If, on an employee’s first day of work, the employer does not have all the information required to deduct payroll taxes, the default rate must be applied.
Details
The anonymous rate must be applied where the employer:
- cannot establish the employee’s identity;
- cannot establish the address (or can only establish a postal address) of an employee residing in the Netherlands;
- where an employee living outside the Netherlands only has a (temporary) Dutch address, but not an address abroad.
To provide this information to your employer, you can use the form made available on the Tax and Customs Administration’s website Template: Declaration of data for payroll tax purposes. However, you may also use your own template. The details provided by the employee must, of course, be recorded in the payroll records.
Anonymous rate
For a long time, the anonymous rate was the same as the rate in the highest tax bracket. In 2019, that rate applies to wages above €68,508 and amounts to: 51,75%. However, the anonymous rate for 2019 is higher: 52%.
The rates mentioned above are the net rates. Where an employee receives a net wage component, payroll taxes must be paid on the basis of the grossed-up rate. The standard rate of 51.75% results in a grossed-up rate of 107,2%. The grossed-up anonymous rate is 108,3%.
When the anonymous rate is applied, payroll taxes are calculated on the full salary at the rate of 52%. In doing so, payroll tax credits are not taken into account. For employee insurance contributions, the maximum contributionable salary is not taken into account.
The result for the employee is that an excessively high amount of payroll tax is deducted. Naturally, this is rectified later in the employee’s income tax return.
The employer may be paying too much in employee insurance contributions.
Correct
Once the employee’s details are complete, payroll deductions may be calculated on the basis of the standard rates. However, any over-deductions relating to past periods may not be reversed. This is only permitted if the details were submitted on time but could no longer be processed. The Tax and Customs Administration sets this out in paragraph 3.5 of the third version of the Payroll Tax Newsletter 2019.
Fine
Failure to apply the anonymous rate (or correcting it incorrectly) may result in a fine for the employer. This penalty for non-compliance amounts to a maximum of € 5.278. As this is a fine for non-compliance, there is often little scope for any defence other than an attempt to have the amount of the fine reduced to some extent.