Dutch payroll tax follows the work itself, not merely the invoice between two companies.
The accountant is preparing the final payroll return. Throughout the year, the holding company has invoiced the operating company. Payments arrived, VAT was reported and the intercompany balance looks ordinary. Yet the director-shareholder has received only a small salary.
At that desk, three figures begin to compete: the management fee, the salary actually paid and the salary recognised for tax purposes. They belong to the same commercial story, but they do different work.
The Belastingdienst knowledge-group positions on this issue give the tension a useful shape. One example concerns a holding company with a 6% interest in an operating company. The holding invoices €120,000 a year, including €20,000 for costs, charges and depreciation. It pays its director-shareholder €5,000.
The invoice attracts attention. The working relationship decides the payroll treatment.
The work behind the contract
In position KG:204:2026:13, the director-shareholder has an employment relationship with both the holding and the operating company. The assignment agreement between them lacks genuine commercial substance.
Article 32d of the Dutch Wage Tax Act 1964 can then centralise wage-tax treatment at the holding through the through-payroll scheme. Article 12a applies the customary-salary test across the group. The director’s salary is measured against the total work performed for both companies.
Its companion position, KG:204:2026:12, shows the other side of the line. A genuine assignment agreement can place the services with the holding. Where the individual has no employment relationship with the operating company, the customary-salary analysis remains at holding level.
Daily reality gives the contract its meaning. Who directs the individual? Which company carries the commercial responsibility? What does the holding provide beyond one person’s labour?
A useful question belongs at the centre of the file: if the invoice disappeared, what relationship would the work, authority, cash and payroll reveal?
Three amounts, three jobs
The management fee is revenue for the holding. It may cover accounting, insurance, financing costs, investment activity, reserves and other genuine expenditure. It is not the director’s personal salary by default.
The Court of Appeal of ’s-Hertogenbosch confirmed that distinction on 26 June 2024 in ECLI:NL:GHSHE:2024:2076. A personal holding need not pay its director the full management fee received from the operating company under the through-payroll scheme.
That matters because a management fee and a customary salary answer different questions. The fee concerns the commercial relationship between companies. The salary concerns the value of the director’s work under the wage-tax rules.
For 2026, the customary-salary calculation generally starts with three comparisons. The relevant salary is the highest of the salary for the most comparable employment, the highest salary paid to an employee in the company or a connected company, and the statutory reference amount of €58,000.
Comparable work can support a lower amount. The comparison should reflect the role, working time, responsibility, company scale and the director’s total work across the relevant entities. Where the customary salary for the total work can be substantiated at €5,000 or less, the actual salary may be reported.
A €120,000 fee therefore does not automatically become a €120,000 salary. Equally, €58,000 cannot replace an understanding of the actual role.
Where the assignment agreement lacks genuine meaning and the operating company also acts as employer, Article 10 of the Wage Tax Act becomes relevant. In the published example, the fee excluding VAT forms the starting point for fiscal salary at the operating company. Costs, charges and depreciation included in that fee can form part of the amount.
The customary-salary calculation at the holding follows as a separate step.
Payroll convenience has conditions
Small groups often route payroll through one company because it is orderly. The through-payroll scheme requires more than an orderly route. Employment relationships, assignment of remuneration, direct payment between employers, undisclosed benefits and the applicable Dutch residence or establishment condition must align.
Employee insurance may follow a different route from wage tax. Where the individual has insured employment with the operating company but not with the holding, employee-insurance premiums belong in the operating company’s payroll. Article 59 of the Social Insurance Funding Act requires that distinction.
In the stated example, the premium base is in principle the full €120,000 management fee, subject to the maximum premium wage. For a founder, this can feel counterintuitive. Wage tax and employee insurance sit beside each other in payroll administration, yet they can follow different legal paths.
Back at the accountant’s desk, management invoices alone cannot settle the matter. A coherent record connects agreements, reporting lines, board roles, payroll returns, bank movements, cost allocations and intercompany accounts. It also explains why a chosen comparable role reflects the director’s real responsibilities.
The pressure appears later
A low salary can preserve cash in the short term. Where the underlying comparison is weak, a later adjustment can put pressure on payroll, liquidity and prior accounts. The difficulty is rarely one missing document. More often, different parts of the company tell different versions of the same story.
That makes this a governance issue as well as a tax issue. A holding structure can serve sound purposes, including risk separation, investment and succession. Its strength rests on the connection between contracts, decisions, money flows and the business people actually run.
For a small group, the useful year-end conversation starts with reconciliation rather than tax arithmetic alone. The fee should connect to identifiable services and costs. The salary comparison should reflect the work performed. Payroll treatment should match the employment and insurance position.
Board decisions should explain the choices while the facts remain fresh. A management fee may be commercially reasonable, and a lower salary may also be defensible. The durable answer lies where the agreement, the ledger and the working day meet. That is where the tax position starts reflecting the company itself.
If your group’s management fees, salary and working relationships no longer tell the same story, we can help you review the position before the next payroll filing.
The data, sourcing, and analysis behind this article were conducted by Linda Pavan Geraedts. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Linda Pavan Geraedts before publication.
References
- KG:204:2026:13 Gebruikelijk loon niet reële overeenkomst van opdracht bij toepassing doorbetaaldloonregeling | Kennisgroepen Belastingdienst
- Kennisgroepen Belastingdienst - The dividing line: genuine assignment agreement versus employment with the work company
- Kennisgroepen Belastingdienst - Conditions and group-level effect of the through-payroll scheme in substantial-interest structures
- Belastingdienst - 2026 customary-salary baseline and evidence burden
- Rechtspraak - No statutory pass-through of the full management fee to the individual
- Kennisgroepen Belastingdienst - Withdrawn position KG:204:2022:21
