The 30% Ruling in the Netherlands — Guide for Expats

The 30% ruling (officially the "expat scheme") is a Dutch tax benefit that lets your employer pay up to 30% of your gross salary completely tax-free. It exists to compensate highly skilled migrants for the extra costs of relocating abroad — housing, language courses, international travel. If you qualify, it's one of the most significant financial benefits available to expats in the Netherlands: on a €80,000 salary, it reduces your taxable income by €24,000.

What the ruling actually means in practice

The 30% is applied directly to your payslip. Instead of paying income tax on 100% of your salary, you pay tax on 70%. The remaining 30% is paid as a tax-free allowance. You do not receive a cheque or refund — it reduces your monthly tax deduction.

Example: on a gross salary of €70,000/year, 30% (€21,000) is treated as a tax-free expense allowance. You only pay income tax on the remaining €49,000. At the Dutch tax rates for 2026, this saves approximately €7,000–€9,000 per year depending on your bracket.

The 2024 rule changes — what you need to know

The Dutch government made significant changes to the ruling in 2023/2024:

• Duration cut from 10 to 5 years — all new recipients from 2024 onwards get a maximum of 5 years
• Percentage stays at 30% until 2027 — then drops to 27% from January 2027
• Transitional rule for 2023 recipients — employees approved in late 2023 can continue under the old terms until end of 2026
• Partial non-resident tax status eliminated — from January 2025, you can no longer choose to be taxed as a partial non-resident on Box 2 and Box 3 income (savings, investments, company shares)

If you started employment in the Netherlands after January 2024, you get the new 5-year maximum and 27% rate from 2027.

Eligibility criteria in full

To qualify, you must meet all four of these conditions:

1. Hired from abroad — you must be recruited from outside the Netherlands (not already living here)
2. Specific expertise — your knowledge or skills must be scarce in the Dutch labour market (in practice, most white-collar jobs in tech, finance, healthcare, and engineering qualify)
3. Minimum salary — in 2026, your taxable salary must exceed €48,013 (gross salary: €68,590). For employees under 30 with a master's degree, the threshold is €36,497 taxable (€52,139 gross). Scientific researchers and specialist doctors are exempt entirely. The threshold increases each year — check belastingdienst.nl for the current figure.
4. Distance rule — you must have lived more than 150km from the Dutch border for at least 16 of the 24 months before your first working day in the Netherlands. EU citizens who commuted from nearby Belgium or Germany typically do not qualify unless they lived further away.

How to apply — step by step

1. Talk to your employer — the application must be submitted jointly by you and your employer. Confirm they are aware of the ruling and willing to apply.
2. Gather your documents — you'll need your employment contract, proof of your previous address (outside the Netherlands, more than 150km from the border), and your passport.
3. Submit within 4 months — your employer sends the application to the Belastingdienst within 4 months of your start date. If submitted on time, the ruling is backdated to day one of employment.
4. Receive the ruling decision — the Belastingdienst issues a ruling (beschikking) within 8 weeks. Keep this document — it specifies how long the ruling applies and the amount.
5. Ruling applied to payslip — once approved, your employer applies the tax-free percentage to each payslip automatically.

What to look for on your payslip

Once approved, every payslip should show a line labelled "vrije vergoeding" (tax-free allowance) or "30% regeling". The amount should equal 30/70ths of your base salary (not 30% of your gross — the calculation is applied on top). If you do not see this line, contact your HR or payroll department with your ruling decision (beschikking).

Common mistakes

• Missing the 4-month deadline — if your employer submits late, you lose the retroactive benefit from your start date. Chase your HR team early.
• Forgetting to apply for the ruling when changing employers — the ruling follows the employee, not the employer. If you change jobs, your new employer must reapply. You do not restart the 5-year clock, but the new employer needs to submit a fresh application.
• Assuming you automatically qualify — eligibility is not guaranteed. If the Belastingdienst determines your skills are not scarce, or the distance rule is not met, the application will be rejected. Get confirmation before planning your finances around it.

Official source: belastingdienst.nl