What is Net Effective Rate (NER) for freelancers?

Net Effective Rate (NER) is what a freelancer actually keeps per hour of client work, after subtracting business costs and tax from annual revenue and dividing by billable hours only, not total hours worked. It is a more honest number than a quoted hourly rate, because it accounts for unbillable time such as admin, acquisition, and illness, plus the tax burden a quoted rate never shows.

How much tax does a ZZP'er pay in the Netherlands in 2026?

It depends on profit, not revenue. Dutch income tax (Box 1) has three bands in 2026: 35.75% up to €38,883, 37.56% up to €78,426, and 49.50% above that. On top of that, self-employed people pay a ZVW healthcare contribution of 4.85% of taxable profit, capped around €3,851. Two deductions reduce the taxable base first: the zelfstandigenaftrek (€1,200 in 2026) and the MKB-winstvrijstelling (12.70% of profit after that deduction), which is why most ZZP'ers pay a lower effective rate than the bracket percentages suggest.

Can foreign freelancers claim the zelfstandigenaftrek?

Yes. The zelfstandigenaftrek is not tied to nationality. It requires meeting the urencriterium: at least 1,225 hours per calendar year spent on the business, which includes admin, acquisition, and professional development, not only billable client work. Any registered ZZP'er who meets that threshold qualifies, regardless of where they are from.

How do I compare a freelance rate to a salaried job in my home country?

Convert both to a net, per-hour basis instead of comparing gross figures. A salaried role typically includes employer-funded pension contributions, paid holiday, and sick leave that a freelance rate has to cover out of pocket. Peil's NER calculation and employment-equivalence comparison are built for exactly this: showing what a comparable salaried package would actually net you, so the comparison is apples to apples instead of headline rate to headline salary.

What Is Your Net Effective Rate — And Why It Changes Everything

The illusion of the hourly rate

€85 an hour. That sounds solid, especially set against a salaried package you might have had elsewhere in the world. Convert it to an annual figure and freelancing in the Netherlands looks like a clear upgrade.

But that comparison doesn’t hold up, and the devil as always, lies in the details.

As a ZZP’er you fund your own pension, arrange your own health insurance on top of a mandatory contribution, and have no paid leave. Every day you don’t invoice, because you’re sick, on holiday, writing proposals, or simply between assignments, you earn nothing. Your hourly rate is what you invoice. Your Net Effective Rate (NER) is what’s actually left of that in the end.

Your rate may sound rosey but not factoring in those elements is the difference in assuming things are fine and knowing it.

How to calculate your NER

The formula is simple, the due diligence to have all of the inputs is the harder part:

NER = (Annual revenue − Costs − Tax) ÷ Billable hours

This number gives you the difference between your rate and what you take home in the end. It might paint a more sober picture opposed to salaried employment. Another benefit it can give is projection: what does this look like if the rest of the year continues as it has, and what happens if you’re out for a month?

Peil calculates your NER continuously from your actual data: your rate, your costs, VAT, income tax, the Dutch small-business profit exemption, the self-employment deduction, and your real billable ratio.

Three things that quietly erode it

1. Hours you can’t bill

Acquisition, admin, networking, proposals, professional development — everything that keeps the business running but that no client pays for. The average ZZP’er spends 30–35% of their working time on activity that generates no revenue.

If you charge €85 an hour but only bill 65% of your time, your effective return is already down to about €55, before tax and before costs.

2. Structural costs

Accounting software, professional liability insurance, tools, a home-office setup, a phone plan. Small per month, but they add up over a year. Every euro of cost is a euro less in your NER.

3. The tax layer

This is the one expats consistently underestimate, because it doesn’t work like PAYE withholding. As a ZZP’er you pay income tax on your profit. That falls under Box 1, the Dutch income tax category for salary and business income, split into three bands for 2026: 35.75% up to €38,883, 37.56% up to €78,426, and 49.50% above that. On top sits the ZVW-bijdrage, an income-dependent healthcare contribution of 4.85% of taxable profit, capped around €3,851 a year — separate from the monthly premium you already pay your insurer, and easy to forget.

The offsetting side: you’re entitled to the zelfstandigenaftrek (self-employment deduction, €1,200 in 2026, legislated to phase down to €900 by 2027) and the MKB-winstvrijstelling (small-business profit exemption, 12.70% of profit after that deduction). Neither depends on where you’re from. Both depend on meeting the urencriterium: 1,225 hours a year spent on the business, not just billable client work.

What counts as a healthy NER

There’s no universal number, but there’s a useful reference point.

Rather than a rule of thumb, benchmark your NER against the net hourly pay of a comparable salaried role — in the Netherlands, or wherever you’d otherwise be employed. If you quote €85 an hour as a senior developer, but a comparable salaried position nets someone €55 an hour after tax, pension, and paid leave are accounted for, then a NER of roughly €48 in that scenario is actually a step down, not the upgrade the headline rate suggested.

If your NER ends up below what that comparable role would net you, you’re funding your own independence out of pocket. Worth knowing before it becomes a surprise at tax time, not after.

Peil offers an Employment Equivalence tool that lets you build the comparison yourself: enter a salary you’re weighing against freelancing (a previous role, or one you’re considering) and it works out the equivalent gross salary or freelance rate, factoring in what an employer would otherwise fund on your behalf — pension contributions, statutory holiday allowance, the value of paid vacation and sick leave. Run it the other way too: enter a target net income and see what freelance rate actually gets you there. A first version is free to run in the freelance-vs-employment calculator, no account needed.

The caveat is that an employee still has legal protections a ZZP’er doesn’t. That said, the ground is shifting — since 1 July 2026, a freelance rate at or below roughly €38/hour creates a legal presumption of employment, part of a broader tightening against freelancer exploitation. The comparison is a planning input, not a verdict, and it earns its keep most at the point of change — weighing a salaried offer, deciding whether to go freelance, renegotiating a rate — rather than as a number you’d check daily. Still worth having ready before that moment, not during it. See the NER guide for more on the underlying mechanics.

From NER to financial clarity

Your net effective rate functions like a compass. Once you know what you actually keep per hour, sharper decisions follow: how much you need to earn to build a healthy buffer and pension, whether a project is worth taking or letting go, and planning a holiday with your mind at ease.

Which is why we built Peil. Not a dashboard full of charts for their own sake, but a clear reading: where do you actually stand right now?

And from there: what to do if the answer isn’t the one you hoped for.

Calculate your own Net Effective Rate — free, no account needed. Peil then keeps measuring it from your real numbers, free to try.