Payroll tax reduction; Yes, with a discount and Yes, without a discount. What is the difference?

When you are employed by a company, you pay tax on the income you receive. This is also called payroll tax. The payroll tax is calculated based on various aspects; the hourly wage, the number of hours you work and your age. The more you earn, the more payroll tax you ultimately pay. Your employer does take the general tax credit and employment tax credit into account. These discounts fall under the payroll tax credit. By applying a payroll tax credit, you receive a discount on the payroll tax you pay. This means you pay less tax on your wages and ultimately have more left over.

If you have multiple employers, it is important to remember that you can only apply the payroll tax credit to 1 employer. It is best to do this with the employer where you work and earn the most. Do you work for multiple employers in a certain period and do you have the payroll tax credit enabled for all of them? You will then have to pay this back when you file your tax return. If you have paid too much payroll tax because you do not owe it to anything, you will of course also get this money back when you file your tax return!

Updated on: 06/06/2024