Payroll tax and payroll tax return

If you run a business and employ staff, you will need to deal with payroll taxes and withholding taxes. Two terms that are often used interchangeably. ‘Loonbelasting’, known as payroll tax, is an advance levy on income tax. Withholding taxes are government-imposed deductions (taxes) that are paid by the employee and the employer. A portion of these taxes is withheld from the employee’s wages, and a portion is paid by the employer. Are you an entrepreneur with personnel, or a director and major shareholder looking for advice on this area? Then you’ve come to the right place. We’ll help you right away!

What are payroll taxes?

Payroll taxes are withheld from employees’ salaries and – as previously mentioned – are an advance payment for income tax. Employers withhold this component of their employees’ salaries, and pay it to the Tax Administration. This way, staff only need to pay a small amount of income tax – if any – at the end of the year.

What are withholding taxes?

Withholding taxes include the following taxes:

  • Wage tax
  • National insurance contributions: State Pension (AOW)/Surviving Dependents Act (Anw)/Long-Term Care Act (Wlz)/Child Benefits (AKW)
  • Employed person’s insurance contributions: Sickness Benefits (ZW)/Invalidity Benefit (WAO)/Capacity for Work (WIA)/Unemployment Insurance (WW)
  • Income-dependent contributions pursuant to the Health Care Insurance Act (Zvw)

As a business owner, you thus pay a portion of the salary to the employee (net wages), and a portion to the Tax Administration (employer’s share). The gross wages are the sum of these two shares.

Payroll tax return

Entrepreneurs must file the payroll tax return, and pay it, on time. When you file this return, you must provide certain details to the Employee Insurance Agency (the UWV) and/or the Tax Administration. This process is likely to be something you’ll need to do every month, and outsourcing this job to the experts could save you time and money. Would you like help in dealing with your payroll taxes? Get in touch. Our in-house specialists will be glad to help out.

Who are we?

NAHV Belastingadviseurs is the finance and accountancy firm where you can ask the questions you never dared to ask. We specialise in tax and administrative solutions, and financial advice for (creative) entrepreneurs. We have over 3,500 regular clients ranging from artists, to journalists, architects and many other professionals and companies in the creative and cultural sector, as well as lawyers, independent contractors in the construction sector, physiotherapists and countless other professions. Whether you’re a freelancer or self-employed professional, director and major shareholder of a private limited company or a general partnership, we help everyone.

Our office has served Amsterdam and the surrounding area for 25 years. We have in-house experts, work as a team, take a proactive approach, and can keep the costs manageable.

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