Freelancing alongside a job: what the tax authority, your employer and you need to know
What you earn alongside your job adds up with your salary in income tax. Your employer withholds tax on the salary as if that is your whole income; the side earnings come on top and are taxed in the bracket where your salary already sits, or higher. That is why the assessment on side earnings is higher than the percentage you know from your payslip, and why setting money aside is not advice but arithmetic.
This article explains what kind of income your side earnings are: business profit (winst uit onderneming) or income from other work (resultaat uit overig werk). Then why it stacks, which deductions you usually do not reach alongside a job, why VAT (btw) stands apart from it, what you agree with your employer, and how you avoid the surprise in May. The tax explanation on this page follows Dutch law and is written for Dutch sole proprietorships (eenmanszaak).
This is general information, not tax or legal advice. basestep calculates and explains; you file yourself. If you are unsure about your situation, consult an adviser.
What kind of income are your side earnings?
One of two. If the Belastingdienst (the Dutch tax authority) sees you as an entrepreneur for income tax, it is business profit. If it does not, but you do earn something outside employment, it is income from other work. The difference is not in the amount but in the circumstances: how many clients you have, how much time you put in, whether you run entrepreneurial risk, whether you invest, whether your business exists to the outside world.
In both cases you pay income tax and an income-related contribution under the Zorgverzekeringswet (the Dutch Health Insurance Act) on the result. In both cases you may deduct the costs you made for the work. The difference is that the schemes for entrepreneurs only apply to business profit: the zelfstandigenaftrek (the self-employed deduction), the startersaftrek (the starters' deduction), the mkb-winstvrijstelling (the SME profit exemption) and the investeringsaftrek (the investment deduction). With income from other work you are not entitled to them.
Whoever starts alongside a job often starts with income from other work and grows into an entrepreneur. The Belastingdienst gives that judgement after your registration with KVK (the Dutch Chamber of Commerce), and you can also substantiate it yourself in your return. The term VAT or income tax on this site puts the two kinds of entrepreneur side by side.
- Business profit, or income from other work; the circumstances decide.
- Both: income tax plus the Zvw contribution (the health insurance contribution), costs deductible.
- Only with business profit: the schemes for entrepreneurs.
Why do you pay more on it than you think?
Because income tax is charged on your total income in box 1, and your employer only knows your salary. Your employer withholds payroll tax (loonheffing) as if your salary is your whole income, with the tax credits (heffingskortingen) that go with it. What you earn alongside it lands on top of that salary in your return. So it is not taxed from the first euro of the first bracket, but from the point where your salary stops.
The result is that the percentage on your side earnings is higher than the average percentage on your salary. If your salary already falls in the higher bracket, you pay that bracket's rate on every euro of side earnings. On top of that comes the Zvw contribution, which your employer does pay on your salary but not on your side earnings. And because tax credits phase out as income rises, side earnings can also cost you part of your credit.
The exact rates and thresholds for 2026 are on the Belastingdienst website and change every year; they are deliberately not given here as numbers. What does not change is the mechanism: the side earnings land on top, and that is where they are taxed.
- Box 1 covers your total income; your employer only knows your salary.
- The side earnings are taxed where your salary stops, plus the Zvw contribution.
- Tax credits phase out as income rises.
Which deductions do you reach, and which not?
You always get the costs you make for the work: tools, software, part of your phone, travel costs, the registration with KVK. That applies to business profit and to income from other work. The schemes for entrepreneurs are a different story, and that is where the disappointment lies for those who work alongside a job.
The zelfstandigenaftrek (€1,200 in 2026) requires the urencriterium (the 1,225-hour test): at least 1,225 hours a year on your business, and more time on your business than on your job. Alongside a job of 32 hours or more, that second condition is arithmetically almost impossible to meet, except for starters, who are exempt from it in the first years. The article on the self-employed deduction alongside a job does the calculation.
What you do get as an entrepreneur without the urencriterium is the mkb-winstvrijstelling: in 2026, 12.7% of the profit after the ondernemersaftrek (the entrepreneur deductions), which stays outside taxation. That is the scheme that yields the most for an entrepreneur alongside a job, and it does not apply to income from other work.
- Costs for the work: always deductible, in both cases.
- Zelfstandigenaftrek: 1,225 hours and more than your job; alongside a job usually out of reach, except for starters.
- Mkb-winstvrijstelling: 12.7% (2026), without the urencriterium, only with business profit.
How does VAT work, separate from your salary?
VAT has nothing to do with your salary. Whether you are an entrepreneur for VAT depends on whether you independently and regularly supply something for a fee. You meet that quickly, even with a small amount, and even if the Belastingdienst does not see you as an entrepreneur for income tax. So you can have income from other work and still have to charge VAT.
If you are an entrepreneur for VAT, you charge VAT on your invoices, pay it over per quarter and deduct the VAT on your business costs. If your turnover stays under €20,000 a year, you can opt for the kleineondernemersregeling (KOR, the Dutch small businesses VAT scheme): no VAT charged, no return, but also no deduction of the VAT on your costs. For someone who starts small alongside a job and mainly supplies to consumers, that is often attractive; whoever supplies to businesses or invests a lot should do the sums first. The article on the kleineondernemersregeling helps with that.
Keep the two streams apart. VAT is money you collect for the Belastingdienst and that was never yours; income tax is a part of what you earn. They each have their own return, their own rhythm and their own account.
- Whether you are an entrepreneur for VAT does not depend on your salary, and it happens quickly.
- Under €20,000 turnover: the kleineondernemersregeling is a choice, not an obligation.
- VAT was never yours; income tax is a part of what you earn.
What do you agree with your employer?
First read your employment contract. Since 2022 an employer may only invoke a ban on side activities with an objective reason (Article 7:653a of the Dutch Civil Code, BW). Such a reason exists, for example, when the work competes, affects your health or puts compliance with the Arbeidstijdenwet (the Dutch Working Hours Act) at risk. A general ban without a reason does not hold. But a duty to report is allowed, and many contracts have one.
So report it, even if you do not have to. An employer who reads about it in the paper reacts differently from an employer who heard it from you. Say what you do, that it does not compete, and that you do it outside working hours and with your own means. That last point matters: building your own project with your employer's laptop or accounts can give them ownership rights over what you make, depending on what your contract says about intellectual property.
And mind the working hours. The Arbeidstijdenwet adds up your hours with different employers, and your own business counts in that if you are its employee, which is not the case with a sole proprietorship. But an employer may say something about fatigue and safety. Be honest about that, especially at the start, when you want to do too much.
- Read your contract: a ban needs an objective reason, a duty to report is allowed.
- Report it, even if you do not have to; your own means, your own time.
- What you make with your employer's laptop can belong to your employer.
How do you avoid the surprise in May?
By setting part of every euro that comes in aside, before you spend it. The VAT you collect is not yours and leaves every quarter; set it aside as soon as an invoice is paid. Of what remains, part goes to income tax and the Zvw contribution, and alongside a job that part is bigger than your gut says, for the reason in the second question.
Naming a fixed percentage is tempting and misleading, because it depends on your salary, your costs and whether you are an entrepreneur. Better is to request a provisional assessment (voorlopige aanslag) from the Belastingdienst. You give an estimate of your side earnings, and you pay the tax on it spread over the year, instead of all at once after the return. That also prevents tax interest (belastingrente), which the Belastingdienst charges if you paid too late or too little. You may adjust the estimate during the year.
Whoever prefers to track it themselves keeps the two streams in a separate account and looks at it every quarter. The article on setting money aside explains the three streams; the administration in basestep calculates the reserve and explains per amount where it comes from.
- VAT aside as soon as an invoice is paid; it leaves every quarter.
- A provisional assessment spreads the income tax and prevents tax interest.
- No fixed percentage; but a separate account and a look every quarter.
Do you have to register with KVK?
If you meet the KVK criteria, yes, also alongside a job: independently supplying to others than family and friends, for more than a reimbursement of costs, regularly and with the intention of earning. Your job changes nothing about that. What your job does change is the judgement of the Belastingdienst on entrepreneurship for income tax, because time and size count in it.
For a maker alongside a job, registering is usually the practical start: with a KVK number you open a business account, connect a payment provider and send invoices that meet the requirements. The article on registering with KVK walks through the criteria and the steps.
And if it stays small and is a hobby, you do not register, you do not ask for money, and this whole article does not concern you. That choice is clear as long as you make it consciously.
- The KVK criteria also apply alongside a job.
- You need the KVK number for an account, a payment provider and invoices.
- Hobby: do not register, do not ask for money.
Sources
Checked on 5 September 2026. The rates and brackets of 2026 are deliberately not in this article; they are on the Belastingdienst website and change every year. The amounts that are here carry their year.
Further reading
Three places that connect to this.
From first prompt to tax return.
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