Self-employed professionals in paid employment

Payroll tax and payroll tax credit

You will receive a salary from your employer and you will have to deal with payroll taxes and payroll tax credits. Before you start working for your new employer, you need to complete the Model Declaration of payroll tax data (in Dutch). Payroll tax includes wage tax and national insurance contributions and is an advance on your income tax.

With a payroll tax credit, you have 2 choices: your employer will either apply the payroll tax credit to your salary or not. The payroll tax credit consists of a general tax credit and an employment tax credit. If you opt for the route through your employer, less wage tax and fewer national insurance contributions will be deducted. You will have more salary paid out that way. If you do not let your employer take care of the payroll tax credit, it will be settled with your income tax return. You will therefore always receive the tax credits to which you are entitled.

You only get a payroll tax credit with 1 employer at a time. Are you employed by several employers at the same time in addition to your sole proprietorship? Then you only apply for the payroll tax credit from 1 employer.

Salary in your private account

YYour salary from employment is separate from your income from your business. So, have your salary deposited into your private account and not into your business account. If you also use your private account for your company, open a separate account for your salary. This way you can easily separate the different cash flows.

Higher-income tax bracket

Does your total income from your company plus your income from employment exceed €75,518? Then you enter the higher income tax bracket of 49.50%. For income up to €75,518, the income tax rate is 36.97% (rates 2024, non-pensioners).

Hours criterion income tax

If you start working as an employee, you will probably have less time to devote to your own business. This can have consequences for the entrepreneur allowance. Therefore, determine whether you are still entitled to the entrepreneur's deduction. And if so, how many hours you can work as an employee without losing the right to entrepreneur allowance. 

You are entitled to an entrepreneur allowance if your income from your business is recognised as profit from the business. Entrepreneur allowance consists of private business ownership allowance and possibly tax relief for new companies. You must work at least 1,225 hours per calendar year in your own company. Have you been working as a self-employed person for longer than 5 years? Then you must spend more time on your business each year than on your paid work.

Small businesses scheme and turnover tax

For the delivery of many products and services, you must charge your customer turnover tax (VAT). What if your turnover remains below €20,000 per year? Then you can opt for the small businesses scheme (KOR). Then you do not charge VAT to your customer, but you will also not be able to reclaim VAT on purchases and costs.

You may apply the small business scheme as long as your annual turnover remains below €20,000. This can be beneficial if, for example, you provide services to private individuals who cannot deduct VAT. Your profit margin will increase at the same sales price. Or you can adjust your rate downwards, so that both you and your customer benefit.

You can end participating in the KOR at any time. If your turnover exceeds €20,000, you must immediately stop participating in the KOR.

Do you have many business customers? In the KOR you cannot reclaim VAT on purchases and business expenses. Your purchase price will be higher because you include VAT. If you want to maintain the same profit margin, you will have to increase the sales price excluding VAT. This will make your product more expensive and less interesting for your customer.

Will your turnover exceed €20,000 again? If so, the KOR will end and you will have to charge and pay VAT. Read more about the conditions of the KOR.

Checklist KOR

Our KOR checklist video explains the small business scheme and will help you decide if the scheme is right for you. 

Avoid false self-employment

Find a job with an employer who is not also your client. This can make it seem as if you are actually an employee and not a freelancer. This is called false self-employment and you want to avoid it.

Agreements with your employer

Make agreements with your employer about your availability. This helps you avoid difficult situations. Do you work fixed days per week or can you determine your working hours yourself? And are you allowed to take a limited number of business calls, for example? Are your activities for your new employer an extension of the activities for your own company? In that case, make agreements with your employer about assignments that you may or may not accept for your own company. Include in the negotiation whether there will be a non-compete clause or a non-solicitation clause in your employment contract. Such a clause can limit your work as a self-employed professional. It can also provide clarity so that you know where you stand.

Help with reorientation

Not sure which job to look for? Then you can get help from a regional mobility team (RMT) to reorient towards paid employment. This help can consist of career advice, retraining, and practical learning. There are 35 RMTs spread throughout the Netherlands.

Self-employment next to paid employment

Is your situation the other way around: you are now in paid employment and you also want to work as a self-employed professional? That is possible. Discuss with your employer whether they allow you to work as a freelancer for other clients. Check whether you have signed a non-compete or non-solicitation clause. If so, pay close attention to what it says and adjust your work as a self-employed professional accordingly. Because of your extra income, you can end up with a higher income tax rate. Discover what part-time entrepreneurship means.