Can you make extra money free of tax as a business owner?
- Edited 28 September 2026
- 1 min
- Finance, Rules and laws
- Starting
- Vick ten Wolde
Many starting business owners wonder if they can earn money on the side tax-free. And if so, how much? There are many stories going around about this question. The short answer is: no. Every euro you earn counts towards your tax liability. However, thanks to tax deductions and allowances, you may end up paying little or even no tax at all.
What do you need to arrange when starting a business?
Answer the questions on Business.gov.nl and see the steps that are important in your situation.
In this article:
Why is earning extra income not tax-free?
There is no general tax-free allowance for business owners. All income is taken into account when calculating your tax. However, thanks to tax benefits, such as the SME profit and the entrepreneur , you may end up paying little or even no tax.
Do you have to pay taxes on your extra earnings?
If you earn additional income, you must pay tax on it when you submit your annual income tax return. The Netherlands Tax Administration includes this additional income in your total income and then calculates how much tax you owe.
Is the work part of your business? If so, you should declare the income as business  (in Dutch). Do you earn extra income from work that is not part of your business? If so, this income may be treated as income from other  (in Dutch). This refers to income from paid jobs or assignments that do not fall under employment or a business.
Paying taxes
Whether you end up paying tax, and how much, depends on your personal circumstances. For example, it depends on your total income and any tax relief you may be entitled to.
Example
Suppose you run a jewellery shop. Your profit from your business is €30,000. On a one-off basis, outside your normal shop and working hours, you set up a stall at a fair to sell your jewellery. You make a profit of €500 there. This profit is also part of your business. You have to declare the €500 as business profit. There is no separate tax-free allowance for this amount.
Do you have to pay tax if you make extra money with your hobby?
Do you occasionally help a friend or neighbour and receive only an expense compensation in return? If so, you do not need to declare this and you do not pay tax on it. The Tax Administration regards this as a hobby or an activity carried out in a hobby or family context.
Do you regularly carry out paid jobs for different people? If so, the Tax Administration regards this as income. In that case, you must declare the income and you may have to pay tax on it.
