Payroll tax – National insurance premiums
Payroll tax is a difficult matter for many entrepreneurs and private individuals, while there are so many opportunities for the entrepreneur. It goes without saying that you do not file an incorrect tax return, apply prohibited tax constructions or keep a sloppy administration. When you delve into tax matters, or receive expert tax advice on tax regulations and laws, there are important benefits to be gained and you are protected against sanctions, fines, legal proceedings and the like.
Our reliable expert tax specialists, who all have years of experience, see every opportunity. We turn these opportunities into benefits for our customers and protect them. Often this has immediate results, so that the financial position improves. All our tax specialists have years of experience and the mr. title.
What is payroll tax?
Taxes withheld from an employee's wages are payroll taxes. It is also called a withholding tax on income tax. An employer pays these withheld taxes to the tax authorities. If one has no further sources of income, then the payroll tax that has been paid is directly the final levy for that year. The payroll tax is then the tax that is paid and income tax does not apply.
Obligations of the employer concerning an employee for the tax authorities
An entrepreneur has contact with the tax authorities and with the employee for payroll tax. As an entrepreneur, you are, as it were, an intermediary. The employer must ensure that the correct amount is paid monthly for the employee to the tax authorities. As an entrepreneur, you do this by submitting a payroll tax return. As soon as an employee is hired, he must be registered with the tax authorities. This registration must be done before the employee starts working on the first day. In addition, an employer is obliged to keep a payroll administration. The employee must receive a payslip every month and receive an annual statement every year for filing the income tax return. A payslip must include how one got from the gross salary to the net salary. An annual statement must include how much gross salary the employee has received this year and how much must be paid in taxes and contributions.
Payroll tax
Payroll tax is an income tax. The payroll taxes are shown below:
- Payroll tax;
- Employee insurance premiums (WAO/ZW/WW/WIA);
- National insurance contributions (Anw/AOW/WIz/AKW); and
- Income-related contribution to the Health Insurance Act (Zvw).
All these levies together are included in one rate of payroll tax, which must be paid. The rate of payroll tax is as high as the rate for income taxes because of that payroll tax as a withholding tax money for income tax. In this way, these taxes are in line with each other.
Two payroll tax rates
There is a progressive tax system with two brackets and associated rates.
For a taxable income up to € 73,032, a rate of 36.93% applies.
For a taxable income from € 73,032, a rate of 49.50% applies.
Tax credits
In addition, some tax credits must be taken into account in addition to the payroll tax due. As with the rates, the same tax credits apply as with income tax. It concerns the following discounts:
- General tax credit;
- Employment tax credit;
- Elderly discount and single parent discount; and
- Young disabled discount.
Calculation of payroll tax
To calculate the payroll tax due, the following calculation must be made.
- Payroll tax due on taxable wages - Payroll tax credit = Payroll tax due.
National insurance contributions are only paid by taxpayers who have not yet reached retirement age.
Untaxable allowances: work costs scheme or WKR
In addition to paying wages, the employer may provide untaxable allowances to an employee. This is arranged through the work cost scheme. (WKR). An employer has the freedom to determine what he wants to provide. Any items from which the employee benefits privately may also be provided tax-free. However, there is a limit to this provision. The extent to which this can be done tax-free depends on the wage bill that is paid.
Up to a wage bill of € 400,000, 1.7% tax may be reimbursed free of charge.
From a wage bill of € 400,000, 1.18% tax may be reimbursed free of charge.
Untaxable allowances employee separate from the work costs scheme or WKR
There are also certain benefits in kind that are free of tax and fall outside the WKR. These are generally work costs that are necessary for performing the work. These may be provided outside the WKR without payroll tax. This concerns the following matters:
- Courses and training, incl. all travel costs.
- Provisions for the Working Conditions Act.
- Study costs
- Costs for a temporary stay, for example hotel costs and meal costs.
- Transport costs necessary for work up to a maximum of € 0.19 per km.
- Costs for tools, mobile equipment and computers necessary for carrying out work.
Questions from entrepreneurs about payroll tax
The following questions that we regularly receive from entrepreneurs about payroll tax:
- Can I include a travel allowance of my employee in the flat rate for the WKR?
- How can I avoid paying a final levy for the work cost scheme (WKR)?
- What about an appeal procedure following a wage check?
- Does the addition for the private use of a company car count towards the payroll tax
- What about the remittance reductions?
- How much company deduction is my company entitled to?
There are many other tax questions and issues asked to our tax specialists than the above regarding payroll tax. You can also submit all these questions to us. We provide clarity and solve your tax issue or question.
Why a tax specialist from AGA Fiscalisten with payroll tax?
AGA Fiscalisten stands for high-quality expert tax advice. All our tax specialists are senior tax specialists, have years of tax experience, and have graduated from the university in tax law and hold the title "mr.".
A (senior) tax specialist specializes in tax law while a tax advisor has only completed tax courses. A tax advisor has much less knowledge than a tax specialist and often makes mistakes with potentially significant financial consequences. It is wise not to settle for a non-qualified tax advisor, but to engage an expert senior tax specialist. This way you avoid problems, fines or procedures and you do not miss out on tax benefits due to advice that is not sufficiently expert.
High quality tax specialist; Master title mr. and years of experience
All our tax specialists have years of tax experience and the "mr." title. The most recent developments and changes concern taxation and all relevant legislation is studied and discussed by our tax specialists. This gives us the opportunity to clarify all the problems and issues about taxation. We achieve the best possible result for our customers. Tax advice, tax returns, financial advice, legal advice or discussion partner, AGA Fiscalisten will arrange it for you!
Contact AGA Fiscalisten
The tax specialists of AGA Fiscalisten can do a lot for you, from an answer or advice to your tax questions to guidance throughout the entire process. If you have any questions or issues and would like high-quality tax advice, please contact one of our expert experienced tax specialists for an intake interview free of charge and without obligation.
NEED TAX ADVICE? Call: 040-8489888 1st free and non-binding intake interview. Available by phone: Monday to Friday between 09.00h and 20.00h) We can also be reached by e-mail: info@agafiscalisten.nl or via the contact form on the right side of our website.
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