2025 Income tax rates for taxpayers below the statutory retirement age
Taxpayers who have not reached the statutory retirement age (Algemene ouderdomswet, AOW) at the beginning of 2025, can expect the following tax brackets to be applied in 2025.
2025 Income tax
| Box 1 |
Tax.inc. more than (€) |
but not more than (€) |
2024 rate (%) |
|
Tax bracket 1
|
|
38,441
|
35.82%
|
|
Tax bracket 2
|
38,441
|
76,814
|
37.48%
|
|
Tax bracket 3
|
76,814
|
|
49.50%
|
2024 Income tax
| Box 1 |
Tax.inc. more than (€) |
but not more than (€) |
2024 rate (%) |
|
Tax bracket 1
|
|
38,098
|
36.97%
|
|
Tax bracket 2
|
38,098
|
75,518
|
36.97%
|
|
Tax bracket 3
|
75,518
|
|
49.50%
|
These percentages include national social insurance contributions. A different rate structure applies for those who qualify for fewer or no national insurance contributions.
Take note!
The combined rate adjustments for the years 2026 to 2029 are:
|
First bracket |
Second bracket |
|
2026
|
-0.22%
|
0.03%
|
|
2027
|
-0.09%
|
0.03%
|
|
2028
|
-0.15%
|
-0.10%
|
|
2029
|
-0.05%
|
-0.05%
|
2025 Income tax rates for old-age pensioners
Taxpayers who have reached the statutory retirement age (Algemene ouderdomswet, AOW) at the beginning of 2025 and were born after 1946, are expected to have the following tax brackets applied in 2025.
2025 Income tax for old-age pensioners (AOW)
| Box 1 |
Tax.inc. more than (€) |
but not more than (€) |
2025 rate (%) |
|
Tax bracket 1
|
|
38,441*
|
17.92%
|
|
Tax bracket 2
|
38,441
|
76,814
|
37.48%
|
|
Tax bracket 3
|
76,814
|
|
49.50%
|
* Born before 1946: tax bracket 1 up to €40,502
2024 Income tax for old-age pensioners (AOW)
| Box 1 |
Tax.inc. more than (€) |
but not more than (€) |
2024 rate (%) |
|
Tax bracket 1
|
|
38,098*
|
19.07%
|
|
Tax bracket 2
|
38,098
|
75,518
|
36.97%
|
|
Tax bracket 3
|
75,518
|
|
49.50%
|
* Born before 1946: tax bracket 1 up to €40,021
These percentages include national social insurance contributions. A different rate structure applies for those who qualify for fewer or no national insurance contributions.
Changed tax credits
Below are the expected tax credits for 2025. With the exception of the elderly person’s tax credit and the single elderly person’s tax credit, these are tax credits for taxpayers who are younger than the statutory retirement age. For people older than the statutory retirement age, lower limits apply.
| Tax credits |
2025 (€) |
2024 (€) |
|
General tax credit max.
|
3,068
|
3,362
|
|
Employed person's tax credit max.
|
5,599
|
5,532
|
|
Income-dependent combination tax credit max.
|
2,986
|
2,950
|
|
Young disabled person’s tax credit
|
909
|
898
|
|
Elderly person's tax credit
|
2,035
|
2,010
|
|
Single elderly person's tax credit
|
531
|
524
|
|
|
|
|
The scale down of the general tax credit is matched to the statutory minimum wage (Wet minimumloon en minimumvakantiebijslag, WML). As a result, taxpayers with income up to the WML-level will retain the maximum tax credit.
Tax relief for transport as healthcare costs
Transport costs for obtaining medical assistance and devices may be deducted as healthcare costs. For sake of ease, it is proposed to assume €0.23 per kilometre when travelling by car (not by taxi). For other forms of transport, such as a taxi or public transport, the actual costs remain deductible. In addition, for excessive transport costs due to sickness or disability, a deduction of €925 per annum is proposed, provided that the taxpayer can convincingly prove that they are unable to walk more than 100 metres independently, in accordance with rules for a disabled parking card and the public transport companion card.
Tax solution for single earners
Without additional measures, the income of some single earner households is below the social minimum due to a combination of schemes. The proposed solution is to partially pay the general tax credit that is unused or not fully used to the least-earning partner whose date of birth is on or after 1 January 1963. In the process, a number of additional conditions must be met. This measure could possibly only be introduced as from 1 January 2028. So, for the years 2025 to 2027, a temporary concession is provided by the municipality to this type of household.
Take note!
This measure requires, among other things, that the gross household income is below €48,500 per annum. This is an estimated amount for the year 2028.
Simplification of objection to benefits
An objection to the amount of an established benefit will in future also be an objection to the corresponding recovery decision which is notified in the same letter. An objection to a recovery decision will in future also be an objection to the corresponding set amount of a benefit which is notified in the same letter. This improves legal certainty for citizens and reduces the administrative burden.
Take note!
These measures do not apply if the objection indicates that objection is only made against determining the benefit or the recovery decision.
Visits to persons requiring long-term nursing
In order to deduct travel expenses for visits to persons requiring long-term nursing, the visitor must have a joint household with the nursed person at the inception of the illness or disability. In certain cases, such assessment date may be considered unreasonable. It is therefore proposed, to change that assessment date so that, at the inception of the nursing process, it is assessed whether the visitor had a joint household with the person requiring the nursing. That date is also easily verifiable for the Tax Administration based on the Personal Records Database.
Box 3: rules for effective yield
New legislation is being introduced with rules for determining the effective yield in box 3. These rules are necessary because the Supreme Court has decided that if the effective yield in box 3 is lower than the notional yield, tax should be levied on the effective yield. The new rules are relative to the years since 2017 and are important for taxpayers with box 3 income who can rely on the rulings by the Supreme Court.
Take note!
The intention is to introduce the new rules as at 1 June 2025.
Box 3 exemption: compensation for earthquake damage
An exemption will apply in box 3 for reparation of earthquake damage in Groningen and Drenthe and similar property rights. This change will not yet be reflected in the provisional 2025 income tax assessment. The exemption does not apply to compensation for damage paid out in cash.
Tip
This special box 3 exemption will partly be applied with retroactive effect to 1 July 2020 and partly be applied with retroactive effect to 1 July 2023.
Remission profits and allowances
On remission of a business debt, the entrepreneur will have a profit. For income tax purposes, that profit is exempt or the profit is offset against deductible losses. For allowances, however, no account is taken of deductible losses. In this situation, remission may result in either no entitlement or a lower entitlement to allowances, which is undesirable. In such situations, therefore, at the taxpayer’s request, the benefits do not take remission profits into account which are not fully exempted from income tax due to losses to be offset.
Take note!
This is a specific scheme and does not mean that other income on paper can also be disregarded for the allowances.
Allowance partnership age
Currently, parents and adult children or foster children over the age of 27, are considered as allowance partners. This may result in lower allowances in the event of cohabitation. It is therefore proposed to abolish the age limit of 27 for first-degree blood relatives and relatives by marriage when determining allowance partnerships.
Take note!
The Tax Administration applies the age limit of 27, which means that first-degree blood relatives and relatives by marriage remain partners for tax purposes, but are no longer an allowance partner for benefits.
