Income tax: from profit to assessment
You pay income tax on your profit, after a few deductions. The Zvw contribution comes on top. Step by step, it looks like this.
Last reviewed: Tax year 20267 min read
The steps
- Profit: revenue minus business costs and depreciation.
- Entrepreneur's deduction: the self-employed deduction (zelfstandigenaftrek) and, if you're starting out, the starter deduction (startersaftrek).
- SME profit exemption (mkb-winstvrijstelling): 12.7% of profit after the entrepreneur's deduction.
- Taxable profit: what's left. It falls in box 1, together with any other income.
- Rates: 35.75% up to €38,883, 37.56% up to €78,426 and 49.50% above.
- Tax credits: the general tax credit and the labour tax credit come off the tax. They shrink as you earn more.
- Zvw contribution: 4.85% of your taxable profit, up to a maximum of €79,409.
Self-employed deduction, starter deduction and the hours criterion
The self-employed deduction is €1,200 in 2026. You get it if you're an entrepreneur for income tax and meet the hours criterion: at least 1,225 hours a year on your business, and usually more time on your business than on other work. Time spent on quotes, bookkeeping and finding clients counts too.
If you weren't self-employed in one or more of the previous five years and used the self-employed deduction at most twice in that period, you also get €2,123 starter deduction.
Worked example: €45,000 profit
- Profit
- €45,000.00
- Self-employed deduction
- − €1,200.00
- SME profit exemption (12.7%)
- − €5,562.60
- Taxable profit
- €38,237.40
- Box 1 tax
- €13,669.87
- General tax credit
- − €2,571.08
- Labour tax credit
- − €5,673.54
- Income tax
- €5,425.25
- Zvw contribution (4.85%)
- + €1,854.51
- Total
- €7,279.76
With the starter deduction, the total would be €6,408.71. Assumptions: no other income, no tax partner, no deductions outside the business. Calculated with the Mizara demo model.
Deductions capped at 37.56%
If part of your income falls in the top bracket, a deduction saves you at most 37.56%, not 49.50%. This applies to the entrepreneur's deduction and the SME profit exemption, among others. The Belastingdienst applies this automatically in your return.
How and when you pay
You file a return each year for the previous year, usually before 1 May. With a provisional assessment you already pay during the year. Without one, the whole amount comes at once after your return. That's why it's smart to set money aside every month.