30% ruling in the Netherlands: conditions, amounts and the switch to 27%

The 30% ruling (30%-regeling, now also called the expat scheme or expatregeling) allows a Dutch employer to pay up to 30% of an incoming employee’s salary as a tax-free allowance for five years. Throughout 2026 the maximum is still 30%; from 1 January 2027 it drops to 27% for employees who first used the ruling in 2024 or later, while employees who had it applied in 2023 or earlier keep 30% until their term ends.

The ruling is not automatic. It requires recruitment from abroad, a salary above a statutory norm, residence more than 150 kilometres from the Dutch border, and a joint application by employer and employee to the Tax Administration (Belastingdienst).

What is the 30% ruling?

It is a flat-rate tax-free reimbursement of the extra costs of working outside your home country (extraterritoriale kosten). The legal basis is Article 31a(8) of the Wage Tax Act 1964 (Wet op de loonbelasting 1964), worked out in Articles 10e and following of the Wage Tax Implementing Decree 1965 (Uitvoeringsbesluit loonbelasting 1965).

Employees who move to the Netherlands for work face costs a local colleague does not, such as double housing, trips home and a higher cost of living. Instead of proving those costs one by one, the employer may treat a fixed percentage of the salary as a tax-free reimbursement, without evidence of actual costs. International school fees can be reimbursed tax-free on top of the flat rate.

What are the rates and amounts in 2026 and 2027?

In 2026 the maximum is 30% and the allowance is capped at 30% of €262,000. In 2027 the maximum becomes 27% for most employees and the cap rises with the new remuneration maximum of €273,000.

The 2026 salary norms are laid down in Article 10eb of the Wage Tax Implementing Decree. The cap follows the general remuneration maximum of Article 2.3 of the Senior Officials Pay Standards Act (Wet normering topinkomens, WNT), which the government set at €273,000 for 2027 in a regulation of 21 August 2026.

The 30/20/10 taper no longer applies

The 2024 Tax Plan introduced a taper of 30%, 20% and 10% for successive 20-month periods. The 2025 Tax Plan (Belastingplan 2025), adopted by the Senate on 17 December 2024, largely reversed it with effect from 1 January 2025 and replaced it with a constant 27% from 1 January 2027. Information still describing a 30/20/10 taper is out of date.

Who qualifies for the 30% ruling?

You qualify as an incoming employee (ingekomen werknemer) if you meet three conditions in Article 10e of the Wage Tax Implementing Decree: you were recruited from abroad, you have specific expertise that is scarce in the Netherlands, and you lived more than 150 kilometres from the Dutch border.

Recruited from abroad

The employer must have recruited you from another country, or you must have been seconded to a Dutch employer from abroad. Recruitment must come before the move: someone who moves here first and finds a job afterwards does not qualify. Employer and employee must also agree in writing that the allowance is a reimbursement of extraterritorial costs.

The 150-kilometre criterion

For more than two-thirds of the 24 months before you started working in the Netherlands, you must have lived more than 150 kilometres from the Dutch border. In practice that means at least 16 of those 24 months. This excludes most residents of Belgium, Luxembourg and large parts of western Germany.

The criterion has been tested against EU free movement of workers. The Supreme Court referred questions to the Court of Justice of the EU (Hoge Raad 9 August 2013, ECLI:NL:HR:2013:474). After the Court of Justice ruled in Sopora (Case C-512/13, 24 February 2015) that such a flat-rate rule is allowed as long as it does not systematically lead to clear overcompensation, the Supreme Court upheld the Dutch rule (Hoge Raad 4 March 2016, ECLI:NL:HR:2016:360).

Specific expertise: the salary norm

You are deemed to have specific expertise if your annual taxable salary exceeds €48,013 in 2026 (Article 10eb(1) of the Implementing Decree). For employees under 30 with a Dutch master’s degree or an equivalent foreign degree, the norm is €36,497 (Article 10eb(2)).

The norm applies to the taxable salary after deducting the tax-free allowance, not to the total package. An example to illustrate: on a package of €62,000 with a 30% allowance, the taxable salary is €43,400, which is below the 2026 norm. The reduced norm ends in the month you turn 30, and the norms are indexed every January, so part-time work, unpaid leave or a pay cut can push you below the norm during the term.

Scientific researchers at designated research institutions and doctors in specialist training do not need to meet a salary norm (Article 10eb(3)). Where almost everyone in a sector meets the norm, the Tax Administration can still test scarcity separately, looking at education, experience and pay in the country of origin (Article 10eb(4)).

How and when do you apply?

Employer and employee apply jointly to the Tax Administration, which decides by a formal decision (beschikking) that can be challenged by objection. Apply within four months of the first working day: only then does the decision apply retroactively from the start of employment (Article 10ei(2) of the Implementing Decree).

If you apply later, the ruling only applies from the first day of the month after the month of application. Under Article 10eg the five-year term is also reduced by the months in between, so those months are lost for good. There is no hardship exception, so diarise the deadline when the contract is signed.

How long does the ruling last?

The maximum term is five years (60 months) under Article 10ec of the Implementing Decree. It starts on the first day of employment and ends at the latest in the pay period after the employment ends.

Under Article 10ef the term is reduced by earlier periods of work or residence in the Netherlands that ended within the 25 years before the employment. Short stays do not count: up to 20 working days per calendar year, up to six weeks of personal stays per calendar year, and once in those 25 years a continuous personal stay of up to three months. If you previously studied or worked here, have the remaining term calculated before relying on five years.

What happens if you change employer?

The ruling can continue for the rest of the original term with a new employer, if no more than three months pass between the end of the old employment and the conclusion of the new employment contract (Article 10ed). The new employer and the employee must apply jointly again, and the new employer must show again that you qualify.

The three-month period is applied strictly. The Court of Appeal of ‘s-Hertogenbosch refused continuation where the gap was more than 18 months, and held that the withdrawal of the employee’s residence permit in the meantime made no difference (Gerechtshof ‘s-Hertogenbosch 2 October 2024, ECLI:NL:GHSHE:2024:3073). Resigning before you have signed a new contract puts the remaining term at risk.

How does the ruling relate to the highly skilled migrant scheme?

Non-EU employees usually need a residence permit as a highly skilled migrant (kennismigrant), sponsored by an employer recognised by the IND. That permit has its own salary criterion, set by the IND each year as a gross monthly amount excluding holiday allowance and published on ind.nl.

The two norms are different: the IND criterion is a gross monthly salary, the tax norm an annual taxable salary after deducting the allowance. Meeting one does not guarantee meeting the other. Converting salary into a tax-free allowance must therefore be checked against both, because the IND can withdraw the residence permit if the salary drops below its criterion.

What changes for foreign savings and investments?

The option to be treated as a partial non-resident taxpayer (partiële buitenlandse belastingplicht) was abolished on 1 January 2025, when Article 2.6 of the Income Tax Act 2001 was repealed. Employees for whom the ruling was applied in the last pay period of 2023 may still use that option up to and including the 2026 tax year.

From 1 January 2027 every employee with the ruling is taxed as a full Dutch resident, including on worldwide savings and investments in box 3 and substantial shareholdings in box 2, subject to tax treaties. If you are in the transitional group, have your 2027 position reviewed by a tax adviser during 2026.

Is reimbursing actual costs an alternative?

Yes. Instead of the flat rate, the employer can reimburse the actual extraterritorial costs tax-free on proof, without a percentage limit, salary norm or 150-kilometre criterion. This can be worth more where costs are high, and it is open to employees who do not qualify for the flat rate.

Under Article 31a(17) of the Wage Tax Act the employer must choose per employee, in the first pay period of each calendar year, between the flat rate and actual costs. This route requires a written cost policy, receipts and a per-employee administration. From 2027, at 27%, the comparison is worth redoing for employees with high relocation costs.

What should you check as an employer?

As an employer, most mistakes happen before the first payslip. Check these points:

• Was the employee recruited from abroad, and did they live more than 150 kilometres from the Dutch border for at least 16 of the last 24 months?
• Does the taxable salary after the allowance exceed €48,013 (2026), or €36,497 for a master’s graduate under 30?
• Have you and the employee agreed in writing that the allowance reimburses extraterritorial costs?
• Is the joint application filed within four months of the first working day?
• Does the salary still meet the IND criterion for a highly skilled migrant after the allowance?
• Have you diarised the switch to 27% on 1 January 2027 and the new cap of €273,000?

What should you check as an employee?

As an employee, the ruling affects your net pay, your pension and your residence permit. Check these points:

• Does your contract state the allowance and its effect on your gross salary?
• Have earlier stays or studies in the Netherlands in the past 25 years shortened your term?
• Do you know your end date and whether you keep 30% or move to 27% in 2027?
• Before resigning, is a new contract signed within three months of your last working day?
• Have you asked how the allowance affects your pension accrual, benefits and mortgage capacity?

What can we do for you with the 30% ruling?

We advise employers and incoming employees on the employment and immigration side of an international appointment; for payroll processing and your tax return, we work alongside your tax adviser.

• We review the employment contract and the allowance clause before signing.
• We check whether the salary meets both the IND criterion and the tax salary norm.
• We advise on the timing of a change of employer so that the three-month period is met.
• We handle the highly skilled migrant application and the employer’s recognised sponsor status with the IND.
• We draft the objection (bezwaar) against a refusal of the 30% ruling within the six-week deadline.

Summary

• The 30% ruling gives a tax-free allowance of up to 30% of salary for a maximum of five years; from 1 January 2027 the maximum is 27% for employees who started using it in 2024 or later.
• In 2026 the taxable salary must exceed €48,013, or €36,497 for master’s graduates under 30, and the allowance is capped at 30% of €262,000.
• Apply jointly within four months of the first working day; later applications lose months permanently.
• On a change of employer the gap may not exceed three months.
• Partial non-resident taxpayer status ends after 2026 for the last transitional group.

Frequently asked questions