Understand · Payroll glossary
What is withholding tax?
Updated on
Withholding tax is an advance on your income tax: your employer deducts it from your salary every month and pays it to FPS Finance. In 2026: 26.75% to 53.50% (2026 key formula scale, with a tax-free amount of €11,170 a year). In Dutch: bedrijfsvoorheffing.
Definition of withholding tax
Its amount follows a statutory calculation, set each year in Annex III to the Royal Decree implementing the Income Tax Code 1992: the month’s taxable pay is annualised, reduced by lump-sum expenses, taxed by bracket, reduced by the tax-free amount, then brought back to a monthly figure. Dependent children and the fiscal work bonus lower it.
It is not the final tax: the following year, the tax return compares the actual tax with the withholding tax deducted, and you either get a refund or pay the difference.
The key figure in 2026
Source: Calcul du précompte professionnel : annexe III de l’AR/CIR 92 et formule-clé 2026, FPS Finance. 2027 amount: not yet published. This entry will be updated as soon as it is.
Worked example
At €3,000 gross, the basic withholding tax is €474.50; the fiscal work bonus brings it down to €437.87 a month. With two dependent children, it falls to €299.87.
Over the year, with double holiday pay and a one-month year-end bonus, the withholding tax actually deducted (€7,324.99, the amount in code 286 of tax form 281.10 (fiche 281.10)) is close to the tax Indexo estimates after the fiscal work bonus (€7,417.08, with a 7% municipal tax): €92.09 would remain to be paid, settled through the tax assessment notice (aanslagbiljet / avertissement-extrait de rôle).
In Dutch: bedrijfsvoorheffing
On a Dutch-language payslip (loonbrief) it is called ‘bedrijfsvoorheffing’; on a French-language one (fiche de paie), ‘précompte professionnel’. FPS Finance calls it ‘withholding tax on earned income’.
Dutch term taken from: CSC/ACV (secondary source), FPS Finance.
Not to be confused with…
- Personal income tax (PIT): the annual tax on individuals’ income, calculated by FPS Finance from your tax return.
- Withholding tax on non-recurring pay: the withholding tax deducted from holiday pay, the year-end bonus and other bonuses: a single rate, chosen according to your annual pay.
- Withholding tax on investment income: the tax withheld at source on investment income, such as dividends, interest or certain copyright income.
Calculate it for your situation
The statutory withholding tax calculation, step by step, with two examples to the cent.
Related terms
- Taxable payFrom gross to net · in Dutch: belastbaar loon
- Tax-free amountTax and tax return · in Dutch: belastingvrije som
- Fiscal work bonusFrom gross to net · in Dutch: fiscale werkbonus
- Tax assessment noticeTax and tax return · in Dutch: aanslagbiljet
Sources
Parameters in force on 1 October 2026. Each parameter links to its source, the official one where it exists; a secondary source is flagged as such.
- Calcul du précompte professionnel : annexe III de l’AR/CIR 92 et formule-clé 2026, FPS Finance.
- Annexe III de l’AR/CIR 92, texte légal du barème, Fisconetplus (FPS Finance).
- Loonbrief onder de loep 2026 (Dutch-language payslip guide), CSC/ACV (secondary source).
- Toelichting bij deel 1 van de aangifte in de personenbelasting, aanslagjaar 2026 (Vlaams Gewest), FPS Finance.