The Dutch hours criterion for self-employed professionals

The hours criterion in the Netherlands

The minimum of 1,225 hours is called the hours criterion (in Dutch). Read exactly what you need to comply with and whether you are also entitled to tax benefits if you do not meet the hours criterion.

Why is it important to meet the hours criterion?

If you meet the hours criterion, you are eligible for these 4 tax benefits:

• Private business ownership allowance (zelfstandigenaftrek)
  A fixed deduction from your profit. In 2024, you could deduct €3,750 from your profits. In 2025, this is €2,470 euros. In 2026, it will decrease further to €1,200.
• Tax relief for new companies (startersaftrek)
  Are you eligible for the private business ownership allowance? If so, you can also claim the tax relief for new companies 3 times within the first 5 years of starting your business. In 2024, 2025 and 2026, the starters' allowance is €2,123. Once you start receiving your state pension, you will only be able to deduct half of this amount for the private business ownership allowance and tax releif for new companies.
• Working partner's abatement
  If your fiscal partner also works in your business, you may be eligible for working partner's abatement. This allows you to deduct a percentage from your profit, depending on the number of hours worked by your partner. Your tax partner is the person with whom you file your tax return.
• R&D tax credit (WBSO)
  If your business conducts research and design projects, you may be eligible for the R&D tax credit. This allows you to deduct part of the costs for your R&D from your profit.

For specific tax questions, go to the Get a head start with the Belastingdienst website. The chat function also accepts English questions. 

Which hours count towards the hours criterion?

You can count all the hours spent on your business. That includes indirect activities, such as keeping records, managing your website, and customer acquisition. And of course you count the direct hours, hours you spend working on an assignment or for a client. The hours spent preparing to start your business also count.

The hours criterion counts the number of hours spent on your business during a calendar year, so from 1 January until 31 December. The date on which you started your business makes no difference. Did you start on 1 July? To benefit from the tax schemes, you still need to spend 1,225 hours on your business.

How do I track my hours?

You may track your hours however you want. That could be an overview in Excel, an app or your accounting software. But if, for example, you have a shop or practice that is open 5 days a week, your opening hours already make it clear that you meet the hours criterion. You do not have to keep track of hours then.

The Tax Administration. sometimes checks whether you have indeed worked 1,225 hours or more on your business. This is why you must keep your records for 7 years. You can use e-mails or your diary, for example, to show when you had appointments. You must keep records about real estate for 10 years.

What if you do not meet the hours criterion?

Do you spend less than 1,225 hours on your business in a calendar year? Then you cannot make use of the private business ownership allowance and tax relief for new companies.

But if you are an entrepreneur for income tax purposes, you are entitled to the SME profit exemption. This is because the hours criterion does not apply here. The Tax Administration automatically process the SME exemption when you file your income tax return as an entrepreneur.

How does the Tax Administration check the hours criterion?

Checks on whether your meet the hours criterion are based on what you can prove, such as your timesheets, diary, emails, and messages. The number of hours you spend on your business must match your turnover. The Tax Administration calls this 'plausible'. It is not plausible that you have barely any turnover if you worked 1,225 hours.

But if you have just started your business, you will have more unpaid hours. For example, because you have yet to find clients. The Tax Administration will accept that in the beginning. Has your business existed longer? Then you must also have more turnover.

How many hours per week is 1,225 hours?

The hours criterion of 1,225 hours is calculated per year. How you divide this over the days or weeks is up to you. It does not matter for the Tax Administration how many hours you work per week.

An example: if you work 32 hours per week for your business and take 4 weeks holiday per year, you work 1,536 hours and meet the hour criterion.

Part-time entrepreneur

There is no reduced hours criterion for part-time entrepreneurs. So, meeting the hours criterion can be a challenge. Because even for entrepreneurs with a shorter working week, the hours criterion is 1,225 hours. Have you been running a part-time business for more than 5 years? Then it also applies that you must spend more time per calendar year on your business than on other activities, such as salaried employment.

Maternity leave

Have you been on maternity leave? Then you may count the hours from those 16 weeks towards the hours criterion. You then count the average number of hours you normally work per week.

What is the reduced hours criterion for work disability?

A reduced hours criterion applies to entrepreneurs who receive a benefit for work disability. If you receive a Wajong, WIA, WAO, or Ziektewet benefit, the hours criterion is usually 800 hours (in Dutch). Before you start a business, always discuss your plans with the benefits agency, so you know what the effects on your benefit will be.

Does the 1,225 hours criterion also apply to a VOF, maatschap, or BV?

If your legal structure is a VOF (general partnership) or a maatschap (professional partnership), you can profit from the private business ownership allowance, the tax relief for new companies, and other types of tax relief. Every partner has to spend 1,225 hours on the business, and file their own income tax return. It can happen that one partner does meet the hours criterion while another partner does not.

A BV (private limited company) cannot make use of the private business ownership allowance or the tax relief for new companies.