Loonheffingskorting is a tax discount in the Netherlands that your employer can apply on your behalf. It reduces the amount of taxes deducted from your salary. Every employed person is entitled to this discount. However, there are some rules and requirements to consider when applying for loonheffingskorting. You can only request it from one employer if you have multiple jobs.
At the beginning of each year, individuals in the Netherlands need to fill out their tax return. The Belastingdienst (Tax Authorities) reviews whether you have paid the correct amount of tax. For instance, if you overpaid taxes (loonheffing) in 2019 and didn't receive enough tax discounts, the Belastingdienst will refund you in 2020. On the other hand, if you underpaid tax, you will need to make additional payments. Some people choose not to apply for loonheffingskorting throughout the year. As a result, they pay higher taxes but receive a X amount when filing their tax return. Others prefer to receive the discount monthly, increasing their monthly income. Ultimately, the choice is yours. For more information, please contact the Belastingdienst.