What Is the 30% Ruling?
The 30% ruling (30%-regeling) is one of the Netherlands' most powerful tax incentives for attracting international talent. It allows qualifying employees recruited from abroad to receive up to 30% of their gross salary tax-free, as compensation for the extraterritorial costs of living and working in the Netherlands.
In practice, this means an employee earning €80,000 gross can receive an effective tax benefit that increases their net income by thousands of euros per year, while costing the employer nothing additional.
Eligibility Requirements (2026)
Both the employer and the employee must meet specific criteria:
- Employee Requirements:
- Recruited from abroad or transferred from a foreign entity of the same group
- Lived at least 150 km from the Dutch border for at least 16 of the 24 months before the start of Dutch employment
- Possesses specific expertise that is scarce or absent in the Dutch labor market
- Salary Threshold: The taxable salary (excluding the tax-free allowance) must be more than €48,013 per year (2026 figure). A reduced threshold of €36,497 applies to employees under 30 who hold a qualifying master's degree. Scientific researchers at designated institutions and doctors training as medical specialists have no salary threshold. The thresholds are indexed every year.
- Employer Requirements:
- Registered as an employer in the Netherlands
- The employee was recruited from abroad. This means the employment agreement must have been reached while the employee was still living abroad
Application Process
The 30% ruling is applied for jointly by employer and employee at the Belastingdienst:
- Timing: Apply within 4 months of the employee's start date to receive the ruling retroactively from day one.
- Documentation: Employment contract, proof of previous residence abroad, qualifications, and the completed application form.
- Processing: The Belastingdienst typically processes applications within 2–4 months.
- Duration: The ruling is granted for a maximum of 5 years (60 months), reduced from the previous 8 years in 2019.
2024–2026 Changes & Transitional Rules
Important changes have been phased in that affect the 30% ruling:
- No phased reduction, 27% from 2027: The phased reduction introduced in 2024 was scrapped before it took effect. The maximum tax-free allowance stays 30% in 2025 and 2026 and becomes 27% from 1 January 2027, when a higher salary threshold also applies.
- Transitional rules: Employees whose ruling was already applied in payroll by 31 December 2023 keep the 30% maximum (and the current salary norm) for the rest of their ruling term, also after 2026. Check your specific situation.
- Salary cap: Since 2024 the allowance only applies to salary up to the WNT norm (the "Balkenende norm"): €262,000 in 2026, which limits the tax-free allowance to €78,600. From 1 January 2026 the cap applies to all expats, including those whose ruling started before 2023. Amounts above this cap are fully taxed.
Practical Benefits Beyond Tax
The 30% ruling also provides several non-cash benefits:
- Partial non-resident tax status (ending): Abolished for new cases from 1 January 2025. Only employees who already used the 30% ruling before 2024 can still opt for it, up to and including their 2026 tax return, so that Dutch wealth tax does not apply to their non-Dutch assets until then.
- Driver's license exchange: Employees with the 30% ruling can exchange their foreign driver's license for a Dutch one without taking a driving test.
- Reduced payroll costs: Since the 30% is tax-free, the employer can effectively reduce gross salary while maintaining the employee's net income, or use the same gross to offer a significantly higher net.
