Box 1 Income Tax for Expats in the Netherlands

Box 1 is the box that touches almost every expat: it covers your salary, the deemed value of owning your home, your mortgage interest deduction, and (if you do it on the side) your freelance profit. The structure is simpler than most countries — two brackets and a small number of deductions — but the details around home ownership and the 30% ruling do the heavy lifting on your eventual liability. This page covers the brackets, the deductions that actually matter, and the points where Brainport and Arnhem-Nijmegen tax filings most often go wrong.

At a glance — key facts

  • Box 1 covers salary, freelance profit, pensions and the deemed value of your home.
  • 2026 brackets (residents): roughly 35.70% up to €78,426 and 49.50% above.
  • Mortgage interest on your primary residence is deductible against Box 1.
  • The eigenwoningforfait adds roughly 0.35% of WOZ value to your income.
  • 30% ruling reduces taxable Box 1 income for eligible expats.
  • Work-related expenses are mostly handled at the employer level under the WKR.

The 2026 brackets and how the 30% ruling changes them

Box 1 has three brackets in 2026:

– Up to €38,883. Taxed at roughly 35.70%, including national insurance contributions.
– €38,883 to €78,426. Taxed at 37.56%; national-insurance share tapers in this bracket.
– Above €78,426. Taxed at 49.50%, top bracket only on income above the threshold.

The 30% ruling does not change the bracket rates. It changes the income on which those rates apply. A €120,000 gross salary with a 30% ruling produces €84,000 of taxable Box 1 income — meaning only €5,574 sits in the top bracket. Without the ruling, €41,574 would sit there.

This is why the 30% ruling matters most for incomes between roughly €80,000 and €200,000. Below €80,000, the saving is modest. Above €250,000, the Balkenende cap kicks in and the marginal benefit flattens.

The deductions that matter for expats

A short list of deductions that move the Box 1 number meaningfully:

1. Hypotheekrenteaftrek. Mortgage interest on your primary residence is deductible. The deduction is capped at the rate of the second bracket (37.56%) since 2023 — meaning a top-rate taxpayer pays 49.50% on the income but only saves 37.56% on the interest. The cap reduces the headline benefit but the deduction is still meaningful.
2. Eigenwoningforfait. A deemed rental value added to Box 1, currently around 0.35% of WOZ value. For a €500,000 WOZ home that is €1,750 added to your taxable income. Usually netted against the mortgage interest deduction.
3. Public transport commute. If you commute by train, the reisaftrek can apply.
4. Study costs. Some study costs are deductible if directly tied to your current or near-future work.
5. Specific medical costs. A narrow category — chronic conditions, prescribed treatments not covered by insurance.

Most everyday work expenses (laptops, phones, work-from-home costs) sit in the employer WKR budget, not in your personal Box 1 deductions.

Common Box 1 mistakes for new arrivals

The mistakes we see most often when reviewing newly-arrived expats filings:

– Forgetting to declare the eigenwoningforfait. Filing the mortgage interest deduction without the offsetting forfait is a common error. The Belastingdienst will catch it eventually and ask for an amendment.
– Filing the wrong form for the migration year. Use the M-form for the year you migrated in or out. The P-form is for full-year residents.
– Double-counting the 30% allowance. The allowance is already excluded from your loonheffing — do not subtract it again on the return.
– Missing the partner allocation choice. Couples can split certain Box 1 items (mortgage interest, partner alimony) between partners to optimise the total tax bill. Many filings default to a 50/50 split when a different allocation would save €1,000-€3,000.
– Mortgage interest on a foreign property. Interest on your home in your country of origin is not deductible against Dutch Box 1 unless that property qualifies as your eigen woning under specific rules — usually it does not.


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Frequently asked questions

A deemed rental value added to your Box 1 income for an owner-occupied home. It is calculated as a small percentage of the WOZ value — roughly 0.35% in 2026. It is netted off against your mortgage interest deduction.

Yes, in the sense that the full interest amount is deductible. But the deduction is capped at the lower-bracket rate (35.70%), so a top-bracket payer saves less per euro of interest than a lower-bracket payer.

No. The brackets are the same. The ruling reduces the amount of income those brackets apply to.

Usually no, for employed workers. Home office costs sit in your employer WKR budget. For ZZP holders, a portion of housing costs is sometimes deductible against business profit.

By 1 May of the following year for full-year residents (P-form), or by 1 July for migration years (M-form). Extensions to 1 September and 1 May respectively are usually granted on request.


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Reviewed by Joan Ottenheim, CFP & FFP — last reviewed 2026-06-03.