Payroll Tax Credit

Here you choose to have the payroll tax credit applied or not.

The employer deducts payroll taxes from your wages. Wage taxes is the collective name for wage tax/national insurance contributions, employee insurance contributions and the income-related contribution to the Health Insurance Act. For the deduction, an employer must register your personal data.


You make the choice yourself whether the employer should apply a payroll tax credit?

If you choose Yes, this means that the employer must apply a payroll tax credit. The employer will then deduct less wage tax/national insurance contributions from your wages.

If you choose No, this means that the employer will not take the payroll tax credit into account, so more wage tax/national insurance contributions will be deducted from your wages.


Do you have multiple employers at the same time?

You can only apply this discount at one employer at a time. You usually do this on the highest income.


If you do not provide correct information.

If you do not - or incorrectly - provide your personal details, the employer must withhold 52% wage tax/national insurance contributions. This is the highest tax rate. In addition, the employer must calculate the employee insurance premiums and the income-related healthcare insurance contribution over your entire wage. This also applies if you do not identify yourself.


Payroll tax credit and provisional assessment

Are you going to work and do you receive the general tax credit each month from the Tax Authorities in the form of a provisional assessment? And do you have the payroll tax credit applied by the employer? Then you must immediately change or stop this provisional assessment. Otherwise you may get too much tax credit, because the employer will already settle (part of) the general tax credit with your wages. If you have received too much, you must repay this amount to the tax authorities.


Please note!

If you do not use the payroll tax credit now, you can reclaim any excess tax paid after the end of the calendar year via your income tax return/national insurance contributions.