You will retire soon. This means a lot will change. You will stop working and start doing all kinds of things you have always wanted to do, but never had the time for. Make a long journey, look after the grandchildren one day a week or spend the winter under the sun, for example. However, a lot will also change in relation to your income. You will now receive a state pension, a retirement income and perhaps an annuity benefit.
This also means that you will have to deal with new tax rules. Where previously you had social security contributions and wage tax, you now have to deal with the Dutch Healthcare Insurance Act (Zvw) premium and elderly person's tax credit. To provide you with more information on what is withheld from your retirement income, we will list the most important tax tips.
Income tax and wage tax
When you worked, you paid income tax on your annual income. Your employer would withhold wage tax from your monthly pay. The wage tax is a tax at source on income tax. That meant you had to pay no or less income tax. This will still apply in your case. But instead of withholding tax on your pay, it is now withheld from your state pension and retirement income. You do not have to do anything for this. These amounts should already be filled in for you on your tax return. The amount of your state pension, payout(s) and other income together determines which tax bracket you are under and what percentage of income tax you may still have to pay (after the wage tax as a tax at source). It may be that in the first year of retirement, the income is not properly added up by your pension provider and the Dutch Social Insurance Bank (SVB, which pays your state pension). Therefore, you may have to pay taxes subsequently. You can prevent this by requesting a provisional assessment. If you do, you can pay the tax in advance in instalments, instead of in a lump sum subsequently.
Are you going to file an income tax return? In that case, it may be smart to click on all the question marks in the declaration. For some deductible items, it may not be immediately clear what is meant exactly. If you click on the question mark, you will read in understandable language what this item includes. You may, for example, be allowed to deduct certain costs after all.
Discounts
You will get a discount on the tax you pay. First of all, there is the general tax credit.. The higher your income, the lower this discount. In this case too, your income may not have been added up properly and you may have to repay part of the (excess) discount.
In addition, as soon as you reach the state pension age, you will also be entitled to the elderly person's tax credit. This credit is income-dependent. You can also divide various deductible items between you and your tax partner. Click on the website of the Tax and Customs Administration to see which deductible items can and cannot be shifted.
Healthcare premium and healthcare costs
Previously, your employer always paid your Dutch Healthcare Insurance Act (Zvw) premium. If you retire, you may have to pay for it yourself. On the Tax and Customs Administration's website you can find out which situation applies to you. Do you receive a state pension? In that case, the Dutch Healthcare Insurance Act (Zvw) premium will automatically be withheld from your gross state pension. Do you also receive a retirement income from Zwitserleven? In that case, Zwitserleven will automatically withhold the Dutch Healthcare Insurance Act (Zvw) premium for you. Each year, the government determines what percentage of the income the Dutch Healthcare Insurance Act (Zvw) premium is. In 2024, this will be 5,32% for retirees. This is easy to overlook because often your employer used to withhold this contribution for you. Therefore, you would be well-advised to take this into account if you have other income besides your state pension and retirement income from Zwitserleven.
As you get older, the chance you will be spending more on healthcare increase. Large parts of these expenses are refunded by your health insurer. But some costs you will have to pay yourself. The costs of a dental hygienist or physiotherapist, for example, but also travel expenses to a hospital or doctor. You will, however, often be allowed to deduct these costs in your tax return. Therefore, check out the complete overview of deductible and non-deductible healthcare costs at the Tax and Customs Administration's website and find out what expenses you can deduct.
Other tips
Do you have assets and do you want to donate these to your children or grandchildren? There are several limits on the amount you can donate per year and/or one-off tax-free. Donations are also subject to several conditions, including, for example, the age of the child or grandchild. On the Tax and Customs Administration's website you will find all information about this.
Do you do volunteer work? You may get paid certain compensations for this, for example, a volunteer's payment or a reimbursement of travel expenses. The reimbursement of expenses is always untaxed. However, certain conditions apply for the payment of volunteers. If the payment exceeds a certain amount, it will be considered income subject to income tax. The exact amounts are listed on the Tax and Customs Administration's website and can be consulted at any time.