The 30% ruling in the Netherlands has undergone significant changes that took effect progressively from 2024 onwards, with further adjustments confirmed for 2026 and beyond. In essence, the scheme, now formally referred to as the expat scheme, remains available to qualifying foreign employees, but the maximum tax-free benefit percentage is being reduced and new salary thresholds apply. The sections below address the most common questions employers and internationally mobile employees are asking about the current rules.
Who is still eligible for the 30% ruling after the 2026 changes?
The eligibility criteria for the expat scheme in 2026 remain broadly consistent with previous years, though the salary thresholds have been updated. To qualify, an employee must be in paid employment, must have been recruited from outside the Netherlands, and must possess specific expertise that is scarce on the Dutch labour market. The 150-kilometre distance rule also continues to apply.
In practical terms, the following conditions must all be met:
- The employee is in paid employment with a Dutch employer.
- The employee was recruited or transferred from outside the Netherlands.
- The employee lived more than 150 kilometres from the Dutch border for at least 16 of the 24 months prior to their first working day in the Netherlands (with limited exceptions for those who have previously used the scheme).
- The employee meets the applicable salary threshold for 2026 (see below).
Certain categories are exempt from the salary requirement entirely: employees conducting scientific research at a designated facility, and doctors in specialist training, may qualify regardless of their salary level. Employees younger than 30 who hold a Dutch academic master’s degree or an equivalent foreign qualification benefit from a lower salary threshold than the general requirement.
It is worth noting that the 150-kilometre rule does not apply to employees returning to the Netherlands if their previous work period began no more than five years ago and they held a valid expat scheme decision at that time. Specific conditions apply, and individual circumstances should always be assessed carefully.
How has the maximum benefit percentage changed in 2026?
As of 2026, the maximum tax-free reimbursement under the expat scheme remains 30% of salary for employees who began using the scheme before 1 January 2024. However, for employees who became eligible after 1 January 2024, the maximum reimbursement will be reduced to 27% as of 1 January 2027. In 2026, the 30% rate still applies to this group, but employers and employees should plan for the upcoming reduction.
This distinction is important for workforce planning purposes. Employees who started using the expat scheme before 1 January 2024 fall under the transitional rules and retain access to the 30% rate for the full five-year duration of their decision. Those who entered the scheme from 1 January 2024 onwards will see the rate drop to 27% when the next legislative change takes effect in 2027.
In addition to the percentage change, a cap on the maximum untaxed allowance applies. As of 2026, the maximum untaxed allowance is €78,600 per year. This figure is calculated on the basis of the so-called Balkenende norm (the Wet normering topinkomens), which sets the maximum remuneration over which the tax-free percentage may be applied. An employee earning €262,000 or more who uses the scheme for the full calendar year can receive the full €78,600 allowance. For those using the scheme for part of the year only, the allowance is calculated on a proportional basis.
What is the new salary threshold for the 30% ruling in 2026?
In 2026, the minimum salary threshold for the expat scheme is €48,013 per year, excluding the tax-free allowance itself. This applies to the general category of employees demonstrating specific expertise. For employees younger than 30 who hold a qualifying master’s degree, the threshold is €36,497 per year in 2026.
These thresholds are reviewed annually. For reference, the general threshold was €46,660 in 2025 and €46,107 in 2024, reflecting a consistent upward adjustment in line with wage developments. Employers should verify the applicable threshold at the time of each new application, as relying on a previous year’s figure may result in an incorrect assessment of eligibility.
It is important to understand that the salary used to assess eligibility is the gross annual salary excluding the tax-free allowance. The tax-free component under the expat scheme is not counted towards the minimum salary requirement. This distinction can affect borderline cases and should be considered when structuring employment packages for incoming international talent.
How long can employees use the 30% ruling under the 2026 rules?
The maximum duration of the expat scheme is five years. This five-year period is counted from the employee’s first working day in the Netherlands, and the end date is stated in the formal decision (beschikking) issued by the Dutch Tax Administration. The duration has not changed as a result of the 2026 updates.
However, the five-year period may be shortened if the employee has previously worked or resided in the Netherlands. The Tax Administration will deduct any prior periods of work or residence from the available duration, unless those periods ended more than 25 years before the start of the current employment, or the employee only worked in the Netherlands occasionally, defined as fewer than 20 days per year in total, during the past 25 years. Short stays for personal reasons, such as holidays or family visits not exceeding six weeks per year or a single consecutive period of three months, are generally not deducted.
Employees who change employers during the five-year period do not automatically lose their remaining entitlement, provided they meet the conditions with the new employer and, where applicable, start with the new employer within three months of leaving the previous one. A new application must be submitted within four months of the first working day with the new employer.
What should employers do to comply with the 2026 ruling requirements?
To apply the expat scheme on behalf of a foreign employee, an employer must obtain formal approval from the Dutch Tax Administration before applying the tax-free allowance to payroll. The following steps outline the process:
- Submit the application within four months of the employee’s first working day in the Netherlands. Applications submitted after this deadline will result in the scheme starting from the date of application rather than the first working day, meaning the employee loses part of the five-year entitlement.
- Gather the required supporting documents, including the employment contract, proof of the employee’s qualifications, and evidence of recruitment from outside the Netherlands. The application form specifies which documents must be included.
- Await the formal decision (beschikking) from the Tax Administration, which is typically issued within eight weeks. The expiry date of the scheme is stated in this decision.
- Apply the correct percentage to payroll based on the employee’s start date and the applicable rules, 30% for those who began before 1 January 2024, and 30% currently (reducing to 27% from 1 January 2027) for those who began after that date.
- Monitor changes in the employee’s situation, including changes of position, employer transfers, or changes in salary that may affect eligibility or the applicable rate.
Employers should also be aware that a change of position within the same company does not necessarily require a new application, but this depends on the specific circumstances. When in doubt, it is advisable to contact the Tax Administration or seek specialist advice before making assumptions about continued eligibility.
Can employees who already hold the 30% ruling be affected by the 2026 changes?
Whether an existing expat scheme decision is affected by the 2026 changes depends on when the employee first became eligible. Employees who started using the scheme before 1 January 2024 are protected by transitional rules and may continue to receive a 30% tax-free allowance for the full five-year duration of their decision, without being subject to the upcoming reduction to 27%.
For employees who entered the scheme from 1 January 2024 onwards, the reduction to 27% will apply from 1 January 2027. This means their ongoing five-year period will be affected midway through, even if their original decision was granted under the 30% rate. Employers and employees in this category should factor the reduced rate into their financial planning ahead of the 2027 transition.
A further change that has already taken effect concerns the partial foreign tax liability (partiële buitenlandse belastingplicht). Since 1 January 2025, employees using the expat scheme can no longer elect to be treated as partial foreign taxpayers for income tax purposes. This means they are now required to declare their worldwide income from substantial interest (Box 2) and from savings and investments (Box 3) in the Netherlands. This change affects all current expat scheme holders, regardless of when they first became eligible, and may have material consequences for employees with significant foreign capital income. Consulting a tax adviser is strongly recommended for anyone in this position.
How Russell Advocaten Can Support Expats and Employers
Navigating the expat scheme and the broader legal landscape of working and living in the Netherlands involves more than understanding tax rules. For international employees and the businesses that employ them, questions about employment contracts, housing, business setup, and immigration status often arise simultaneously, and the answers are rarely straightforward.
Russell Advocaten is an internationally oriented law firm based in Amsterdam, with decades of experience advising expats in the Netherlands on a wide range of legal matters, including:
- Employment law and the legal aspects of international relocation to the Netherlands
- Setting up a business in the Netherlands as a foreign national or company
- Real estate and rental matters, including the diplomat clause in rental agreements
- Immigration and residence permit questions (in a general advisory capacity)
- Contract review and negotiation for internationally mobile professionals
- Family law for expats navigating cross-border personal circumstances
Russell Advocaten is an official partner of IN Amsterdam, the expat centre of the City of Amsterdam, and is a member of the Primerus network of independent law firms across 40 countries. The firm’s lawyers advise clients in English, German, and Dutch, an important practical advantage for international clients who require legal advice in their working language. Russell Advocaten has been recommended by the Legal 500 for many years, reflecting its standing as a trusted legal partner for businesses and individuals with ties to the Netherlands.
The information in this article is general in nature and does not constitute legal or tax advice for your specific situation. For guidance tailored to your circumstances, contact Russell Advocaten directly.
This information is of a general nature and does not constitute legal advice for your specific situation; please consult a lawyer at Russell Advocaten for advice tailored to your circumstances.
Veelgestelde vragen
What happens if my employer submits the 30% ruling application late — can I recover the lost period?
Unfortunately, if the application is submitted after the four-month deadline, the scheme will only take effect from the date the application is received by the Dutch Tax Administration, not from your first working day. The portion of the five-year entitlement that falls before the application date is permanently lost and cannot be recovered. This makes timely submission one of the most critical steps in the process, so it is worth following up with your employer’s HR or payroll team well before the deadline expires.
If I switch jobs in the Netherlands, do I need to reapply for the expat scheme from scratch?
You do not lose your remaining entitlement simply by changing employers, but you must meet the eligibility conditions with your new employer and begin working there within three months of leaving your previous role. A new application must then be submitted within four months of your first working day with the new employer. The five-year clock does not reset — your new decision will reflect the remaining duration from your original start date, so it is important to track this carefully during any job transition.
How does the cap on the maximum untaxed allowance work in practice, and who is most affected by it?
The €78,600 annual cap means that even if 30% of your gross salary would mathematically exceed this amount, the tax-free reimbursement is limited to €78,600. In practice, this cap only affects employees earning approximately €262,000 or more per year, as that is the salary level at which 30% equals the maximum. For the vast majority of expat scheme users, the cap will not reduce their actual benefit, but high earners — particularly those in senior executive or specialist roles — should factor this ceiling into their net compensation calculations.
I have savings and investments abroad — how does the end of the partial foreign tax liability option affect me?
Since 1 January 2025, expat scheme holders can no longer opt for partial foreign taxpayer status, which previously allowed them to exclude foreign Box 2 (substantial interest) and Box 3 (savings and investments) income from Dutch taxation. All current scheme holders must now declare this worldwide income in the Netherlands, regardless of when they first became eligible. If you hold significant foreign assets, shares in a foreign company, or substantial savings outside the Netherlands, the tax impact can be material, and consulting a qualified tax adviser as soon as possible is strongly recommended.
Can I still qualify for the expat scheme if I previously lived in the Netherlands years ago?
Prior residence or work in the Netherlands does not automatically disqualify you, but it can reduce the available five-year duration of the scheme. The Tax Administration will deduct any previous periods of Dutch work or residence unless they ended more than 25 years before your current employment begins, or you only worked in the Netherlands occasionally (fewer than 20 days per year). Short personal visits such as holidays generally do not count against you. If you have any prior Dutch history, it is worth assessing your specific situation carefully before assuming you qualify for a full five-year period.
What is the most common mistake employers make when applying the expat scheme to payroll?
One of the most frequent errors is applying the tax-free allowance before the formal decision (beschikking) has been received from the Dutch Tax Administration. Employers must wait for official approval before processing the benefit through payroll — applying it prematurely can create compliance issues and require corrections. A second common mistake is using the wrong salary threshold figure from a previous year, since the minimum salary requirement is updated annually and an outdated figure may lead to an incorrect eligibility assessment.
Is it worth applying for the expat scheme if an employee is only coming to the Netherlands for a short assignment?
It can still be worthwhile, even for shorter assignments, as the scheme applies proportionally for any part of a calendar year in which the employee is active. However, the administrative effort of the application process and the four-month submission deadline mean that timing is critical for short-term placements. Employers should weigh the net financial benefit against the administrative burden and consider whether the employee’s assignment length and salary level make the scheme cost-effective. For assignments of less than a year, a careful cost-benefit analysis is advisable before proceeding.
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