Care provider paid from a personal budget: which taxes do you pay?
Written by Ilias Aarrass6 min read · Published on · Last reviewed on 
In short
What a care provider receives from a pgb is always taxed: as wages under an employment contract, as profit if they are an entrepreneur, or otherwise as income from other activities, even when caring for family. Tax is only withheld under an employment contract; assessed nursing and personal care are usually exempt from VAT.
- Pgb income is always taxed, even when caring for a family member.
- Only under an employment contract does the SVB withhold payroll tax.
- Those who are not entrepreneurs do not get the self-employed deduction.
- Assessed nursing and personal care are usually exempt from VAT.
With a personal budget, a pgb, someone who needs care chooses who provides it. That can be a care agency, but also a self-employed person, someone from the neighbourhood or a family member. The Social Insurance Bank pays the care provider from the budget. There is much confusion about how that payment is taxed. The SVB is neither an employer nor a client, and the tax usually does not sort itself out. This article covers the three possible situations, what you need to declare and how VAT works.
Three types of care agreement, three tax outcomes
The budget holder signs a care agreement with you. Which form it takes largely determines how you are taxed.
| Situation | Tax treatment | Tax |
|---|---|---|
| Employment contract | Employment income | Payroll tax is withheld, annual statement from the SVB |
| Contract for services, as an entrepreneur | Business profit | Own return, with entrepreneur's allowance if you qualify |
| Contract for services or with family member, not an entrepreneur | Income from other activities | Own return, without entrepreneur's allowance |
Are you an entrepreneur?
If you work under a contract for services, the question is whether you are an entrepreneur for income tax. That depends on your independence, the number of budget holders and other clients, whether you seek new clients and whether you bear business risk. A nurse with their own practice and ten clients, some of them with a pgb, is an entrepreneur. Someone caring for one family member almost never is.
If you are not an entrepreneur, what you receive is still taxed, as income from other activities. Courts have confirmed this repeatedly, even for care given to one's own parent or child. You declare it yourself in your income tax return and also pay the income-related health insurance contribution on it. Costs you genuinely incur for the care are deductible, but you do not get the self-employed deduction or SME profit exemption.
And VAT?
If you are an entrepreneur for VAT, the question is whether your care is exempt. Nursing and personal care based on an assessment, for example under the Long-term Care Act, the Health Insurance Act or the Youth Act, usually fall under the exemption. For support, coaching or domestic help this is less obvious and depends on the exact service and the scheme the budget comes from. See VAT exemption for care.
If in doubt, ask the tax authorities for certainty in writing, or use the small business scheme if your taxable turnover is low. Anyone who is not an entrepreneur has nothing to do with VAT.
Effects on benefits and your partner
What you earn from a pgb counts towards your assessment income. So report an expected increase to the benefits agency in good time; see benefits and your profit. If you care for your own partner with a pgb, that income is also simply taxed, and it may affect how deductions are divided between you; see tax partner.
If you work as a self-employed care provider with several clients, also read bookkeeping for freelancers in care.
Frequently asked questions
Does the SVB withhold tax on my pgb payment?
Only with an employment contract. With a contract for services or an agreement with a family member, the SVB pays gross and you file your own return.
Is pgb money for caring for my mother taxed?
Yes. Even without being an entrepreneur it is taxed, as income from other activities in box 1.
Do I get the self-employed deduction as a pgb care provider?
Only if you are an entrepreneur and meet the hours criterion. With one budget holder or care for family you usually are not.
Sources
- Pgb: providing care to someone closeRijksoverheid · rijksoverheid.nl
- Exemption in healthcareBelastingdienst · belastingdienst.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
