End of year bonus: How are taxes calculated?

The end of the year is approaching, and for many people that means not just holidays and Dutch treats, but also a welcome end-of-year bonus or 13th month salary. However, excitement can quickly turn to surprise when you see how much tax is deducted. "Why do I pay so much tax on my bonus?" is a question employees often ask. Don't worry, we'll explain exactly how the end-of-year bonus Netherlands calculation works.

Understanding the 13th month and the special tax rate

Unlike your regular income, your end-of-year bonus falls under the 'special rate' (bijzonder tarief). This is a special method of taxation that the Dutch Tax Authority uses for all income you don't receive every month, such as:

• Holiday allowance
• Bonuses and commissions
• Overtime pay
• Payout of unused vacation days
• And of course: a 13th month or end-of-year bonus

What is this special rate? Can't all wage tax simply be calculated in one way? Here's how it works: The wage tax your employer withholds each month is actually an advance payment on your annual income tax. You don't officially pay tax every month, but every year (think of the tax return you have to file every March).

The Dutch Tax Authority tries to align this advance payment - the wage withholdings - as closely as possible with what you ultimately have to pay in tax on your total annual income. Otherwise, you'll face a large additional payment after your tax returns, or the Tax Authority will have to refund a lot to you. To make this alignment as accurate as possible, your payslip shows an estimate of your annual income (jaarloon BT), with an associated rate (tarief BT).

Why does the tax on your end of the year bonus seem so high?

The tax on your end-of-year bonus doesn't just seem high - in many cases, it is high. This is because the 13th month is a bonus that comes on top of your total annual income. While your regular monthly salary is taxed at an average rate (because part of it falls into lower tax brackets), this isn't the case for special income. When your 13th month is paid out, this entire bonus falls into the highest tax bracket of your income.

Why not just get more salary instead of a 13th month?

Since your end-of-year bonus is taxed so heavily, many people think it would be more lucrative if your employer simply gave you a higher salary. However, as we learned above: At the end of the day, you pay exactly the same amount of tax on your annual income. Even if you received a nice salary increase now, the extra money you'd earn would be taxed at just as high a rate as your end-of-year bonus.

End of year bonus Netherlands calculation example

To make this clear, we've created a calculation example using our handy gross-net calculator. We'll take someone earning a gross salary of €4,000 in 2025 as an example. This person receives a salary increase of €500. How is this salary increase taxed?

In this example, you can see that €851.75 in wage tax is calculated on the total salary of €4,000. That's 'just' 21.29%. On the salary of €4,500, a total of €1,105.42 in wage tax is calculated, which is a larger portion of your total gross salary with 24.56%.

But here's the key point: Looking at the €500 difference, we see that the employee nets less than half - just €246.33. On this portion of the salary, 50.73% is withheld in wage tax. This percentage roughly corresponds to the special rate of 50.33% (37.48 + 12.85) that would be withheld from this employee's end-of-year bonus.

This shows that the highest segment of your salary is taxed heavily. Normally you probably don't notice this, but when special income like the end-of-year bonus is paid out, this suddenly becomes visible through the special rate wage tax.

Can you get the tax back?

We understand you're wondering if you can get this money back. Unfortunately, the answer is no. The fact that your 13th month is taxed more heavily than your regular salary is because this bonus falls into the highest tax bracket of your income - and that's not an error that can be corrected.

How to make the most of your end of year bonus

Now that you know you pay more tax on your 13th month, you can plan smartly:

1. Plan ahead. Calculate how much you'll receive net
2. Make a plan for your net amount. Consider saving or paying off debts

Extra tip for employers 🌟

You're not obligated as an employer, but try to prepare your employees for their end-of-year bonus. Explain why they pay more tax and the reasoning behind it. This prevents an employee from eagerly expecting a full extra month's salary and feeling 'cheated' as a result.

No hassle with end of year bonus Netherlands calculations

Calculating tax on end-of-year bonuses seems complicated. With Nmbrs, you can easily create a payslip. With the interactive payslip, Nmbrs automatically calculates the correct percentages, always applies current tax rules, and makes the calculation transparent.

So you can focus on what really matters: celebrating a successful year!