#Federal tax brackets 2021 over 65 plus

In 2018, the retirement age in the Netherlands was postponed from 65 years and 9 months to 66 years. The discount of 17.9% of the income in these brackets corresponds to the AOW contributions, which are not owed by the AOW beneficiaries. In 2019, the corresponding tax rates are 18.75% and 20.20%. If the value of an owner-occupied dwelling would be positive (fixed rentable value is greater than interest) it is changed to zero.įor taxpayers above the official retirement age reduced rates apply for the first two brackets. This is an important factor, since interest on a mortgage can easily be over a thousands euros per month, which is subtracted from income before any income tax is applied. Based on the value of the dwelling, a 'fixed rentable value' is counted, while interest for the mortgage is deductible.

#Federal tax brackets 2021 over 65 plus

The conditions concern the type of life annuity and the necessity, based on the principle that the higher the income is, the more pension plus life annuity one needs to build up for the future, up to a maximum.įor the value of an owner-occupied dwelling and for mortgage debt related to that, this box and not box 3 applies. Under certain conditions a life annuity is treated as a pension: premiums are deducted from the income, the benefits are taxed, and the scheme is not counted as asset in box 3. Additionally, there are income-dependent deductions and tax credits for incomes up to €90,710 which decrease the effective tax rate. Mathematically, apart from discretization (whole euros both for income and for tax), the tax is a continuous, convex, piecewise linear function of income.īox 1 Tax Rate Brackets (2010–present, under pension age)įor people above the pension age, the social security component is reduced. Thus there are tax brackets, each with its own tax rate.

There is a progressive tax on wages, social security benefits and pensions. There are three categories of income, each with their own tax rates.

The system integrates the income tax with fees paid for the general old age pension system ( AOW), the pension system for partners of deceased people ( ANW), and the national insurance system for special medical care ( WLZ). Before May 1 citizens have to report their income from the previous year. The fiscal year is the same as the calendar year. Income tax in the Netherlands (personal, rather than corporate) is regulated by the Wet inkomstenbelasting 2001 (Income Tax Law, 2001).