Payroll tax is tax and other contributions that are withheld from an employee’s salary by the employer, which saves the employee from having to pay them later as income tax.

The payroll tax levy is made up of tax on your salary (wage tax or loonbelasting) and national insurance contributions for pensions, unemployment allowance and other Dutch benefits and allowances.

Your payroll tax is deducted from your salary every month. It's important for expats to keep the deduction in mind when discussing salary and employment contract terms for a new job.

There is a large difference between your gross salary (bruto salaris) which includes tax, and your net salary (netto salaris), after tax is deducted.