As of 1 January 2024, the 30% facility, the tax exemption for expatriates, will be reduced, both in terms of duration and amount. What does the new regulation look like? What does the change mean for expats already in the Netherlands?
Expatriates who come to work in the Netherlands incur additional costs to do so. For example for relocation, but also during their stay, for example for visiting family in the country of origin. To make working in the Netherlands attractive, employers can provide expats with untaxed compensation for these costs. Employers must, however, specify these costs in their request to the Tax Administration for exemption from paying payroll tax.
Instead, employers can also choose to opt for the 30% facility instead of the expenses actually incurred. In that case no payroll taxes need to be paid on 30% of the expatriate salary. Employers wishing to make use of this arrangement must apply for it the Tax Administration. Only when the Tax Administration has approved the application by a decision, the 30% facility may actually be applied.
As of 1 January 2024 this regulation will be scaled down.
Firstly, the exemption is capped at 30% of the so-called Balkenende norm, the maximum salary that employees in the public and semi-public sector can earn. This norm was named after the prime minister at the time it was introduced. In 2024, the Balkenende norm equals an annual salary of € 233,000. The 30% exemption for 2024, will thus be a maximum of € 69,900. For expats who were already covered by the 30% ruling in 2022, this maximum only applies from 1 January 2026.
In addition, 30% of wages may now be disregarded for payroll tax during the first 20 months of residence only. This percentage is then reduced, until after 60 months tax must be paid on the entire wages. You can see the percentages in the table below:
| Length of contract | Exemption |
| 0-20 months | 30% |
| 21-40 months | 20% |
| 41-60 months | 10% |
| 61 months and longer | 0% |
The periods and exemption percentages are maximums. The Tax Administration can also issue an exemption decision for shorter periods. The phasing out of the 30% ruling only applies to expats who start working in the Netherlands after 31 December 2023. Expats working or starting to work in the Netherlands before 1 January 2024, are still subject to the old rules. The phasing out is still to be approved by the Dutch Senate.
Do you have any questions about the rules applicable to expats in the Netherlands? Would you like to know the rules for expat employees? Would you, as an entrepreneur like to employ expatriates? We will be happy to help you. We can also assist you in disputes between expats and Dutch employers. Please contact us:
Employees who are underperforming may be dismissed. However, they must first be given the opportunity to improve their performance through a performance improvement plan (PIP). What requirements must such a plan meet?
The works council has the right of consent when establishing, amending or withdrawing a remuneration system. Is an amendment to a share scheme an amendment to the remuneration system?
The salary thresholds for highly skilled migrants and European Blue Card holders are adjusted annually. What will be the amounts for 2026? Also, stricter rules for the highly skilled migrant scheme are proposed. What might change?
On-call contracts offer many advantages for both employers and on-call employees. However, there are also a few rules that they need to take into account. What are they?
What shall we do with the drunken employee? Sack him? That isn’t always allowed. Alcohol abuse may be the result of an addiction and in that case the prohibition on termination during illness may apply. What do you have to take into account when dismissing an employee due to alcohol consumption?
24 November 2025 was Equal Pay Day in the Netherlands: the day of the year when men have earned on average as much as women in a whole year. How can the European Directive on wage transparency ensure that men and women are paid equally?
