Earning tax-free for students and other part-timers

Earning tax-free almost sounds too good to be true. But this is the case for most students and people with a part time job, because they often don’t earn as much as the tax-free threshold.

Over your salary you usually pay income tax. Your employer automatically deducts this from your gross income, because your employer is obliged to withhold Income Tax and Social Insurance Contributions. But there is also a Payroll tax reduction (loonheffing korting) to which you are entitled to.

For the year 2019 you could earn up € 7.098,- tax-free

When comparing these tax credits/ reductions with the income tax that you have paid, it could possibly be that you have paid too much. This means that you will receive a tax refund for the amount you have paid too much in income tax for that year, through your employer.

Total gross income € 7.098,00
General tax credits*€ 2.477,00
Employed person’s tax credits**€ 124,50
Total tax credits€ 2.601,50

*  This concerns the general tax credit (algemene heffingskorting) for 2019

.** This concerns a person’s tax credit (arbeidskorting) and depends on age and income.

Example: With a total taxable income of € 7.098,- you fall under tax bracket 1 and you pay 36.65% tax on your gross income. In this case, that is € 2,601.42 in tax. If you deduct the tax paid (€ 2,601.42) from the amount of tax credits (€ 2,601.50), you will come to zero and you can get this amount back from the tax office.

As a student, if you earn around or less than € 7,098 per year, it might be worth to fill out an annual income tax return form from the belastingdienst (called a Tj billet) in order to get back the excess tax paid! Tip: You can claim tax back up to 5 years.

At Topsitters our sitters are responsible for filing their own income and tax at the end of each year, which means that you can earn up to € 7098,- tax free per year and if you go beyond this amount you will need to pay normal taxes

It is always good to make a tax return at the end of the year with the tax office. To make sure you have paid enough tax or if have not yet reached the threshold, you will perhaps get a refund.

On request, Topsitters can send an overview of all worked hours and earnings.

How much can you earn in addition to the study financing?

The limit for additional income next to your study financing in 2019 is € 14,682.96. This means your aggregate income or taxable wage. As you approach the limit for additional income, you must stop your student loan and public transportation travel card.

Source: https://duo.nl/particulier/studiefinanciering/bijverdienen.jsp

Forms or link Belastingdienst income tax return: https://www.belastingdienst.nl/wps/wcm/connect/nl/werk-en-inkomen/content/ik-heb-een-bijbaantje-of-vakantiebaantje-kan-ik-geld-terugkrijgen