What is Income Tax For?
Income tax is a government levy on the income earned by individuals and businesses. For freelancers, it's based on your net profit (total revenue minus deductible expenses).
Why do we pay income tax?
- Funds public services – Supports healthcare, education, public safety, and more.
- Maintains infrastructure – Roads, bridges, and public facilities rely on tax revenue.
- Supports social programs – Funds pensions, unemployment benefits, and social security.
- Ensures economic stability – Helps balance public finances and government operations.
Simply put: Income tax helps fund essential services that benefit everyone.
Who needs to submit an Income Tax Return?
If you live or work in the Netherlands and earn income, you must file a tax return. This applies to:
👨💻 Freelancers & Self-Employed – Anyone running their own business.
👩💼 Employees – Salaried workers and those with side income.
💰 Other Income Earners – If you receive taxable income from any source.
With Xolo, you don’t have to worry! Our accountants take care of your income tax filing for you.
When must the Tax Return be submitted?
Deadline: May 1 (every year) – Avoid late fees by submitting on time.
With Xolo, you're covered if you have the Full plan! * We ensure your tax return is prepared and filed well in advance, so you never have to worry about missing deadlines. If you need an extension, we’ll take care of it for you.
*In case you have the Standard plan, you can also purchase it as an Add-on
When do I have to pay (or not)?
Your tax payment depends on your final tax calculation:
✔️ If you owe €57 or more → You must pay the tax.
✔️ If you’re due a refund of €19 or more → You’ll get money back.
❌ If your amount is below these thresholds → No payment or refund is required.
📌 Xolo makes it simple: We handle all calculations and let you know exactly what to do.
How is Income Tax calculated?
Step 1: Determine your Taxable Income
- Revenue – Total earnings from your freelance work.
- Minus Expenses – Deduct allowable business costs (office supplies, travel, etc.).
- Minus Deductions – Apply eligible tax deductions (e.g., self-employed deduction).
Step 2: Apply the Tax Rates (2024)
- Up to €75,518 → 36.97% tax
- Above €75,518 → 49.50% tax
Step 3: Calculate Your Final Tax Due
- Apply the correct tax rate to each portion of your income.
- Add up the amounts from both brackets.
Stay Updated! Tax rates change yearly. If in doubt, contact hulp@xolo.io—we're happy to help!
With Xolo, our accountants handle all these calculations for you, ensuring your tax return is accurate and filed on time.