Pensions and tax

In the Netherlands, pensions are taxed by the state. This means you have to pay tax on your pension. 

Building up a pension 

A pension is money you get when you stop working. Almost everyone in the Netherlands receives a basic state pension called AOW. You get AOW when you reach your state pension age. This is currently around 67 years.  

AOW is usually not enough to cover all your costs. That is why many people in the Netherlands also build up a pension through their employer.  

Once you have stopped working, your income consists of your AOW and your supplementary pension. The money is set aside and paid out to you once a month in the future. You can also save for your retirement yourself. 

In the Netherlands, you building up your pension in three parts: 

1. AOW: this is the state pension. Almost everyone who lives or works in the Netherlands gets this. 
2. Pension through your work: usually your employer arranges a pension for you through a pension fund. You and your employer pay money for this every month. 
3. Saving: you can also save or invest extra money for the future yourself, for example in a special savings account or through an insurance policy. 

Tax on pension 

In the Netherlands, you have to pay tax on your pension. You pay tax on your entire income. This includes your AOW and your pension. Everything is added together. The more income you have, the more tax you pay.  

Foreign pension 

If you have built up a pension in another country, you usually only have to pay tax in one country: either that country or the Netherlands. You do not pay tax in both countries. The Netherlands has reached agreements on this with many countries.