When you work for an employer, the tax is paid automatically. You have to pay tax on every source of income, including income from the work-from-home industry. In some cases, the client pays tax and you do not have to worry about this yourself, but you may also be responsible for paying tax yourself. It is important that you are informed about this.
Homework and taxes
Working from home is a source of income and you have to pay tax on income. The amount of tax you have to pay depends on how much you earn, what industry you work in and how your household is structured. The tax authorities have introduced special rules for people who earn their income from working from home.
When you work for an employer, you always have to deal with payroll taxes and possibly payroll tax credits. You can use this discount to pay less and if you have multiple employers, you can choose one for which you want to activate the payroll tax credit. This works very differently for home workers. As a homeworker you have nothing to do with payroll taxes. You do not have to pay payroll taxes to the tax authorities. However, this is not the case in all cases. For example, if you pay people to take over your work or people help you with your work, you are obliged to pay payroll tax on the wages you pay these people.
In fact, you have to pay tax on every income. The Tax Authorities make no exception for home workers. The tax authorities will determine whether you have to pay something and how much this amount is. This of course depends entirely on the income you earn from working from home. Even if you have earned minimal money, you must declare this to the tax authorities. There is never an exemption from reporting. If the tax authorities believe that you have earned too little to pay tax, they will let you know after filing your tax return.
The percentage of your income that ultimately needs to be paid to the tax authorities depends on various factors. First of all, the amount of your income from working from home will be examined. We will then look at how your household is composed and what the total income of this household is. The number of hours you spend working from home is also included. This looks at the number of hours you have spent working from home, but also at this number of hours compared to the hours you may still be employed by an employer. Finally, the tax authorities will look at your own assets. You will have to pay more in taxes if you have a large equity than if you have no or very small equity.
Do you want to know exactly where you stand when you work from home or are planning to take on work from home? Then it is always advisable to take a look at the Tax Authorities’ website. Here you can find sufficient information about the rules for homeworkers. If you still cannot reach an agreement, you can always contact us by telephone to be advised by a tax advisor.