total_payments	J	CG_tax+local_tax+SSC
11.	Cash transfers	cash_trans	J	IF(Children=1,Ch1_trans,IF(Children=2,Ch2_trans,0))+ IF(Children=2;1;0)*MAX(0;(Child_ben_2children+IF(Married='0;1;0)*Extra_cash_sing_par-IF((tax)inc+tax_inc_spouse)>Child_ben_ceil+IF(Married=1;1;0)*Child_ben_incr_ceil_couple;1;0)*Child_ben_redn*(tax_inc+tax_inc_spouse-(Child_ben_ceil+IF(Married=1;1;0)*Child_ben_incr_ceil_couple))))
13.	Employer's soc security	SSC_empr	B	SSC_f(earn-(positive(earn-NTCP_franchise*MIN(earn/min_wage,1))*NTCP_pension_ee),Unemp_empr1,SSC_ceil,Unemp_unempr_franchise1)+SSC_f(earn-(positive(earn-NTCP_franchise*MIN(earn/min_wage,1))*NTCP_pension_ee),Unemp_empr2,SSC_ceil,Unemp_unempr_franchise2)+SSC_f(earn-(positive(earn-NTCP_franchise*MIN(earn/min_wage,1))*NTCP_pension_ee),Inv_empr_rate,SSC_ceil,Inv_empr_franchise)
				Function Emp_credit(Value) If Value <= 0 Then Emp_credit = 0 ElseIf Value <= Range("Emp_credit1_thr").Value Then Emp_credit = (Value / Range("Emp_credit1_thr").Value) * Range("Emp_credit1").Value ElseIf Value <= Range("Emp_credit2_thr").Value Then Emp_credit = Range("Emp_credit1").Value + ((Value - Range("Emp_credit1_thr").Value) / (Range("Emp_credit2_thr").Value - Range("Emp_credit1_thr").Value)) * Range("Emp_credit2").Value ElseIf Value <= Range("Emp_credit3_thr").Value Then Emp_credit = Range("Emp_credit1").Value + Range("Emp_credit2").Value + ((Value - Range("Emp_credit2_thr").Value) / (Range("Emp_credit3_thr").Value - Range("Emp_credit2_thr").Value)) * Range("Emp_credit3").Value ElseIf Value <= Range("Emp_credit4_thr").Value Then Emp_credit = Range("Emp_credit1").Value + Range("Emp_credit2").Value + Range("Emp_credit3").Value - ((Value - Range("Emp_credit3_thr").Value) / (Range("Emp_credit4_thr").Value - Range("Emp_credit3_thr").Value)) * (Range("Emp_credit1").Value + Range("Emp_credit2").Value + Range("Emp_credit3").Value - Range("Emp_credit4").Value) Else Emp_credit = 0 End If End Function

Key to range of equations B calculated separately for both principal earner and spouse P calculated for principal only (value taken as 0 for spouse calculation) J calculated once only on a joint basis.

Note

← 1.  The Dutch labour market is characterized by a substantial share of part-time employees. As explained in the methodological section of this volume, the average wage measure used in the tax burden calculations refer to full-time employees only. If the wages of part-timers were taken into account, the average wage would be substantially lower.