Income tax
Tax breaks for freelancers
Four schemes lower the profit you pay income tax on. You only get two of them with 1,225 hours.
In short
As an entrepreneur for Dutch income tax you pay tax on less than your full profit. If you meet the hours criterion (urencriterium) of 1,225 hours, in 2026 you deduct €1,200 as the self-employed deduction (zelfstandigenaftrek), and in your first five years as an entrepreneur up to three times €2,123 as the starter's deduction (startersaftrek) on top of that. Of what remains, 12.7% is exempt: the SME profit exemption (mkb-winstvrijstelling), which every entrepreneur gets, even without the hours criterion. If you invest in business assets, the small-scale investment deduction (KIA) comes on top: 28% of an investment total between €2,901 and €71,683. In 2026 the benefit of the entrepreneur's deduction and the SME profit exemption is calculated at no more than 37.56%.
Work it out with your own numbers: Freelancer net income calculator
The essentials
- Self-employed deduction
- €1,200 in 2026, if you meet the hours criterion. If you have reached state pension (AOW) age at the start of the year, half.
- Starter's deduction
- €2,123 on top of the self-employed deduction, up to three times in your first five years as an entrepreneur.
- SME profit exemption
- 12.7% of your profit after the entrepreneur's deduction (2025 and 2026). No application, no hours criterion.
- Cap
- In 2026 the benefit of these deductions is calculated at no more than 37.56%.
The order, with a worked example
You start from your profit: turnover minus business costs and depreciation. First the entrepreneur's deduction comes off — the self-employed deduction and, if you are a starter, the starter's deduction. Of what is left, 12.7% is exempt: that is the SME profit exemption. The remainder is your taxable business profit, and it is added to your other income in box 1.
An example for 2026: a starter with €40,000 profit who meets the hours criterion. €40,000 minus €1,200 self-employed deduction and €2,123 starter's deduction is €36,677. Of that, 12.7% is exempt, rounded €4,658. Taxable remains €32,019 — about four fifths of the profit. Without the starter's deduction it is €38,800 after deductions, €4,928 exempt and €33,872 taxable. What you finally pay on it depends on your other income and your tax credits.
Worked example 2026: from profit to taxable profit
| Profit | €40,000 |
|---|---|
| Self-employed deduction | − €1,200 |
| Starter's deduction | − €2,123 |
| SME profit exemption | − €4,658 |
| Taxable profit | €32,019 |
Self-employed deduction and starter's deduction
You get the self-employed deduction if you are an entrepreneur for income tax and meet the hours criterion: at least 1,225 hours per calendar year on your business, and more time on your business than on other work. If in at least one of the five previous years you were not an entrepreneur, that second requirement does not apply. In 2026 the deduction is €1,200; if you have reached state pension (AOW) age at the start of the year, half. The deduction is not higher than your profit, unless you also get the starter's deduction, and what you could not use you may carry forward for the next nine years.
The starter's deduction of €2,123 comes on top of the self-employed deduction, at most three times in your first five years as an entrepreneur. For it you must be entitled to the self-employed deduction, you must not have been an entrepreneur in every one of the past five years, and you used the self-employed deduction at most twice in those five years. You cannot choose: if you are entitled to it, it is added. If the two together exceed your profit, you have a loss that you offset against other income or in other years. Which hours count and where it goes wrong when you start mid-year is in the guide on the hours criterion.
SME profit exemption and KIA
Every entrepreneur for income tax gets the SME profit exemption, including those who don't meet the hours criterion. You don't need to apply for it; the Dutch Belastingdienst applies it in your return automatically. In 2025 and 2026 it is 12.7% of your profit after the entrepreneur's deduction. One downside: if you make a loss, the exemption makes that loss smaller too.
The small-scale investment deduction is an extra deduction for anyone who invests in business assets in a year, such as tools, a machine or fixtures. In 2026 it is 28% of an investment total of €2,901 to €71,683; below €2,901 you get nothing, and an asset costing less than €450 does not count. The KIA is separate from your depreciation: you depreciate the asset as usual and you get the deduction. The brackets above that and what is excluded are in the guide on the KIA.
What it asks of your records
All four schemes start from your profit, and that profit comes from your records: your turnover, your costs and your depreciation. For the self-employed and starter's deductions you must also be able to show that you reached the 1,225 hours. So from day one, keep track of what you worked on, including the hours for quotes, bookkeeping and finding clients.
In booxx you build that profit up during the year from your invoices, purchases and receipts, and an asset you record as a fixed asset depreciates by itself. Under IB & Zvw reservation you indicate whether you meet the hours criterion and whether you are a starter; the estimate of what to set aside then deducts the self-employed deduction, the starter's deduction and the SME profit exemption, and shows the full calculation. The software doesn't track hours — use your calendar or a time-tracking tool for that. It works in Dutch, English, Polish, Hungarian and Romanian, and you can try it for 90 days without a payment method.
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Updated October 2, 2026. General explanation of the Dutch rules, not tax advice — for your own situation, decide together with your accountant or the Dutch Tax Administration.
Frequently asked questions
How much is the self-employed deduction in 2026?
€1,200, if you are an entrepreneur for Dutch income tax and meet the hours criterion. If you have reached state pension (AOW) age at the start of the year, it is half. If you are a starter, up to three times €2,123 starter's deduction is added.
Do I get the SME profit exemption without 1,225 hours?
Yes. For the SME profit exemption you only need to be an entrepreneur for income tax. In 2026 it is 12.7% of your profit after the entrepreneur's deduction and is applied in your return automatically.
What is the self-employed deduction worth after tax?
Not simply 37.56% of €1,200: the deduction also reduces your SME profit exemption and feeds through into the Zvw contribution and the tax credits. With no other income it saves, in 2026, about €100 in tax and Zvw together at €25,000 profit, about €479 at €45,000 and about €580 at €65,000. Work out your own amount with the net income calculator.
Can I skip the starter's deduction in one year and use it later?
No. If you are entitled to the starter's deduction, it is added to the self-employed deduction; you cannot choose not to use it in a given year. If the deduction exceeds your profit, you have a loss that you offset against other income or in other years.