What is the working partner deduction?
The cooperation deduction is part of the entrepreneur deduction. The deduction applies when your fiscal partner supports your business without receiving compensation of EUR 5,000 or more. To make use of this scheme, you must be an entrepreneur for income tax purposes, meet the hour criterion and your partner must contribute at least 525 hours a year.
The deduction is a percentage of your profit. The higher the number of hours your partner contributes, the higher the deduction. The percentages range from 1.25 per cent to a maximum of 4 per cent. You apply the deduction in your income tax return. The deduction reduces your profit, so you pay less tax.
Conditions for the working partner deduction
The tax authorities impose a number of conditions. You are only eligible for the cooperation deduction if:
- You are an entrepreneur for income tax purposes
- You meet the hours criterion of 1225 hours
- Your fiscal partner works in the business for at least 525 hours a year
- Your fiscal partner receives less than 5,000 euros in compensation in that year
It is important that your partner's work contributes to your business. It involves work you would otherwise have to do yourself, such as administration, customer contact, marketing or executive tasks within your business operations.
Important: keeping track of hours
A good time registration is necessary. You must be able to make it plausible that your partner works a minimum of 525 hours per year. Therefore, record the hours worked and the associated activities. Only business activities count. Household chores do not count as hours worked. A clear list of hours will help you when the Tax Administration asks for proof.
Working partner deduction 2026
The cooperation deduction has fixed percentages. The scheme works the same as in previous years. Below is the graduated scale for 2026:
| Hours worked by partner | Percentage cooperation deduction |
|---|---|
| Less than 525 | No deduction |
| 525 to less than 875 | 1.25 per cent |
| 875 to less than 1,225 | 2 per cent |
| 1.225 to less than 1.750 | 3 per cent |
| 1750 or more | 4 per cent |
The deduction is calculated on the qualifying profit. Profit from cessation, expropriation and the transfer of assets abroad is not included. Check the conditions and basis of the assisting spouse deduction.
Co-work deduction 2024 and 2025
The percentages for 2024 and 2025 are the same as the 2026 graduated scale. There is no difference in the structure of the scheme. The same distribution of hours and deduction percentages apply for all years.
Calculation example cooperation deduction
Suppose your partner contributed 1,800 hours and your profit is €50,000. Since 1,800 hours is above the 1,750-hour limit, you will be entitled to the maximum co-work deduction of 4%.
4% of 50,000 euros is 2,000 euros. You deduct this amount from your profit. After this deduction alone, a profit of €48,000 remains. Other business deductions and, subsequently, the SME profit exemption may further alter the final taxable profit. A €2,000 deduction does not equate to a payout of €2,000. Depending on your tax bracket, this can result in a significant benefit. If you work fewer hours, the percentage is lower and the deduction is therefore smaller.
What is labour remuneration?
You can opt for a work remuneration/real remuneration for your partner. If you pay your partner for the work he/she does and this remuneration is at least €5,000 in a year, you can deduct this amount from your profit in your income tax return. This can save you a lot of money.
If you pay less than €5,000, you are not allowed to deduct this from your profit. But you may then be eligible for co-work deduction, as explained earlier.
Terms
A number of conditions apply to an employment reward:
- Remuneration should be businesslike and appropriate for the job
- The amount of 5,000 euros or more may be deducted
- Lower remuneration is not deductible
- The remuneration and other conditions determine which arrangement is possible; you cannot treat a payment of €5,000 or more as assisting spouse deduction at the same time
Wage employment
If you employ your partner, you treat him or her as a regular employee. You have to pay payroll taxes and keep payroll records. The wages you pay are fully deductible as salary expenses. Your partner pays tax on the wages he or she receives. In salaried employment, the co worker deduction is waived because the work is remunerated.
Income tax partner
With a realistic labour remuneration of at least €5,000 per year, you deduct the allowance and your fiscal partner declares the entire amount as income. This is not automatically wages from employment; wage rules apply in the event of an employment contract. A labour remuneration of under €5,000 is not tax-deductible for you and the partner does not have to declare it as income. Assisting spouse's deduction is then only possible if all conditions are met. There is no minimum of 525 partner hours for labour remuneration. Record activities, hours, remuneration and payment or written acknowledgement of debt. Compare the tax and benefit effects for the two of you together. Read the official explanation of a collaborating partner.
