Wage tax will be withheld on a monthly basis by your employer and will be paid by the employer to the Dutch tax authorities. Wage tax is considered as a pre-tax on the ultimate income tax due via your Dutch income tax return. Wage tax includes both taxes and social security contributions.
Income may originate from different sources. Income tax takes into account this origin and distinguishes three categories. These categories are known as boxes. The income in each of the three boxes is taxed against different tax rates. The total amount of the tax due in the three boxes, is the income tax payable via the annual Dutch tax return. For more information, please check the website of the Dutch tax authorities.
Governmental bodies who levy taxes
In the Netherlands, also taxes for the central government are levied. Three main governmental bodies who are permitted to levy taxes are the province (environmental taxes), municipalities (property tax and dog tax) and the water authorities (water system levy).