This measure is a proposal in the 2027 Tax Plan that the cabinet submitted on Budget Day, 15 September 2026, and parliament may still change it. Budget Day 2026 and the Dutch 2027 Tax Plan lists all measures in one table.
The labour tax credit
The credit is built from four parts and rises fast at low incomes, reaching its maximum at €45,592 in 2026 (€5,685) and at €47,834 in 2027 (€5,889). Above that phase-out point it drops by 6.51 cents for every extra euro until it reaches zero (2026: €132,920; 2027: about €138,300), which works as an extra tax on each additional euro. In 2027, income between €47,834 and €80,578 pays about 51% on every extra euro, made up of 38.16% tax, 6.51% less labour credit and about 6.35% less general tax credit. Between €80,578 and about €138,300 the combined rate is 49.5% plus 6.51%, about 56%. For an entrepreneur the profit after deductions counts as income from work, and for a director-shareholder the salary from the company.
| Income from work | Labour tax credit 2026 | 2027 |
|---|---|---|
| €30,000 | about €5,400 | about €5,600 |
| €45,000 | about €5,670 | about €5,900 |
| €58,000 (customary salary) | about €4,900 | about €5,270 |
| €100,000 | about €2,140 | about €2,530 |
| €140,000 and above | €0 | €0 |
The limited inflation correction
Every year the tax office raises the bracket thresholds, the credits and dozens of other amounts by the inflation rate, using the table correction factor (tabelcorrectiefactor). For 2027 the cabinet applies only 48% of the correction, a factor of 1.01248 in place of 1.026, and it also changes the brackets themselves. The first threshold becomes €39,247, compared with about €39,900 under a full correction. The Tax Plan froze the 49.5% threshold at €78,426, but under the memorandum of amendment of 20 October 2026 the threshold is €80,578 in 2027 and the freeze starts in 2028. For someone earning €80,000 whose salary rises 2.6%, the frozen threshold meant about €2,000 more income taxed in the top bracket than with a full correction, or over €200 of extra tax a year, and the €80,578 threshold removes this extra tax in 2027. The limited correction applies to every bracket and every credit, and the effect adds up over the years. The state gains about €1.5 billion in 2027 and €3.4 billion a year in the long term, money that goes to defence.
Higher incomes pay more
The Tax Plan froze the 49.5% threshold at €78,426 and limited the inflation correction to 48%, and the memorandum of amendment of 20 October 2026 lets the 49.5% rate start at €80,578 in 2027. The figures for higher salaries are based on the Tax Plan of 15 September 2026. The elderly credit drops by €100 to €1,993. For a director-shareholder on the customary salary of €58,000 the effect is small, because the labour tax credit rises from about €4,880 to about €5,230, more than the extra tax. With a salary of €120,000 you pay about €30 more in 2027 than in 2026, and about €250 more compared with a full inflation correction. From about €139,000 you pay about €420 a year more than in 2026. At €120,000 the tax rate on a bonus is the same in both years, so paying it in 2026 saves tax only if the bonus takes your income above €132,920.
For a founder who brings the company or themselves to the Netherlands, the 2027 brackets decide the tax on the salary, and setting up a BV in the Netherlands from abroad covers the company itself.
You can have your salary, dividend and holding set-up checked against these rates, with the amounts for your own company. See written advice for foreign entrepreneurs with a Dutch company.
What it means for you
Employees see a higher labour tax credit directly in their net salary, because the employer applies it in the monthly payroll, while a freelancer sees it in the 2027 tax return or in a lower provisional assessment. A director-shareholder on €58,000 is in the phase-out, with a credit of about €5,230 in 2027 compared with about €4,880 in 2026, or about €350 more, while the second bracket rate becomes 38.16%. Under the memorandum of amendment of 20 October 2026, the 49.5% rate starts at €80,578 in 2027. The wealth planner 2027 shows the credits for each year, based on the figures from the 2027 Tax Plan, and the DGA salary in 2027 has the rate tables.