The 30% ruling in the Netherlands: the position in 2026 and what changes in 2027

The 30% ruling (30%-regeling, officially the expatregeling since 2024) lets a Dutch employer pay part of an incoming employee’s salary free of wage tax. It has been changed repeatedly in three years, and some of those changes were themselves reversed. This article sets out what applies in 2026, what applies from 1 January 2027, and which transitional regime an employee falls under. Every figure is given with the year it belongs to.

What the facility is, and why it exists

An employee who moves to the Netherlands for work incurs costs a local colleague does not: double housing, a higher cost of living, flights home, storage of household effects, residence documents and driving licence conversion, language courses for the family. Dutch wage tax law calls these extraterritoriale kosten and treats a reimbursement of them as a targeted exemption (gerichte vrijstelling) within the work-related costs scheme, under art. 31a Wet LB 1964. Reimbursed correctly they are not taxed as salary and do not use up the employer’s free margin.

Proving those costs employee by employee is administratively heavy. The 30% ruling is a flat-rate alternative: the employer may treat a fixed percentage of remuneration as a tax-free reimbursement of extraterritorial costs, without evidence that the costs were incurred. It is a convenience, not a subsidy in principle — which is why reimbursing actual costs remains available and, for some employees, is worth more. Moving costs for household effects and international school fees sit outside the flat rate and may be reimbursed tax-free in addition.

The position per year

The table gives the flat rate, the salary norm, the reduced norm for young masters graduates and the cap, per year. The norms are annual amounts of taxable salary, indexed each January.

The euro amounts the 2027 salary norms and the 2027 WNT cap take after indexation are published in December of the preceding year, in the Staatscourant and the Tax Plan documentation, and should be checked before the first 2027 payroll run.

The taper that was introduced and then withdrawn

The 2024 Tax Plan introduced, by parliamentary amendment, a taper for employees entering the facility from 1 January 2024: 30% for the first 20 months, 20% for the next 20 and 10% for the final 20. It was repealed with effect from 1 January 2025, and under the transitional law no cohort reached the 20% band during 2024, not even employees with a shortened term: the earliest 20-month period could not expire before autumn 2025. Any page still describing a 30/20/10 taper is out of date.

Which regime an employee falls under

• Facility applied in the last pay period of 2023 or earlier. 30% for the whole remaining term, including after 2027, and the old (indexed) salary norm. The cap does apply, from 1 January 2026 at the latest.
• Facility first applied during 2024. 30% in 2025 and 2026, 27% from 1 January 2027; the old (indexed) salary norm still applies.
• Facility first applied on or after 1 January 2025. 30% in 2025 and 2026, 27% from 1 January 2027, and the new, higher salary norm from 2027.

The conditions

Recruited from abroad

The facility is for an ingekomen werknemer: an employee recruited from outside the Netherlands, or seconded from abroad to a Dutch withholding agent, as defined in art. 10e Uitvoeringsbesluit loonbelasting 1965. Recruitment must precede the move. Someone who moves here first and looks for work afterwards is not recruited from abroad and does not qualify, however specialised the work turns out to be. Employer and employee must also agree in writing that the allowance reimburses extraterritorial costs.

The 150-kilometre criterion

The employee must have lived more than 150 kilometres in a straight line from the Dutch border for more than two-thirds of the 24 months before the Dutch employment began — in practice at least 16 of those 24 months. That excludes most residents of Belgium, Luxembourg and large parts of western Germany.

The criterion was challenged as contrary to free movement of workers. The Hoge Raad did not settle the point itself but referred preliminary questions to the Court of Justice of the European Union (Hoge Raad 9 August 2013, ECLI:NL:HR:2013:474). The Court of Justice held in Sopora (Court of Justice of the European Union 24 February 2015, Case C-512/13, ECLI:EU:C:2015:108) that a flat-rate rule of this kind is permissible provided it does not systematically produce clear overcompensation of actual costs. Applying that test on the return of the case, the Hoge Raad held the Dutch rule valid (Hoge Raad 4 March 2016, ECLI:NL:HR:2016:360).

There is a limited exception for employees who obtained a doctorate in the Netherlands: the period of the doctoral research here is disregarded, provided the employee met the 150-kilometre and 16-of-24-months tests immediately before starting it and takes up the qualifying employment within a year of the degree.

Specific expertise scarce on the Dutch labour market: the salary norm

The statutory test is that the employee has specific expertise scarce or absent on the Dutch labour market. In practice this is measured by salary. Under art. 10eb Uitvoeringsbesluit loonbelasting 1965 an employee is deemed to have specific expertise if the annual taxable salary — the salary after deduction of the tax-free allowance — exceeds the norm for the year: €48,013 in 2026, €46,660 in 2025, €46,107 in 2024.

Two points are commonly misunderstood. The norm is a floor on the taxable salary, not on the package: if the package is €62,000 and 30% is taken tax-free, the taxable remainder is €43,400 and the 2026 norm is not met. And the norm applies throughout the term, on a time-apportioned basis, and rises every January; an employee comfortably above it on appointment can fall below after a move to part-time hours, unpaid leave or illness at reduced pay. Once the employee durably ceases to meet the salary or scarcity criterion, the facility lapses with retroactive effect to the first day of the month in which that happened, and, depending on the circumstances, for the whole tax year.

Where practically everyone in a segment of the labour market meets the norm, the Tax Administration may still test scarcity separately, looking at education, relevant experience and pay levels in the country of origin.

The reduced norm for young masters graduates

An employee under 30 holding a Dutch master’s degree, or a foreign degree recognised as equivalent, is subject to a reduced norm: €36,497 in 2026, €35,468 in 2025, €35,048 in 2024. The reduction is tied to age, not the year of graduation: in the month the employee turns 30 the general norm takes over. Employers hiring graduates on the reduced norm should diarise the thirtieth birthday.

Scientific researchers and academic teaching staff at designated Dutch research institutions, and doctors in specialist training at a recognised institution, qualify without meeting any salary norm; the other conditions still apply to them.

Applying, and the four-month deadline

The facility is not automatic. Employer and employee apply jointly to the Tax Administration, which issues a decision (beschikking) stating the start and end dates. Only then may the allowance be paid tax-free, and the employer must keep the decision in the payroll records.

The timing rule is the most expensive detail in this area. If the application is submitted within four months of the first day of the employment, the facility takes effect retroactively from that first day. If it is submitted later, it takes effect only from the first day of the month following the month of application, and the intervening months are lost permanently. There is no hardship exception; for a senior hire, four months of forgone exemption is easily a five-figure sum.

A refusal can be objected to and appealed, but the more useful step is to check eligibility before the contract is signed.

Duration: 60 months, and the reduction for earlier stays

The maximum term is 60 months. It was eight years before 2019; that was cut to five years with effect from 1 January 2019, subject to transitional relief which itself expired at the end of 2020. All current cases run on the 60-month term.

The term is reduced by earlier periods of work or residence in the Netherlands ending within the 25 years before the employment starts. Short visits are disregarded within limits: broadly, up to 20 working days a calendar year of Dutch work and up to six weeks a calendar year of Dutch residence for personal reasons, plus a one-off consecutive period of three months, which the Tax Administration’s knowledge group has confirmed applies alongside rather than instead of the annual six-week exception. Anyone who has previously lived or studied here should have the reduction calculated before relying on a five-year benefit.

The cap at the WNT norm

Since 1 January 2024 the flat rate applies only to remuneration up to the general remuneration maximum under the Wet normering topinkomens, often called the Balkenendenorm: €233,000 for 2024, €246,000 for 2025 and €262,000 for 2026. In 2026 the maximum tax-free allowance is therefore 30% of €262,000, and salary above the ceiling attracts no exemption.

Employees who already had the facility applied in the last pay period of 2022 had transitional relief from the cap until 1 January 2026. That relief has run out: from 2026 the cap applies to everyone, without exception. This is the change most likely to catch out long-standing, highly paid expatriates and their payroll departments this year.

The cap is applied per withholding agent and recalculated in proportion to time where the facility does not run for a whole year, so on a mid-year move each employer applies its own time-apportioned share.

Changing employer

The decision is granted to a specific employer and employee together and does not travel with the employee. On a change of employer the facility can be continued for the remainder of the original term, but only if the gap between the end of the previous employment and the conclusion of the new contract is no more than three months, and the new employer and employee submit a fresh joint application within four months of the new start date. The conditions, including the salary norm for the year, are tested again.

The three-month gap is measured strictly. In one appeal a continuation was refused where the previous employment had ended some eighteen months before the new contract was concluded; withdrawal of the employee’s residence permit in the meantime made no difference to the tax test (Gerechtshof ‘s-Hertogenbosch 27 June 2024, ECLI:NL:GHSHE:2024:3073). Resigning without a signed new contract puts the remaining term at risk.

The 30% ruling and the highly skilled migrant criterion are different tests

Non-EU nationals usually hold a residence permit as a highly skilled migrant (kennismigrant), sponsored by an employer recognised by the IND. That regime has its own salary criterion, set monthly and excluding the 8% holiday allowance: for 2026, €5,942 gross a month for employees aged 30 and over, €4,357 for those under 30, and a reduced €3,122 for those moving on from the orientation year for graduates. The EU Blue Card has its own figures again.

• The IND criterion is a gross monthly figure; the tax norm is an annual figure of taxable salary after the tax-free allowance is deducted.
• Meeting one does not guarantee the other. An employee on the reduced orientation-year criterion is nowhere near the 2026 tax norm of €48,013.
• Applying the 30% ruling must not push the salary below the IND criterion, so any exchange of salary for a tax-free allowance must be checked against both. EU and EEA nationals need no permit but face the same tax conditions.

The end of partial foreign taxpayer status

An employee with the 30% ruling used to be able to elect, in the income tax return, to be treated as a partial non-resident taxpayer under art. 2.6 Wet IB 2001. Box 2 and box 3 were then computed as if the employee were a non-resident, so foreign savings, investments and second homes fell outside Dutch tax — often worth more than the wage tax exemption itself.

The election was abolished with effect from 1 January 2025. Transitional relief was given to employees for whom the ruling was applied in the last pay period of 2023: they may elect partial non-resident status up to and including the 2026 tax year. That relief ends on 31 December 2026. From 1 January 2027 every employee with the facility is a full Dutch resident taxpayer, with worldwide box 2 and box 3 income in scope, subject to any applicable double tax treaty.

For the affected group this is a 2026 planning point, not a 2027 one: anyone relying on the transitional rule should have the 2027 position reviewed this year, including treaty treatment of foreign property and shareholdings and the box 3 consequences of assets held on 1 January 2027.

The alternative: reimbursing actual extraterritorial costs

The flat rate is not the only route. An employer may instead reimburse actual extraterritorial costs tax-free, on evidence, with no percentage limit, no salary norm and no 150-kilometre criterion. It is open to employees who fail the conditions for the flat rate entirely, including cross-border recruits inside the 150-kilometre zone, and is worth more where real costs are high: expensive double housing, frequent long-haul travel home, a large family relocation.

Since 2023 the choice must be made per employee in the first pay period of the calendar year in which extraterritorial costs are reimbursed, and is then fixed for that year; it cannot be corrected afterwards. In an employee’s first year the employer may switch between the two methods per pay period until the end of the fourth month, and must then commit for the rest of the year. Where the flat rate starts late, actual costs may be reimbursed for the earlier months.

This route requires a defensible record: receipts, a policy setting out which categories count, and a per-employee reckoning in the payroll administration. From 2027, at 27%, the comparison shifts and should be re-run for senior and heavily relocated staff.

What an employer should do in practice

• Test eligibility before the contract is signed: recruitment from abroad, the 150-kilometre and 16-of-24-months history, and earlier Dutch stays that shorten the term.
• Set the remuneration so the taxable salary after the allowance exceeds the norm for the year, and record in the contract or an addendum that the allowance reimburses extraterritorial costs.
• Apply jointly within four months of the first working day. Diarise the deadline when the contract is signed, not at onboarding.
• Make the annual choice between the flat rate and actual costs in the first pay period of each calendar year, and record it.
• Re-test every employee against the new norms each January and against the cap; diarise the thirtieth birthday of anyone on the reduced masters norm and the end date of every decision.
• Tell employees in writing what the allowance does not do: it is generally not pensionable and lowers the basis for social security benefits and mortgage capacity.
• On a change of employer, settle the three-month gap and the fresh application before the previous employment ends.