Payroll tax (loonheffing)

Definition

Loonheffing is the collective Dutch term for the payroll tax and national insurance contributions an employer withholds from employees' gross wages and remits to the Tax Administration via the payroll tax return. For the WBSO, loonheffing is the fiscal channel through which the benefit is delivered: companies with staff don't receive a cash payout, but a reduction on the payroll tax due — officially called the S&O-afdrachtvermindering (R&D remittance reduction). To submit a WBSO application you therefore need a payroll tax number (loonheffingsnummer), alongside your Chamber of Commerce details. The benefit flows through monthly: once RVO has issued the S&O declaration, you remit less with every payroll tax return. Sole traders without staff have no payroll tax number and no payroll tax to reduce; for them the WBSO instead works through a fixed deduction in income tax. Loonheffing also marks the boundary with adjacent schemes: the WBSO acts on payroll tax, while the innovation box lowers corporate income tax once R&D work turns a profit. Because these are different taxes, combining both schemes does not amount to double funding. In practice, this means an accurate, timely payroll tax return is a precondition for actually realising the WBSO benefit.

Frequently asked questions

What's the difference between loonheffing and loonbelasting?

Loonheffing is the collective term for the payroll tax (loonbelasting) and national insurance contributions an employer withholds and remits together; payroll tax is just one component of it.

How is the WBSO benefit settled through payroll tax?

Once RVO has issued an S&O declaration, you may deduct the granted benefit each month from the payroll tax you normally remit via your payroll tax return.

Do sole traders deal with payroll tax for the WBSO too?

No, sole traders without staff have no payroll tax number; for them the WBSO benefit runs through a fixed deduction in income tax instead of through payroll tax.