How it works
Dutch income tax has three boxes. Box 1 is for income from work and home. This includes salary from a job or from your own BV, profit from a sole proprietorship, benefits and pensions. The deemed income from the house you live in is also in box 1.
Box 1 has brackets. In 2026 the rates are 35.75% up to €38,883, 37.56% up to €78,426 and 49.5% above that. People at state pension age pay a lower rate in the first bracket, because they pay fewer social contributions.
Tax credits are deducted from the tax you pay. Everyone gets the general tax credit. People who work also get the labour tax credit. Both credits become smaller when income rises. As a result, the tax rate on extra income is higher than the bracket rate.
For a director-major shareholder (DGA), box 1 applies to the salary. Profit kept in the BV is taxed with corporate income tax, and dividend is taxed later in box 2. The total tax depends on how the DGA divides the money between salary and dividend.
Example
A DGA pays herself €58,000 in 2026. The first €38,883 is taxed at 35.75%, the rest at 37.56%. She deducts the general tax credit and the labour tax credit. The BV also withholds the income-related healthcare contribution (Zvw). Her net salary is about €40,300 a year. You can find the exact figure with the DGA salary calculator.
The figures
Every rate for 2026 is listed in Netherlands tax rates 2026, and the figures for 2027 are in Netherlands tax rates 2027.
Questions people ask
Does mortgage interest still lower box 1 income?
Yes. Interest on the mortgage of the house you live in is deductible in box 1, at a capped rate. You also declare a deemed income for that house.
In which box is the profit of a BV taxed?
The profit of a BV is outside the boxes, because the BV pays corporate income tax on it. Only the salary that the DGA receives is taxed in box 1. Dividend is taxed in box 2.
Holdwise, Hoofddorp. We keep this definition in line with our Dutch and German glossaries, and the figures are those for the tax year 2026. Updated 30 September 2026.
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