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The general levy reduction (algemene heffingskorting) will go up. This means you will pay less income tax and a lower national insurance premium. A reduction in the levy of €60 was already planned for 2021, but an extra reduction €22 has been added.
The amount of the reduction of the levy, depends on your income. Do you have taxable earnings (your income minus deductible items and fiscal allowances) up to € 68.507? Your disposable income will increase.
Do you, for example, have taxable earnings (from work or your own home) of €20,000? Then you pay €126 less in taxes as a result of this increase in the general levy reduction. For a taxable income of €40,000 you pay €87 less in taxes and if your taxable income is €70,000 this increase in levy reduction has no effect on the amount you pay in taxes.
- Entrepreneurs who earn up to € 68.507 from their work and/or property.
The change in law has come into effect on 1 January 2021.