What is the 30% ruling in the Netherlands?

Russell Advocaten · 01 sep 2026

The 30% ruling in the Netherlands, now formally known as the expat scheme, is a tax facility that allows employers to pay qualifying international employees up to 30% of their salary tax-free, as compensation for the extra costs of relocating to the Netherlands. It applies to employees recruited from abroad who bring specific expertise that is scarce on the Dutch labour market. The sections below address the most common questions about how the scheme works, who qualifies, and what has recently changed.

Who qualifies for the 30% ruling in the Netherlands?

To qualify for the 30% ruling in the Netherlands, an employee must be recruited from abroad, hold a position that requires specific expertise, earn above the applicable salary threshold, and have 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.

In practice, the qualifying conditions are as follows:

The employee is in paid employment with a Dutch employer.
The employee was recruited outside the Netherlands (including from Aruba, the BES islands, Curaçao, or Sint Maarten).
The employee’s specific expertise is scarce on the Dutch labour market, demonstrated by meeting the applicable salary threshold (see below).
The employee lived more than 150 kilometres from the Dutch border for more than 16 months in the 24 months before their first working day; this excludes residents of Belgium, Luxembourg, and parts of Germany, France, and the United Kingdom.

There are limited exceptions. Employees conducting scientific research at a designated research facility, or doctors training to become specialists, may qualify regardless of their salary level. Employees younger than 30 who hold a Dutch academic master’s degree, or an equivalent qualification obtained abroad, benefit from a lower salary threshold. Additionally, PhD researchers who lived more than 150 kilometres from the Dutch border for at least 16 of the 24 months prior to starting their doctoral research in the Netherlands may also qualify.

It is worth noting that the 150-kilometre distance requirement may be waived in certain circumstances, for example, if the employee previously qualified for the expat scheme and later moved abroad, provided the previous work period started no more than five years ago and all other conditions are met.

How does the 30% ruling actually reduce tax in the Netherlands?

The 30% ruling reduces tax in the Netherlands by allowing the employer to pay a portion of the employee’s salary as a tax-free allowance, rather than as fully taxable income. This means the employee pays income tax on a lower base, resulting in a meaningfully higher net income without any additional cost to the employer beyond the agreed gross salary.

There are two methods an employer may use under the expat scheme:

Fixed percentage method: The employer pays up to 30% of the employee’s salary (including compensation) tax-free. This is the most commonly used approach, as it avoids the administrative burden of tracking individual costs.
Actual cost reimbursement: Instead of applying the fixed percentage, the employer reimburses the employee’s actual extraterritorial costs, such as moving expenses, language courses, or higher living costs, on a tax-free basis. This requires proper documentation of each expense.

Extraterritorial costs are the genuine additional expenses an employee incurs as a result of working outside their home country. These can include the cost of temporary accommodation, travel between the Netherlands and the home country, and the difference in cost of living. The fixed percentage method is designed as a practical proxy for these costs, removing the need for itemised proof.

It is important to understand that the employer is not obliged to pay the full 30%. The actual tax-free allowance may be lower, depending on what is agreed between employer and employee. The arrangement and its terms should therefore be agreed in writing before the application is submitted.

What are the current salary thresholds for the 30% ruling?

In 2026, the general salary threshold for the 30% ruling is €48,013 per year, excluding the tax-free allowance itself. For employees younger than 30 who hold a qualifying master’s degree, the threshold is €36,497. These figures are adjusted annually.

For reference, the thresholds in recent years have been:

General threshold: €46,660 (2025), €46,107 (2024)
Under-30 with master’s degree: €35,468 (2025), €35,048 (2024)

There is also a cap on the maximum tax-free allowance. As of 2026, the maximum untaxed allowance is €78,600 per year. This maximum applies to employees earning a salary of €262,000 or more who use the expat scheme for the full calendar year. Employees who use the scheme for only part of the year receive a proportionally reduced maximum allowance.

The cap is linked to the so-called Balkenende norm, the maximum remuneration standard set out in the Dutch Act on the Normalisation of Senior Officials’ Salaries (Wet Normering Topinkomens). This ceiling is reviewed annually, and employers should verify the current figure each year.

How long does the 30% ruling last?

The 30% ruling in the Netherlands has a maximum duration of five years. The end date is stated in the official approval decision (beschikking) issued by the Dutch Tax Administration. The five-year period may be reduced if the employee has previously worked or lived in the Netherlands.

Specifically, any prior periods of work or residence in the Netherlands within the past 25 years are deducted from the available five-year term. There are exceptions to this reduction:

Previous work or residence that ended more than 25 years before the start of the current employment is not deducted.
Occasional work in the Netherlands, fewer than 20 days per year in total, during the past 25 years is not deducted.
Short personal stays (holidays, family visits) not exceeding six weeks per year, or a single consecutive period of three months, are not deducted.

If an employee changes employers during the five-year period, the scheme does not automatically transfer. However, if the new employer belongs to the same connected group of withholding agents, the existing approval decision remains valid without a new application. If the new employer is outside that group, a new application must be submitted within four months of the employee’s first working day at the new employer, and this must be done within three months of leaving the previous position for the decision to remain valid from the first day of the new role.

What recent changes affect the 30% ruling?

The most significant recent change to the 30% ruling is a planned reduction of the tax-free percentage from 30% to 27%, which will take effect from 1 January 2027 for employees who became eligible after 1 January 2024. Employees who started using the scheme before that date continue to benefit from the original 30% rate for the remainder of their five-year period.

A further change came into force on 1 January 2025: employees using the expat scheme can no longer apply for partial foreign tax liability (partiële buitenlandse belastingplicht) in their Dutch income tax return. Previously, qualifying employees were treated as foreign taxpayers for Box 2 (substantial interest income) and Box 3 (savings and investments), meaning they were not taxed in the Netherlands on foreign capital income in those categories. Since 2025, this exemption no longer applies, and employees must declare their Box 2 and Box 3 income in the Netherlands.

It is also worth noting that the scheme has undergone several revisions since 2012, including a reduction of the maximum duration from ten years to five. Further adjustments to salary thresholds and the remuneration cap are expected in coming years. Given the pace of legislative change, employers and employees are strongly advised to monitor updates and seek specialist advice to understand how any new measures may affect an ongoing arrangement.

How does an employer apply for the 30% ruling?

To apply for the 30% ruling, the employer must submit a request for approval to the Dutch Tax Administration (Belastingdienst) within four months of the employee’s first working day in the Netherlands. The application must be submitted jointly by the employer and the employee, and the Tax Administration will issue a decision within eight weeks.

The application process involves the following steps:

Confirm eligibility: Verify that the employee meets all conditions, including the salary threshold, distance requirement, and recruitment from abroad.
Prepare supporting documents: Gather the required documentation, which typically includes the employment contract, proof of the employee’s qualifications, and evidence of prior residence outside the Netherlands.
Submit the application: Complete and submit the official application form, available on the Tax Administration’s website, within four months of the employee’s first working day.
Receive the decision: The Tax Administration will issue a formal approval decision (beschikking) stating the applicable period. The expat scheme may only be applied from the date of the first working day if the application is submitted within the four-month window.

If the application is submitted after the four-month deadline, the scheme can only be applied from the first day of the month in which the application was received, meaning a late submission results in a loss of benefit for the earlier period. Timeliness is therefore essential.

When an employee changes employers, the existing decision does not transfer automatically. A new application must generally be submitted, unless the new employer belongs to the same connected group of withholding agents as the previous one. If the employee moves to an employer outside that group, the new application must be submitted within four months of the first working day at the new employer, and the transition must occur within three months of leaving the previous role.

How Russell Advocaten can assist with the expat scheme

Navigating the 30% ruling, and the broader legal landscape of working and living in the Netherlands, involves more than a single tax application. Russell Advocaten Amsterdam is an internationally oriented law firm with decades of experience advising expats, international businesses, and foreign governments on the legal aspects of operating in the Netherlands. The firm’s lawyers communicate fluently in English, German, and Dutch, which makes a practical difference when dealing with Dutch authorities and documentation.

For expats and their employers, Russell Advocaten offers support across a wide range of related matters, including:

Advice on employment contracts and the legal framework surrounding expat arrangements
Guidance on setting up a business or branch in the Netherlands
Assistance with personnel matters, including reorganisations and termination
Support on real estate and lease agreements for individuals and companies
Advice on immigration-related legal questions in the context of working in the Netherlands

Russell Advocaten is an official partner of IN Amsterdam, the expat centre of the City of Amsterdam, and has been recommended by the Legal 500 for many years. The firm is also part of the Primerus network, connecting clients to legal expertise in more than 40 countries when cross-border questions arise.

If you have questions about the expat scheme or any other legal matter related to working or doing business in the Netherlands, the team at Russell Advocaten is available to assist. Visit the expats practice page for more information, or contact Russell Advocaten directly to discuss your specific situation.

This information is general in 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

Can I still apply for the 30% ruling if I missed the four-month deadline?

Yes, you can still apply after the four-month window has passed, but you will lose some of the benefit. If the application is submitted late, the tax-free allowance can only be applied from the first day of the month in which the Tax Administration receives your application — not from your actual start date. This means you may forfeit several months of tax savings, so it is strongly advisable to submit as early as possible, ideally before or on your first working day.

What happens to my 30% ruling if I switch jobs in the Netherlands?

Your existing approval decision does not automatically transfer to a new employer. If your new employer belongs to the same connected group of withholding agents as your previous one, the existing decision remains valid without a new application. If you move to an employer outside that group, you must submit a new application within four months of your first working day at the new employer, and the job change must occur within three months of leaving your previous role for the scheme to be backdated to your new start date. Missing either of these deadlines results in a gap in coverage or a later effective start date.

Does the 30% ruling affect my pension contributions or other employment benefits?

The 30% ruling reduces your taxable salary, which can have downstream effects on income-related calculations. For example, because pension contributions are often based on pensionable salary — which may be defined differently from your taxable income — it is worth reviewing your pension scheme rules with your employer or a pension adviser. Similarly, any income-related benefits or allowances in the Netherlands that are means-tested may be calculated on your lower taxable income, which could work in your favour or affect your eligibility depending on the specific benefit.

Can my employer pay me less than the salary threshold and still apply the 30% ruling?

No. The salary threshold is a hard eligibility condition, not just a guideline. Your taxable salary — meaning the gross salary after the tax-free allowance has been deducted — must meet or exceed the applicable threshold (€48,013 in 2026 for most employees). If your taxable salary falls below this figure, you do not qualify, regardless of any other circumstances. Employers and employees should therefore ensure that the agreed gross salary is high enough that the remaining taxable portion still clears the threshold.

What is the difference between the fixed percentage method and actual cost reimbursement, and which should I choose?

The fixed percentage method allows your employer to pay up to 30% of your salary tax-free without requiring any proof of individual expenses — making it straightforward to administer for both parties. The actual cost reimbursement method, by contrast, requires you to document and substantiate every extraterritorial expense claimed, such as moving costs, language courses, or temporary housing. In practice, the fixed percentage method is almost always more advantageous and simpler, unless your actual extraterritorial costs genuinely exceed 30% of your salary, which is uncommon. The chosen method should be agreed in writing before the application is submitted, as switching between methods later is not straightforward.

How does the upcoming reduction to 27% affect employees who are currently using the scheme?

Employees who became eligible for the expat scheme before 1 January 2024 are protected under transitional rules and will continue to benefit from the full 30% rate for the remainder of their five-year period. However, employees who first became eligible on or after 1 January 2024 will see their tax-free allowance reduced from 30% to 27% when the change takes effect on 1 January 2027. If you are unsure which category applies to you, check the start date on your official approval decision and seek specialist advice to understand the financial impact on your net income going forward.

Can my family members or partner also benefit from the 30% ruling?

The 30% ruling applies specifically to the qualifying employee and is tied to their employment relationship with a Dutch employer — it does not extend directly to family members or a partner. However, a partner or family member who is also employed in the Netherlands and independently meets all eligibility conditions may apply for the scheme in their own right through their own employer. It is also worth noting that since 2025, the partial foreign tax liability option has been abolished, meaning the entire household’s Box 2 and Box 3 assets will now be subject to Dutch taxation, which is a consideration for families with significant foreign investments or shareholdings.

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