Amsterdamse gracht

Payroll tax

Payroll tax is a direct tax that is levied on the wages of employees or persons treated as such. In addition, so-called social contributions are levied on the wages of employees in many countries. Legally, these are two different types of levies.

The payroll tax is a tax and is therefore a general means of public funding. Social premiums, on the other hand, are intended to finance social insurance. For payroll tax, the taxpayer is not entitled to a specific performance from the government side, where this is the case with social insurance contributions (the taxpayer is legally insured for a certain risk for which he and / or his employer may or may not be legally compulsory premiums is due). The difference is especially important in cross-border situations.