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1.1ÌýÌýÌýÌý Introduction: overview of the domestic payroll system

The Netherlands is officially known as the Kingdom of the Netherlands and consists of 12 provinces, of which only two, Noord-Holland and Zuid-Holland form Holland.

The tax year follows a calendar year, and the final tax period ends on 31 December.

Income tax in the Netherlands is regulated by the Wet inkomstenbelasting 2001 (Income Tax Act, 2001).

Companies can process their own payroll or appoint an outsource payroll agent to manage the administration. Companies can process their own payroll by means of own software or manually by using the wage tax tables published by the tax administration.

However, the company remains legally liable for any mistakes. A detailed payroll guide in Dutch is downloadable from the website Handboek Loonheffingen 2024 (Wage Taxes Handbook).The most important changes for 2024 are included in the Nieuwsbrief Loonheffingen 2024 (Newsletter Loonheffingen 2024).

Businesses are required to submit reports electronically (see eHerkenning Reporting system at 1.2) to the tax authorities using a specific software tool. This is only available