Loonheffingskorting: A Guide for International Students -

‘Loonheffingskorting’, is something every international student should be aware of. In this blog, we will be breaking down what it is and how to apply for it.

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What is Loonheffingskorting?

When you work in the Netherlands, you always pay wage tax, this is pretty standard. However, as an international student, you might be able to get a reduction in the amount of tax you pay.

Loonheffingskorting (LH) is also called Wage Tax Deduction, this is a benefit offered by the government on the wage tax you pay with your salary. This means less taxes, more salary and more money for you to spend at Albert Heijn.

How to Apply for Loonheffingskorting?

So, how can you enlist the help of this tax-saving superhero? Your company will ask you if you want to apply for it when you start working in the Netherlands. And they’re not asking casually; it’s a requirement! They will put it in writing to ensure that you are fully aware of the opportunity.

To Apply or Not to Apply,
That is the Question

You will always end up paying the same amount in wage tax.

With LH you will get a reduction in the amount of tax paid on every payslip you receive.
Without LH you will not get a reduction in the amount of tax paid, meaning you pay more taxes on every payslip you receive. This results in a lower net wage on that specific payslip. However, once the year (January – December) is over and you have filed your taxes in March, the conclusion might be that you have overpaid taxes. Then you will get back the overpaid taxes some months later.

So, whether or not you get LH you will still pay the same in taxes in the end. The difference is do you want more money in your weekly wage or would you like to receive it later after filing taxes.

Checking if you have it

All you need to do is take a look at your pay slip. If you see it noted down on the pay slip then that means you have LH. It will be listed down as ‘Loonheffingskorting’, followed by a ‘Yes’ or ‘No’.

Working with Multiple employers

Do you have multiple employers? LH can only be applied for at one employer. Usually, LH is activated at the employer where you earn the most.

Got your job through iSW

During your onboarding, you will be asked if you want Loonheffingskorting, if you say ‘yes’ then you will be provided with an extra document to approve. It’s as simple as that.

Loonheffingskorting might be a tounge twister, but we all love a discount. If you are curious on how to fill in your taxes check out our other blog.