The rate for anonymous employees in the Netherlands

The law provides that the withholding agent must apply the so-called 'anonymous rate' if one of the following situations occurs:

1. The withholding agent does not receive the necessary employee payroll information from the employee (before the first working day or on the first working day if the employee is technically hired on this day), or the withholding agent does not identify the employee (which includes, amongst other things, the obligation to establish the permanent living address in or outside the Netherlands).
2. The withholding agent does not keep proper records nor store the necessary data correctly with the payroll administration.
3. The withholding agent knows or reasonably should have known that the employee payroll information provided by the employee is not correct.

A typical example of a situation wherein the anonymous rate must be applied is when a BSN number cannot be provided on the first working day.   

When the withholding agent applies the anonymous rate, the withholding agent must withhold 52% salary tax. The withholding agent may also not take standard deductions and allowances into account.

If, during a later tax period, the default that triggered the application of the anonymous rate is repaired, the application in earlier periods may only be reversed in the same tax year (as of 2023). The employee can claim the over-withheld payroll tax (if any) in the annual income tax return.