Financial glossary

A statement is the official record of what happened in your account. Two formats are common: • PDF — human-readable. Useful for keeping or printing. Hard to extract data from. • CSV — machine-readable. One row per transaction, with columns for date, description, amount and counterparty. Perfect for importing into household ledgers or spreadsheets. Of the big Dutch banks, ING and KNAB deliver CSV in a format Okidoky recognises automatically. Other banks (ABN AMRO, Rabobank, SNS, bunq, Triodos) also deliver CSV, but with different column names — for those banks Okidoky asks you once to map the columns (which column is the date, which is the amount, etc.).

On a loan, each monthly payment usually has two parts: • Repayment (aflossing) — reduces your debt. Comes off the outstanding principal. • Interest — cost of the borrowed money on the remaining principal. Interest shrinks as you repay. Two common loan shapes: • Annuity loan — equal monthly totals over the term. Lots of interest early, little repayment; reversed towards the end. Common for mortgages. • Linear loan — equal repayment per month. Month 1 is the most expensive (highest interest), later months drop. Over the term you pay less total interest than an annuity. Most loans allow penalty-free extra repayment up to a certain percentage per year (for mortgages typically 10-20%). Extra repayment directly saves interest.

Deductions work through your tax bracket, not euro-for-euro. If your marginal tax rate is 37.07% and you have €1,000 in deductions, you pay €370 less tax — not €1,000. For higher incomes (49.50% bracket) the same €1,000 deduction is worth €495. It's important to have realistic expectations: deductions reduce your assessment, they don't triple your budget. A deduction must always be provable: invoice, bank statement, or other document. On your return you only enter amounts; the Tax Office can request proof up to 5 years later. Whoever says 'I made donations' without deposit slips risks correction plus fine. For freelancers: keep records for 7 years per the fiscal retention requirement (Article 52 AWR).

AOW forms the first pension pillar in the Netherlands. Anyone with fully accrued rights gets roughly the same amount — in 2026 around €1,100/month gross for singles, around €750/month per person for cohabiting couples. That's a key distinction: AOW partnership status determines how 'cohabiting' is treated fiscally. The big pitfall: years you worked ABROAD don't count toward AOW accrual. Someone who worked 10 years in Germany gets 20% less AOW (10×2%). You can fill that gap with voluntary insurance via SVB (Social Insurance Bank), but only within 10 years after the missing period. Check your accrual status at svb.nl or mijnsvb.nl with DigiD — at least once before you turn 60. AOW is a pay-as-you-go system: workers pay for current pensioners. That makes it politically fragile and regularly subject to reform debate.

The AVG (short for 'Algemene Verordening Gegevensbescherming') has regulated since 25 May 2018 how companies may handle your personal data. It determines what a company may do with your name, email, transaction history and other personal data. You also have rights: access, correction, erasure, data portability. Every company processing personal data in the EU (or with EU citizens as customers) must comply. Fines up to €20 million or 4% of revenue for violations.

A budget is not a strict rule set — it's a COMPASS. You divide your expected income across categories (rent, groceries, savings, fun things). This shows whether it's realistic and where you can adjust. At personal level a budget can be simple: 50% necessary expenses, 30% wants, 20% savings (the '50/30/20 rule'). But every situation differs — Okidoky prefers categories over strict rules.

A receipt shows what you bought for what, for which amount and at what moment. Typically contains: store name, VAT number, article lines with prices, VAT amount, total, payment method and date/time. For consumers, receipts are handy for returns and warranty. For freelancers and companies they are legally required to keep for 7 years as proof for bookkeeping.

Gross pay is the 'agreed' salary in your employment contract — the number calculations are done on, not the number you receive. When does gross actually matter? • **On a mortgage or rental application** — landlords and banks look at gross annual income to gauge maximum borrowing capacity. • **In salary negotiation** — your employer thinks in gross; you want to think in net. A 10% gross raise ≠ 10% more net due to progressive taxation. • **For assessing secondary benefits** — pension percentages, bonuses and holiday allowance are usually expressed as a percentage of gross. • **On the jaaropgaaf** — the Tax Office works with gross fiscal pay; that's what appears on the annual statement. For day-to-day budgeting: forget gross, work with net. You can't spend your gross salary.

BSN is not a secret number — it's visibly on your passport, driver's licence, and ID card, and you must share it regularly: with your doctor, employer, health insurer, bank (opening an account), and landlord (signing a lease). It's identification, not a password. Actual security sits around your BSN, not in the number itself: institutions using your BSN must link it to additional verification (DigiD, physical ID, password, 2FA). Leaking your BSN on its own isn't catastrophic, but combined with your name + birth date + a limited attack surface a criminal could commit fraud in your name. For expats and newcomers: you receive the BSN upon registration with the municipality (roughly 5 working days after an appointment). Without a BSN you can't open a bank account or work officially. Also the first item on the agenda for foreign students. Your first BSN card is sent by post.

BTW stands for Belasting Toegevoegde Waarde — known internationally as VAT. The Netherlands has three rates: • 21% (high rate): most products, services, electronics, software • 9% (low rate): food, books, magazines, hospitality, hairdressers • 0% (zero rate): export, international transport As a consumer you pay VAT on every purchase (it's in the price). As a freelancer or entrepreneur you charge VAT to clients, but can reclaim VAT you paid yourself (VAT return).

The BKR records two kinds of information per credit: (1) the factual data (amount, term, provider) and (2) an optional 'exception code' if something went wrong. The latter is what people call 'negative BKR' — codes A (arrears), 1 (formal payment plan), 2 (debt called due) up to 4 (written off). A negative notation stays visible for 5 years AFTER repayment, not from when it arose. The biggest misconceptions: 'BKR means no more loans' (not entirely — with small negative codes many applications are still possible) and 'BKR is about my whole life' (no, open positive loans actually help — they prove you pay on time).

Categories are how you cut your finances into pieces that have meaning for you. Popular categories in personal finance: Groceries, Housing (rent/mortgage/energy), Transport, Insurance, Fun things, Savings. A good category structure has ~8-15 categories: too few gives unclear picture, too many makes categorizing tiring. In Okidoky you can manage categories yourself, with icons and colors.

In the Netherlands credit cards are less dominant than in the US or UK: we mostly pay directly via iDEAL or debit card. So in the Netherlands you can comfortably live without a credit card for years. But for three situations it's useful: (1) foreign reservations — hotels, car rental and some airlines want a credit-card guarantee even if you ultimately pay a different way; (2) foreign purchases in dollars/pounds — credit cards apply a reasonable exchange rate, debit cards often worse; (3) consumer protection on large purchases — chargeback claims are sometimes easier than going via the merchant. The trap isn't having one, it's using it: 'pay the minimum' is financial poison. Any balance not paid off within the interest-free period compounds at 15-20% per year — higher than almost any other consumer debt. Mentally treat a credit card like a debit card: whatever you spend on it, you must ALWAYS be able to settle at month-end.

CSV is the universal exchange format for financial data — every bank, accounting package and spreadsheet tool handles it. The structure is simple: the first row is usually a 'header' with column names; every subsequent row is one transaction. Where does confusion come from? • **Delimiter** — the Netherlands often uses semicolons (;), English-speaking countries use commas (,). Okidoky detects both automatically. • **Decimal separator** — NL uses a comma (€12,50); CSV often uses a period (€12.50). Okidoky handles both. • **Date format** — dd-mm-yyyy (NL) or yyyy-mm-dd (ISO) or mm/dd/yyyy (US). Okidoky detects the format from the data. Can't import a file directly? Open the CSV in a plain text editor (not Excel — that sometimes corrupts the format) to check whether the first row contains column headers and whether characters look right.

The €100,000 cap is a protection maximum, not an insured amount. Above it you're theoretically a creditor of the bankrupt bank, which in practice means: months to years of waiting and often only partial recovery. The cap applies per BANK per account holder — so if you and your partner each have €100,000 at the same bank but on separately-titled accounts, both are fully covered. A joint 'AND/OR' account in both names counts as one holder for the cap. What often goes wrong: Dutch online-broker savings accounts are NOT always under DGS — the broker sometimes forwards your money to a partner bank. And crypto platforms like Bitvavo or Coinbase are NOT under DGS, despite being marketed as 'wallets'. Always read the prospectus.

DigiD has three security levels: (1) basic (password only) — no longer sufficient for most services; (2) SMS verification — a code sent after login; (3) DigiD app with face recognition or fingerprint — since 2020 the most-used level, required for many health and tax services. Security: DigiD itself isn't 'hackable' through a personal password leak — the activation code arrives by post and can't be reproduced elsewhere on paper. But phishing attacks do occur where criminals try to get you to log in on a fake site. Rule of thumb: open DigiD ONLY via digid.nl directly, never via an email link. The Tax Office and SVB do not send DigiD links in emails — if you see one, it's phishing. Losing access: if you lose your password, request a new activation code at digid.nl/vraag-activeringscode-aan. It arrives within 3 working days by post. If your DigiD has been revoked (e.g. after long inactivity) you'll need to re-register — again by post.

GDPR and AVG are the same regulation, just English and Dutch abbreviation. Since 25 May 2018 this law applies throughout the EU and binds every company processing personal data. Core rights: access to your data, correction of inaccuracies, erasure ('right to be forgotten'), portability (transferring your data), objection to processing. Every company must have a clear privacy policy and — at high-risk processing — appoint a Data Protection Officer.

A 'huishoudboekje' is the classic Dutch way to track income and expenses for a family or individual. Originally literally a booklet (like a notebook from HEMA), nowadays more often an Excel sheet or app like Okidoky. The difference from 'kasboek' (ledger): huishoudboekje is specifically for household/personal finances; kasboek is a broader term also used for associations or small businesses.

In the Netherlands there are two main forms that make tax sense in 2026: • **Annuity mortgage** — fixed gross monthly amount; early on mostly interest, later increasingly amortisation. Eligible for mortgage-interest deduction for up to 30 years. • **Linear mortgage** — fixed amortisation per month, plus interest on the remaining balance. Your gross monthly cost drops every year. Also 30 years of deduction. The 'interest-only mortgage' (only interest, no amortisation) still exists for legacy cases but since 2013 gives NO new mortgage-interest deduction. That makes it tax-unattractive for starters. The maximum mortgage you can get is the *leennorm*, determined yearly by the Nibud based on your income, any partner's income, and outstanding debts (BKR records count). In 2026 the mortgage-interest deduction cap is the top tax-bracket deduction (gradually phased down toward 37.07%).

iDEAL has been since 2005 the most popular online payment method in the Netherlands: you click 'Pay with iDEAL', choose your bank, get redirected to your bank app or internet banking, and confirm the payment. Within seconds the money is transferred. For the merchant/webshop it's directly guaranteed money (no chargeback risk like with credit card). For you as user it's safe (you log in at your own bank, not at the merchant) and free. iDEAL is owned by Dutch banks jointly.

An incasso (also: automatic direct debit, SEPA direct debit) is when you give a company permission to periodically withdraw an amount from your account. You sign an authorization once, then it happens automatically. Advantage: you don't have to pay every month manually. Risk: incorrect withdrawals. Protection: you can reverse every direct debit within 8 weeks without explanation at your bank (up to 13 months for unauthorized direct debits).

Inflation feels abstract but is concrete: the same shopping cart, the same energy bill, the same rent — a little more expensive every year. What many people miss is that inflation isn't the same for everyone. Someone whose budget is heavily weighted towards energy and groceries feels a 5% wave harder than someone with mostly fixed housing costs and low variable spend. That's why the Netherlands' CBS also publishes inflation broken down by household income group. For your ledger, the key lesson is: don't just look at absolute amounts, look at percentages of total. If your groceries were €400/month two years ago and are now €460, that's ~15% — compare with the official inflation number to see whether you're hit harder or less than average.

The jaaropgaaf is the most important tax document of the year for any employee or benefits recipient — and simultaneously the one most often 'lost' when needed. Standard fields: gross pay subject to wage tax, withheld wage tax, work-credit (arbeidskorting), employer health-insurance contribution and (for employees) pension premium. For DigiD pre-filled returns the data flows directly, but the paper version stays important because mortgage and rent-benefit applications often still want the original. Had multiple employers in the same year? Then you get multiple jaaropgaven — your return totals only match if you include all of them. Late delivery: ask your former employer for a copy; they're required to be able to re-issue for at least 7 years.

A kasboek is the classic administration form: a chronological overview of all money movements of a person, family, association or small business. Origin in the time of 'kas' — literally cash in a till — but now encompasses all money movements, including bank-based. Difference from bookkeeping: a ledger focuses on cash flow (what came in, what went out). A full bookkeeping also has a balance sheet (what you own at a moment). For personal use a ledger is enough. For companies often insufficient.

A 'kwitantie' differs from a regular cash register receipt: it's a more formal document confirming receipt of money. Often with signature of the recipient, date, amount and reason. Legal proof that a certain amount was paid at a certain moment. In modern practice (digital payments, bank transfers) a kwitantie is used less often — the bank statement is often already proof. But needed for cash payments, rent payments to private parties, or formal business transactions.

Loonheffing is NOT an extra tax — it's an advance payment on tax you'd owe anyway. The employer estimates with each payroll how much tax you'll probably owe, withholds it and remits it. At the yearly return it's then settled: usually it's roughly right, sometimes you get money back (for example if you had deductions the employer didn't know about), sometimes you have to pay extra (most common cause: multiple employers each applying the general tax credit). Important to know: if you have two part-time jobs, only one employer can apply the tax credits. Otherwise you build up a payment shortfall automatically. Arrange this via the form 'Loonheffingen — verzoek inhoudingsplichtige niet toe te passen' at the second employer.

Net pay is the number that actually shows up to live on — all the other pay numbers (gross, fiscal pay, etc.) are intermediate. For a household ledger net pay is the only relevant income figure. The gap between gross and net is typically 30-45% for middle-income Dutch earners, rising for higher incomes thanks to progressive taxation. Your payslip itemises what comes off: • Wage tax (income tax + national insurance) • Pension premium (if employer pension) • Other premiums (e.g. employer insurance) • Optional: lease bike, bike plan, union dues, wage garnishment Alongside your usual monthly net, you may also receive one-off amounts that are NOT your standard net: holiday allowance (typically paid in May), year-end bonus, 13th month, bonuses. Those don't belong in your 'normal month' budget — keep them separately categorised.

The emergency fund is the first building block of financial calm, before investing and big goals. What separates it from 'just saving' is intent: you only touch it for real emergencies, not for an impulsive purchase or a holiday. That's why you park it in a separate savings account with a name like 'Emergency fund' or 'Do-not-touch fund' — behavioural design helps more than pure discipline. A sensible build-up sequence: start with €500 as a first target (covers small setbacks like dentist co-pays), grow to 1 month of fixed costs, then to 3 months. For freelancers and people with irregular income, 6 months is more of a rule than a guideline.

The Dutch pension system is collective and fragmented at the same time: AOW is the same for everyone, pillar 2 depends on your employer (the same job at a large employer accrues more than at a small firm), and pillar 3 you arrange yourself. Mijnpensioenoverzicht.nl is the free tool where you see AOW + all employer pensions in one place — check it at least once a year. For freelancers, pension is the most under-discussed risk: you earn now but nothing accumulates automatically. Options are FOR (Fiscale Oudedags Reserve, being phased out — check current rules), an individual annuity with tax advantage, or long-term investing. 'I'll handle it later' is the expensive choice: compound interest over 30 years is substantially different from over 10 years.

PSD2 is an EU directive from 2018 that does two things: 1. Determines stricter security for online payments (Strong Customer Authentication — 2FA). 2. Gives third parties (like fintech apps and accounting software) the right to — with your explicit consent — perform payment initiation or account access at your bank. For you it means: you can give an app access to read your bank transactions. The bank must allow this, and you always retain control. Okidoky does not use a PSD2 connection: you import a CSV file from your bank yourself.

Interest comes in two forms: • Savings rate — the percentage your bank pays you on savings. Typically 1% to 3% at large Dutch banks (2026), slightly higher at online savings banks. • Borrowing rate — the percentage you pay on borrowed money. Mortgages around 4-5%, personal loans 5-10%, overdraft 10-14%, credit cards 15-20%, and 'buy-now-pay-later' often 12-16% if you don't pay on time. Compound interest (interest on interest) is what grows savings over years — and what makes unpaid debts explode.

Balance is a snapshot — it changes every time something is added or deducted. Important distinction: • Available balance = what you can spend right now. • Booked balance = what's left at end-of-day after all scheduled debits. Those two sometimes differ significantly if there are direct debits or credit-card charges in the pipeline. In your household ledger you typically look at the booked balance because that predicts what's actually left.

SEPA has been since 2014 the European standard for euro transfers and direct debits. Before that time a transfer to Germany was more expensive and slower than a domestic transfer. Since SEPA they are treated identically: same speed, no extra costs. Core elements: IBAN (International Bank Account Number, your account number), BIC (bank identification, usually filled in automatically), SCT (SEPA Credit Transfer = regular transfer), SDD (SEPA Direct Debit = direct debit). 36 countries participate, including non-EU countries like Switzerland and Norway.

Savings serve a different purpose than money in your checking account. Three layers many people keep separate: • Emergency fund — for unexpected expenses. Typically 3-6 months of fixed costs. Sits in an ordinary savings account, fully liquid. • Goal savings — for specific plans (vacation, house, car). A separate savings account per goal makes progress visible. • Long-term — what you won't need for 10+ years. That's where investing (an index fund) can be considered, because inflation otherwise erodes purchasing power. Under the Dutch/EU Deposit Guarantee Scheme, savings at a Dutch or EU bank are protected up to €100,000 per bank per account holder.

Toeslagen are a financial contribution from the Dutch tax authority to households with lower incomes. Four main types: • Huurtoeslag (rent benefit) — for renters of affordable homes • Zorgtoeslag (healthcare benefit) — for paying health insurance • Kinderopvangtoeslag (childcare benefit) — for working parents with childcare • Kindgebonden budget — extra financial support with children You apply for them at the tax authority. Amount depends on income, household situation and specific circumstances. Paid monthly as advance — after the year it's recalculated.

Fixed expenses are the predictable expenses you have anyway, regardless of lifestyle that month. Typical fixed expenses: • Rent or mortgage • Utilities (energy, water, internet) • Insurance (health, contents, car) • Subscriptions (Netflix, Spotify, gym, phone) • School fees or tuition Opposite to fixed expenses are 'variable expenses' (groceries, going out, clothing) that differ per month. Insight into the distinction helps with budgeting: fixed expenses are hard to reduce short-term, variable ones are.

A ZZP'er is someone registered at the Chamber of Commerce as independent entrepreneur, but doesn't employ workers. So: freelancer, self-employed carpenter, self-employed consultant, self-employed photographer. Legally ZZP differs from a BV or company. Fiscally: ZZP'ers pay income tax on their profit (not corporate tax), have right to self-employed deduction and SME profit exemption with enough hours. Administratively: VAT return per quarter, yearly income tax. About 1.3 million ZZP'ers exist in the Netherlands (2024).