Dutch Incomes Rise in 2026

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In 2026, incomes in the Netherlands are expected to rise modestly across most income groups as a result of adjustments to the income tax system. According to payroll services provider ADP, changes in tax rates and thresholds will translate into slightly higher net pay for the majority of workers.

An employee earning the average monthly gross salary of €3,704 will see their take-home pay increase by around €26 per month, driven by a reduction in the lowest income tax rate from 35.82% to 35.75%.

Minimum wage increase supports low earners

Low-income workers will benefit disproportionately from the increase in the statutory minimum wage. From January, the hourly minimum wage rises from €14.40 to €14.71. For someone working 36 hours per week, this translates into an additional €46 per month.

These changes are particularly relevant for part-time workers and younger employees who do not yet qualify for the full minimum wage. ADP tax law expert Karin Stam noted that this group experienced a decline in disposable income in 2025, which will be partially reversed in 2026.

Impact on middle and higher incomes

Employees earning twice the average wage are expected to gain approximately €37 per month, while those earning three times the average salary will see a smaller increase of around €16. The figures reflect the progressive nature of the tax system.

Although the top income tax rate stands at 49.5%, the income threshold at which it applies is also increasing. As a result, middle-income earners will reach the highest tax bracket less quickly, softening the overall tax burden.

Correction for vulnerable income groups

Individuals earning between €1,000 and €2,000 per month, largely part-time workers and people under the age of 21, were among those who lost purchasing power in 2025. Initial projections suggested further declines, but amendments to the 2026 tax plan have improved their outlook.

According to ADP, these earners will be better off in 2026 than in 2025, although their disposable income will still remain below 2024 levels.

Pensioners benefit from lower healthcare contributions

Pensioners will also see a modest increase in net income, mainly due to a reduction in healthcare insurance contributions under the Zvw scheme from 5.26% to 4.85%. A pensioner receiving €1,000 per month will gain about €5, while someone with a monthly pension of €2,500 will see an increase of roughly €12.

These adjustments are intended to offset living cost pressures and distribute the benefits of tax reforms more evenly.

As reported by International Investment experts, the Dutch tax reforms for 2026 represent a fine-tuning of the fiscal system rather than a structural overhaul. While the income gains are modest, they help stabilise purchasing power across households and correct imbalances that emerged in previous years, supporting broader economic resilience.