General Tax Credit (Algemene Heffingskorting)

Key Takeaways

The general tax credit (algemene heffingskorting) is a discount on your income tax that every Dutch taxpayer receives.
In 2026, the maximum credit is €3,115 per year.
The credit phases out as your income rises above €29,736. At high incomes, the credit reaches €0.
Your employer applies this credit automatically through your monthly payroll if you ticked "yes" on the loonheffingskorting form.
If you have a non-earning or low-earning tax partner, they can transfer their unused credit to you.

What Is the General Tax Credit?

The algemene heffingskorting is the most fundamental tax credit in the Dutch system. Unlike a deduction (which reduces your taxable income), a credit directly reduces the amount of tax you owe. Think of it as a discount applied at the end of the tax calculation.

Every person who pays income tax in the Netherlands is entitled to this credit. It does not matter whether you are employed, self-employed, or retired. If you are a tax resident, you qualify.

heffingskorting

How Much Is It Worth? (2026 Rates)

The general tax credit is not a fixed amount. It depends on your taxable income (belastbaar inkomen) in Box 1.

Income Range	Credit Amount
Up to €29,736	€3,115 (maximum)
€29,736 – €78,426	Decreases by 6.398% of income above €29,736
Above €78,426	€0

What Does "Phases Out" Mean?

For every euro you earn above €29,736, the credit decreases by approximately €0.064. This means someone earning €50,000 loses a significant portion of the credit, and someone earning €78,426 or more receives nothing at all.

Example: General Tax Credit at Different Income Levels

Gross income€ 35.000

Income tax-€ 12.939

Tax credits+€ 7.939

Net income€ 30.000

Effective tax rate14.3%

Worked Examples

Annual Gross Income	General Tax Credit	Effective Benefit
€25,000	€3,115	Full credit
€40,000	€2,458	€3,115 − (€40,000 − €29,736) × 6.398%
€50,000	€1,818	€3,115 − (€50,000 − €29,736) × 6.398%
€65,000	€858	€3,115 − (€65,000 − €29,736) × 6.398%
€78,426	€0	Fully phased out

Good to know

The phase-out means that people with higher incomes effectively pay a higher marginal tax rate. If you earn between €29,736 and €78,426, the 6.398% phase-out adds to your marginal tax rate on top of the regular bracket rate. This is an important but often overlooked detail when calculating your true tax burden.

How It Works in Practice

Through Your Employer (Monthly)

If you are employed and you ticked "yes" on the loonheffingskorting form, your employer applies the general tax credit (and the labour tax credit) directly to your monthly payroll. This means:

Less tax is withheld each month
Your net salary is higher
You do not need to wait until you file your tax return to receive the benefit

The monthly credit is approximately €260 (€3,115 ÷ 12) at the maximum level, but it decreases as your income rises throughout the year.

Warning

You can only apply the loonheffingskorting at one employer. If you have two jobs and both employers apply the credit, you will receive double the credit during the year and owe money when you file your tax return. Always tick "no" at your second employer.

Through Your Tax Return (Annual)

If you file an annual tax return, the Belastingdienst (Dutch Tax Authority) calculates the exact credit you are entitled to based on your actual annual income. If too much or too little was withheld during the year, the difference is settled through the tax return.

Part-Year Residents

If you moved to the Netherlands partway through the year, your general tax credit is proportional to the number of months you were a Dutch tax resident. For example, if you arrived on July 1, you receive roughly 6/12 = 50% of the full credit.

This pro-rating applies automatically when you file your tax return for the year of arrival or departure.

Tax Partner and the General Tax Credit

The general tax credit has a special rule for tax partners (fiscaal partners). If your partner has little or no income, they cannot fully use their own general tax credit — after all, you need to owe tax to benefit from a credit.

In this situation, the unused portion can be transferred to you as the higher-earning partner, effectively increasing your combined credit. This transfer is called the uitbetaling van de algemene heffingskorting.

However, this transferability has been gradually reduced over the years and is now limited. From 2023 onward, the transferable amount is capped and continues to decrease. For the latest amount, check the Belastingdienst website.

Tip

If your partner does not work or earns very little, always file a joint tax return (or at least ensure both partners file). This allows the Belastingdienst to calculate the transferable credit. Without filing, the unused credit is simply lost.

General Tax Credit vs Other Credits

The general tax credit is just one of several tax credits in the Dutch system. Here is how they compare:

	General Tax Credit	Labour Tax Credit
Who qualifies	—	—
Maximum (2026)	—	—
Phases out at	—	—
Applied via payroll	—	—
Transferable to partner	—	—

Historical Rates

The general tax credit changes each year. Here are recent values for reference:

Year	Maximum Credit	Phase-Out Start	Phase-Out Rate
2024	€3,362	€24,813	6.630%
2025	€3,068	€25,073	6.337%
2026	€3,115	€29,736	6.398%

Common Mistakes

Applying loonheffingskorting at two employers — This doubles the monthly credit and leads to a tax bill when you file your return.
Not filing a tax return when your partner does not work — The unused general tax credit of a non-earning partner is lost if neither partner files.
Assuming the credit is the same for everyone — The credit varies significantly depending on your income. High earners receive €0.
Forgetting about part-year pro-rating — Expats who arrived mid-year sometimes expect the full annual credit.