Payroll tax credit on AOW or pension: how do I choose and change it?
If you receive AOW and an additional pension, the payroll tax credit may apply to at most one income at a time. You choose the payer. Even with only one payer applying it, extra tax may be due because the final calculation uses your total income.
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Detailed explanation, checklist and sources
On this page
1. List all income
This concerns people living in the Netherlands combining AOW with pension or wages. Collect each payer’s expected gross annual amount, holiday allowance, withheld payroll tax and credit setting. Living abroad or starting AOW partway through a year needs a separate tax calculation.
Belastingdienst — loonheffingskorting bij meerdere inkomens ↗
2. Check where the credit applies
Check your AOW and pension or wage statements. SVB applies the credit to AOW by default, but your setting may have changed. Do not apply it simultaneously at SVB and the pension fund. Applying it nowhere is also possible; that does not remove your ultimate entitlement.
Belastingdienst — loonheffingskorting bij meerdere inkomens ↗
3. Compare monthly cash with final tax
The credit reduces monthly withholding, not automatically final tax. Each payer sees only its own payment. Combined income may mean smaller credits or a higher tax bracket. Applying it to the highest income therefore does not guarantee no extra tax. Calculate, or obtain a calculation, using every annual income and the correct tax year.
Belastingdienst — loonheffingskorting bij meerdere inkomens ↗
4. Coordinate a change
Change AOW through Mijn SVB and pension through your provider’s official procedure. Notify both payers and make stopping and starting effective in the same month. Check their processing time and confirmation; retroactive changes are not always possible. This page sends no change and makes no choice for you.
5. Consider a provisional assessment
A provisional assessment through Mijn Belastingdienst can estimate the annual difference earlier and may allow instalments. Check its income inputs and update changes. Note: the Belastingdienst says its provisional calculation assumes the payroll credit was applied; applying it nowhere may therefore have an unfavourable cash-flow effect. Ask for clarification if unsure. A provisional assessment does not guarantee the final outcome.
Belastingdienst — loonheffingskorting bij meerdere inkomens ↗
6. Check the new statements
After the effective month compare both statements: credit at no more than one payer, correct date and deductions. Keep confirmations locally. The final assessment following your return reconciles entitlement and tax paid. For duplicate credit or an unexplained difference, contact the payers and Belastingdienst or use our assistance route.
Belastingdienst — loonheffingskorting bij meerdere inkomens ↗
7. Which levies and credits are involved?
SVB withholds wage tax and Anw/Wlz contributions from AOW. From AOW age, general, elderly-person and single-elderly-person tax credits may apply. The first two depend on total income; the single-elderly-person credit is a fixed amount for those receiving or entitled to unmarried-person AOW. Check the correct tax year and whether changed income affects allowances. This is not the employment tax credit on work income.
I apply the credit only once. Can extra tax still be due?
Yes. SVB and the pension fund calculate separately, whereas the Belastingdienst assesses your total annual income. Reduced credit entitlement or a higher bracket may still produce additional tax.
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Belastingdienst — loonheffingskorting bij meerdere inkomens ↗SVB — loonheffing en loonheffingskorting ↗Sources may be in Dutch. General information about Dutch law, not individual legal advice.