Self-employed deduction and the hours criterion: how does it work in 2026?
Written by Ilias Aarrass7 min read · Published on · Last reviewed on 
In short
The self-employed deduction is € 1,200 in 2026 and you only get it if you spend at least 1,225 hours a calendar year on your business; in 2027 it drops to € 900.
- All hours count, not just billable ones: admin, acquisition, travel, training and building your website.
- In 2026 starters get the € 2,123 starter's deduction on top, at most three times in the first five years.
- The 12.70% SME profit exemption does apply without the hours criterion and comes off the profit remaining after the entrepreneur's deduction.
- If you are also employed, more than half your working time must go to your business, except during your first five years as a starter.
The self-employed deduction is one of the best-known tax benefits for entrepreneurs. It's an amount you may deduct from your profit before income tax is calculated. But the deduction gets lower every year, and you must meet conditions. This article explains how it works in 2026.
How high is the self-employed deduction in 2026?
In 2026 the self-employed deduction is 1,200 euros. That's significantly lower than in 2025, when it was still 2,470 euros. The government is deliberately phasing out this deduction: in 2027 the amount falls further to 900 euros. So it's becoming increasingly important for entrepreneurs to make good use of other costs and deductions.
What is the hours criterion?
To use the self-employed deduction, you must meet the hours criterion: you must spend at least 1,225 hours per year on your business. That's not only your billable hours, but also time for acquisition, your bookkeeping and building your website. The burden of proof is on you, so keep good time records.
What is the starter's deduction?
If you're a starting entrepreneur, you get the starter's deduction on top of the self-employed deduction. In 2026 that's 2,123 euros. You may use it up to three times within the first five years of your business, provided you meet the hours criterion. So for starters the tax benefit is considerably larger.
And the SME profit exemption?
After the self-employed deduction comes the SME profit exemption automatically. In 2026 that's 12.70% of the profit remaining after the entrepreneur's deduction. You don't have to do anything for this except run a business and make a profit; the hours criterion does not apply to this exemption.
The amounts and which hours count
The self-employed deduction has been shrinking for years. In 2026 it is 1,200 euros; in 2025 it was 2,470 and in 2027 it drops to 900. Starters get the 2,123 euro starter's deduction on top in 2026; the government wants to abolish it from 2027, but that is not final yet.
For the hours criterion, all hours spent on your business count, not just the ones you invoice. That makes the 1,225-hour threshold more attainable than it looks.
| Type of hours | Counts? |
|---|---|
| Invoiced hours at clients | Yes |
| Administration, quotes and acquisition | Yes |
| Travel time to clients and jobs | Yes |
| Trade-related training and courses | Yes |
| Building your website or workshop | Yes |
| Hours in employment on the side | No |
Worked example: what the deductions do together at € 60,000 profit
- Profit
- € 60,000
- Less: self-employed deduction 2026
- € 1,200
- Less: SME profit exemption of 12.7% on the remainder
- € 7,468
Result: Taxable profit € 51,332. The SME exemption requires no 1,225 hours; only the self-employed and starter's deductions hinge on the hours criterion
Frequently asked questions
How much is the self-employed deduction in 2026?
1,200 euros. In 2025 it was 2,470 and in 2027 it falls further to 900. The phase-down is fixed, so do not count on this benefit staying large.
What exactly is the hours criterion?
Spending at least 1,225 hours per calendar year on your business. That includes administration, acquisition, travel and training, not just paid hours. It applies per calendar year, even if you start mid-year.
How must I track my hours?
There is no mandatory format, but in an audit you must make the hours plausible. A running log with date, activity and duration works; reconstructing afterwards rarely holds up.
Do I still get the starter's deduction in 2026?
Yes: 2,123 euros on top of the self-employed deduction, at most three times in your first five years. The government wants to abolish it from 2027, but that proposal has not been passed yet. See starter's deduction ends.
Does the SME profit exemption apply without 1,225 hours?
Yes. The 12.7 per cent exemption applies to every income tax entrepreneur, regardless of hours. Only the self-employed and starter's deductions hinge on the hours criterion. Once you reach state pension age you get half the self-employed deduction; see running a business past state pension age.
Do I meet the criterion as a part-time entrepreneur?
1,225 hours is roughly 24 hours a week on average. If you are also employed, more than half your working time must additionally go to your business, unless you are a starter. See part-time freelancing alongside a job.
Sources
- Self-employed deduction 2026: € 1,200 and the hours criterionBelastingdienst · belastingdienst.nl
- Self-employed deduction down to € 900 in 2027Overheid.nl · ondernemersplein.overheid.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.
