Employment Tax Credit (Arbeidskorting)
The employment tax credit (arbeidskorting) is a tax credit specifically for people who work. It doesn't matter whether you are employed or self-employed – as long as you have employment income, you are entitled to the employment tax credit. The amount increases as you earn more, up to a maximum. Above a certain income, the credit gradually decreases back to zero. In 2025, the maximum employment tax credit is approximately €5,532. You reach the maximum at an income of about €39,958. Above approximately €124,935, the credit is fully phased out to €0. The credit is automatically processed by your employer through payroll tax, or through your income tax return if you are self-employed. The credit is income-independent in the sense that everyone with employment income is entitled to it, but the amount does depend on your income level. Together with the general tax credit, it forms the most important tax reduction for workers.
Example
You earn €40,000 per year as an employee. Your employment tax credit is approximately €5,532 (the maximum). This is automatically processed by your employer, meaning you pay approximately €461 less in payroll tax per month. If you earn €100,000, your credit has already been reduced to approximately €2,200.
Why does this matter?
The employment tax credit is the most important tax reduction after the general tax credit. For workers with an average income, this easily saves more than €5,000 per year. As a freelancer, you need to make sure this credit is correctly included in your tax return.
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