Jaarruimte (Pension Reserve)

Jaarruimte (annual margin) is the maximum amount Dutch residents can contribute tax-deductibly to supplementary pension savings in a given year. It applies to individuals who have insufficient occupational pension coverage or gaps in their pension accumulation. Contributions within your jaarruimte reduce your taxable income, providing immediate tax relief at your marginal rate (up to 49.50%).

Jaarruimte is calculated based on your income, your existing pension entitlements (Factor A), and whether you had gaps in previous years. The Dutch tax authority determines your annual margin annually. If your employer contributed to a pension in previous years, your available jaarruimte is reduced to prevent double pension accrual. You can build up unused jaarruimte from the past 7 years (reserveringsruimte). Contributions can be made to annuity products (lijfrente) or tax-advantaged pension investment accounts.

Real-World Example If Pieter is self-employed in 2026 with €80,000 income and no occupational pension, his jaarruimte might be approximately €11,000 (based on Factor A calculations). If he contributes €11,000 to a lijfrente account, he deducts this from Box 1 income. At the 49.50% tax rate, he receives a tax refund of approximately €5,445, effectively reducing his net contribution to €5,555.