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What is the Zorgtoeslag? What is the Algemene heffingskorting? Dear expats in the Netherlands, here we explain you how to calculate and apply!

Zorgtoeslag is an allowance; Algemene heffingskorting is a tax credit. Let’s see what they are for and how to apply!

The Zorgtoeslag

Dutch people are obliged to contribute through their health national insurance. The same is valid for who lives or works in the Netherlands. Expats from outside or inside the EU, EEA or Switzerland who arrive in the Netherlands must take out Dutch health insurance within four months of receiving their residence permit or registering at their city hall, even if they have an existing foreign policy in their home country. So what kind of allowance is the Zorgtoeslag?

The amount of the Dutch health insurance (zorgverzekering) could be excessive for some (to compare the amount of each health insurance company, you can have a look here). Luckily Dutch government assists every taxpayer with a benefit, the so called Zorgtoeslag, aimed to help people cover health insurance costs through a monthly allowance.

Hence the Zorgtoeslag is an healthcare allowance that you receive every month in advance; this advance is based on an estimate of your annual income that the tax authorities make in the first half of the year. If your actual annual income appears to be lower than the estimate, you will receive an extra healthcare allowance.

Depending on your personal/joint income and assets, you might be eligible to claim the health insurance allowance.

So, the amount of zorgtoeslag you can receive depends on your income: the less you earn, the more the healthcare allowance is! For example, a single payer who earns up to 20,500€ receives 94€ per month, while a couple receives 176€. Things change when you earn 25,500€: the allowance is 38€ for single and 119€ for couples.

The algemene heffingskorting

The general tax credit (Algemene heffingskorting) is the Dutch deduction on your income tax and national insurance contributions. This means that you pay less tax and National Health Insurance (Premium). Everyone is entitled to the general tax credit. But whether you can make full use of this tax credit depends on your age and whether you have lived in the Netherlands throughout the year.

The Algemene heffingskorting - general tax credit - depends on the level of your income. You will receive less general tax credit if your income rises.

If you reach the AOW (Dutch State Pension) age in 2018, you will have to pay an adjusted tax rate.

Do you have the AOW age throughout the year? Then the amount of the general tax credit and the percentage by which your taxable income is reduced will be lower.

Old Age Pensions Act, AOW, is a basic state pension. As a general rule, everyone who has reached the AOW pension age and lives or has lived in the Netherlands is entitled to an AOW pension.

Algemene heffingskorting amounts

If you will not reach the AOW age in 2018, here the general tax credit you will have.

Taxable income (including assets)

Algemene heffingskorting

Up to € 20.142

€ 2.265

Up to € 68.507

2,265 - 4,683% x (taxable income - € 20,142)

More than € 68.507

€ 0

Limits and amounts

If you don’t have a fiscal partner (toeslagpartner), your gross income may not exceed 28.720 euros per year (2018 guidelines). On the contrary, if you have a fiscal partner, your collective annual income cannot be more than 35.996 euros.

The value of your assets, such as savings and shares, must also not be too high. In 2018 the asset limit is 113.415 euros for individuals and 143.415 euros (total) for partners.

We hope this guide about the Zorgtoeslag and the Algemene dissipated all of your doubts. To calculate how much you can claim and receive from Dutch government is easy, fast and free. You will not automatically receive a benefit the first time you fill your tax return. Be sure to apply for every benefit and tax credit you are allowed for, contact us and calculate for free your tax return!