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The 30% ruling becomes 27% from 1 January 2027 for most people. This includes everyone whose ruling started in 2024 or later, as well as new starters. Only employees who used the ruling in the last payroll period of 2023 keep the full 30%, and the salary thresholds go up for 2027.
Employees and employers both need to act before January. Net pay will drop slightly unless the package changes, so employees should check how their contract describes the allowance. Employers need to update payroll per employee, because colleagues can be on different percentages depending on when their ruling started.
The ruling runs through Dutch payroll, so the set-up matters. Employer and employee apply together, ideally within four months of the start date. A company without a Dutch entity can still offer the ruling through an Employer of Record, but this needs arranging before the employee moves.
If you moved to the Netherlands for work, or you are hiring someone who will, the 30% ruling has probably come up in salary talks. It is one of the most valuable tax benefits in Dutch payroll, and on 1 January 2027 it changes.
From that date, the maximum tax-free allowance under the Dutch 30% ruling drops to 27% for most people, and the salary you need to qualify goes up. One group keeps the full 30%. Whether you are an employee wondering what happens to your payslip, or an employer updating payroll before the January run, this guide explains what changes, who it affects and what to do now.
| 27%Maximum tax-free allowance from 1 January 2027, down from 30% | €50,436New standard salary threshold, in 2024 prices and indexed to 2027 levels | 30%Kept by employees who used the ruling in the last payroll period of 2023 | 5 yearsMaximum duration of the ruling, unchanged |
Source: Belastingdienst, Coming to work in the Netherlands: 30% facility; Business.gov.nl, 30% ruling: compensation down to 27%.
The 30% ruling, known in Dutch as the “30%-regeling” and often called the “expat scheme”, is a tax facility for employees recruited from abroad to work in the Netherlands. It allows the employer to pay part of the salary as a tax-free allowance to cover the extra costs of living away from home, such as double housing costs, trips home and a higher cost of living. The Dutch tax authorities call these extraterritorial costs.
Instead of collecting receipts for every cost, the employer pays a fixed tax-free allowance of up to 30% of salary. Employers can choose to reimburse the actual costs instead, but most use the ruling because it is simpler for everyone.
One point that often surprises people: an employee cannot apply for the 30% ruling alone. It runs through Dutch payroll. The employer and employee request it together from the Belastingdienst (the Dutch Tax and Customs Administration), and the employer then applies it every pay period.
In practice, the allowance means less of the same gross salary is taxed. The example below shows how the split changes in 2027 for a salary package of €80,000 a year.
How a €80,000 salary package is split: 30% vs 27%
30% ruling (until 31 December 2026)
| €24,000 tax-free | €56,000 taxable |
27% ruling (from 1 January 2027)
| €21,600 tax-free | €58,400 taxable |
Tax-free allowance Taxable salary
Result: €2,400 more of the same package is taxed from 2027. This is an illustration of the split, not a net pay calculation.
Source: Illustrative calculation by ThisWorks based on Belastingdienst, Handboek Loonheffingen and Belastingdienst, Coming to work in the Netherlands: 30% facility.
That is €2,400 of salary moving from tax-free to taxable. What it means for net pay depends on each person’s tax position, so treat this as a picture of how the ruling works rather than a pay calculation.
The changes were agreed in the Tax Plan 2025 and take effect on 1 January 2027. There are three to know about, plus one rule that protects a specific group.
From 1 January 2027, the maximum tax-free allowance becomes 27% of salary. This applies to people who start using the ruling in 2027, and also to most people who already have it, including everyone whose ruling started in 2024, 2025 or 2026. Despite the name, the 30% ruling becomes a 27% ruling for most expats.
To qualify, an employee needs specific expertise that is scarce on the Dutch labour market. The Belastingdienst tests this mainly through salary. From 2027, the thresholds rise to €50,436 a year, or €38,388 for employees under 30 with a Dutch master’s degree or equivalent. Both figures are set in 2024 prices and will be indexed to 2027 levels, so the final figures will be higher. You will find the current and upcoming thresholds side by side in the requirements section below.
Who keeps 30%: the transitional rule
Employees who already used the 30% ruling in the last payroll period of 2023 keep the full 30% for the rest of their ruling period. They also keep the salary thresholds that applied before the change. If the ruling was first applied in January 2024 or later, this protection does not apply.
Until 2025, people with the ruling could choose to be treated as partial non-resident taxpayers. In short, they were not taxed in the Netherlands on most savings and investments abroad (box 3) or on substantial shareholdings (box 2). The option was abolished from 1 January 2025, but the 2023 group could keep it until 31 December 2026.
From 2027, nobody can use it. If you are in that group and hold savings or investments outside the Netherlands, it is worth checking your 2027 position with a tax adviser before the year starts.
So which rules apply to you? It depends on when your ruling started.
What applies to you in 2027?
| Your situation | Tax-free allowance from 2027 | Salary threshold | Partial non-resident status |
|---|---|---|---|
| Ruling applied in the last payroll period of 2023 | 30% until the ruling ends | Pre-2027 thresholds, indexed | Ends 31 December 2026 |
| Ruling started in 2024, 2025 or 2026 | 30% until 31 December 2026, then 27% | 2027 thresholds | Not available |
| Ruling starts in 2027 or later | 27% | 2027 thresholds | Not available |
Source: Belastingdienst, Coming to work in the Netherlands: 30% facility; Business.gov.nl, 30% ruling: compensation down to 27%.
The ruling has been debated in Dutch politics for years. In 2023, parliament voted for a phase-down: 30% for the first 20 months, then 20%, then 10%. Before anyone reached the lower rates, the Tax Plan 2025 replaced that plan with a flat 27% from 2027. It was a compromise between reducing the cost of the scheme and keeping the Netherlands attractive to international talent.
The timeline below shows how the rules have moved since 2019.
How the 30% ruling has changed: 2019 to 2027
| 2019 | Shorter duration. The maximum period is cut from eight years to five. |
| 2024 | Salary cap. The allowance is only calculated over salary up to the public-sector pay norm (WNT). A 30/20/10 phase-down is also legislated but never takes effect. |
| 2025 | Compromise reached. Partial non-resident tax status is abolished, with a transition period for the 2023 group. The Tax Plan 2025 scraps the phase-down and replaces it with 27% from 2027. |
| 2026 | Last year at 30% for most. Transitional partial non-resident status ends on 31 December. |
| 2027 | 27% and higher thresholds. Employees who used the ruling in the last payroll period of 2023 keep 30%. |
Source: Business.gov.nl, 30% ruling: compensation down to 27%; Belastingdienst, Coming to work in the Netherlands: 30% facility; Business.gov.nl, The expat scheme (30% ruling) in the Netherlands.
The 2027 changes do not touch the basic conditions. To use the ruling, all of the following must apply.
30% ruling requirements in the Netherlands
| Requirement | What it means |
|---|---|
| Recruited or seconded from abroad | The employee is hired from outside the Netherlands, or sent here by a group company abroad. |
| 150 km rule | For more than 16 of the 24 months before the first working day in the Netherlands, the employee lived more than 150 km from the Dutch border. |
| Specific expertise | Shown by meeting the salary threshold. Scientific researchers and medical specialists in training are exempt. |
| Dutch payroll employer | The employer must be registered to withhold Dutch payroll tax. |
| Written agreement | Employer and employee agree in writing that the allowance applies. |
| Joint request | Employer and employee request the ruling together from the Belastingdienst. |
| Maximum duration | Five years, minus any earlier periods of living or working in the Netherlands. |
Source: Belastingdienst, Coming to work in the Netherlands: 30% facility; Business.gov.nl, The expat scheme (30% ruling) in the Netherlands; Wet op de loonbelasting 1964, article 31a.
Most of these are easy to check before the employee’s first day. The two that raise the most questions are the salary threshold and the 150 km rule.
The threshold applies to taxable salary, which is the salary after the tax-free allowance is taken off. In other words, the gross salary has to be noticeably higher than the figure shown. To put these numbers in context, you can compare them with the average salary in the Netherlands.
30% ruling salary thresholds: 2026 and 2027
|
Standard threshold
2026€48,013taxable salary per year
2027€50,436*taxable salary per year
|
Under 30 with a Dutch master's degree or equivalent
2026€36,497taxable salary per year
2027€38,388*taxable salary per year
|
*Set in 2024 prices and indexed to 2027 levels, so the final 2027 figures will be higher. Taxable salary is salary after the tax-free allowance. Scientific researchers and medical specialists in training have no threshold.
Source: Belastingdienst, Handboek Loonheffingen; Business.gov.nl, 30% ruling: compensation down to 27%.
These thresholds are separate from the salary requirements for work permits. We explain the difference further down, because mixing the two up is one of the most common mistakes we see.
For more than 16 of the 24 months before the first working day in the Netherlands, the employee must have lived more than 150 km from the Dutch border. Distance is measured in a straight line to the nearest point of the Dutch border. Someone moving from Lyon, Warsaw or Toronto qualifies easily. Someone moving from Düsseldorf or Antwerp normally does not, because both cities are well within 150 km of the border.
The ruling lasts for a maximum of five years. Any time the employee previously lived or worked in the Netherlands in the 25 years before the start date is deducted. For example, someone who worked in Rotterdam for 18 months a few years ago would have 42 months of the ruling left.
The ruling can also end early, for example when the salary falls below the threshold, or when the job ends and no new qualifying job starts within three months.
Since 1 January 2024, the allowance is only calculated over salary up to the Dutch public-sector pay cap, known as the WNT norm or Balkenende norm. For 2026 the cap is €262,000, which puts the maximum tax-free allowance at €78,600. Salary above the cap is taxed normally. This mainly affects senior and executive packages, but it is worth checking when building one.
For most people with the ruling, the change will show up on the first payslip of 2027. If your gross salary stays the same, a smaller part of it is tax-free, so your net pay will be a little lower. A few things are worth checking with your employer now:
“Most questions we get are not about the percentage itself, they are about the payslip. People want to know what they will actually take home in January. Our advice is simple: ask your employer now how your contract is worded and whether your package will be reviewed, so payday does not come as a surprise.”
– Imke van Rengs, Team Lead Netherlands, ThisWorks
For employers, this is mainly a payroll and communication task. Simple in principle, but easy to get wrong when a team includes people on different rules.
Check how the allowance is described in employment contracts and 30% ruling addendums. A clause that promises “a 30% tax-free allowance” may need updating, while wording that refers to “the maximum allowance under the 30% ruling” usually adapts by itself. If you are unsure, have the wording reviewed before January.
From the first pay period of 2027, payroll needs to apply 30% to employees in the transitional group and 27% to everyone else. That means knowing when each employee’s ruling first started, not just whether they have one. The allowance also needs to be designated correctly under the work-related costs scheme (werkkostenregeling), and salaries should be checked against the new thresholds as soon as the indexed figures are published.
If your payroll is handled externally, now is a good moment to check that your provider is ready for the change. If you need help with the application itself, our 30% ruling assistance can take care of it, alongside our payroll services in the Netherlands.
Any offer made now for a 2027 start date should be based on 27%. Candidates often compare offers on net pay, and some will still have 30% in mind from older articles or friends who moved earlier. Being clear about what applies avoids an awkward conversation after the first payslip. If this is your first hire here, our guide to hiring in the Netherlands covers the wider picture.
Employer checklist before January 2027
Source: ThisWorks, based on Belastingdienst, Handboek Loonheffingen and Business.gov.nl, 30% ruling: compensation down to 27%.
“The mistake I expect to see most is treating the 30% ruling as one setting for the whole team. From January, two colleagues with the ruling can be on different percentages and different thresholds, depending on when their ruling started. My advice is to check every employee’s start date before the first 2027 payroll run, because correcting payroll afterwards always takes more work than getting it right first time.”
– Janneke Vossen, Backoffice & Payroll Manager at ThisWorks
From work permits to Dutch payroll and the 30% ruling, we handle the details of hiring international talent in the Netherlands. No Dutch entity required.
The process itself is short, but the timing matters.
How to apply for the 30% ruling in five steps
| 1 | Agree it in writingEmployer and employee confirm in writing that the 30% ruling applies, usually in the contract or an addendum. |
| 2 | Submit a joint requestBoth sign the request to the Belastingdienst (Verzoek loonbelasting 30%-regeling). |
| 3 | Apply within four monthsWithin four months of the start date, the ruling applies from the first working day. After that, it applies from the first day of the month after the request. |
| 4 | Receive the decisionThe Belastingdienst confirms the ruling in a decision (beschikking) that includes the end date. |
| 5 | Apply it through payrollThe employer pays the allowance tax-free every pay period and checks the conditions each year. |
Source: Belastingdienst, Application for the 30% facility; Belastingdienst, Coming to work in the Netherlands: 30% facility.
Missing the four-month window does not mean losing the ruling, but it does mean losing months of tax-free allowance that cannot be claimed back. We handle 30% ruling applications as well as our Employer of Record services in the Netherlands and payroll services, so the request can go alongside the employee’s onboarding.
The ruling can move with you. If your new job starts within three months of the previous one ending, your new employer can apply to continue the ruling for the remaining period. The new employer has to submit a new request, and you still need to meet the salary threshold in the new role.
More people now keep their job when they relocate, especially in remote-first teams. The catch is that the ruling runs through Dutch payroll, and a company without a Dutch entity usually has none. The employer can register as a foreign employer for Dutch payroll tax, use a payroll provider, or use an Employer of Record that employs the person locally and runs payroll, the ruling included. Our article on choosing an EOR or payroll provider explains the difference.
Timing matters here. The 150 km rule and the “recruited from abroad” condition are assessed at the first working day in the Netherlands. If someone has already moved and started working here remotely, setting up Dutch employment afterwards may be too late. The safest approach is to arrange the employment before the move.
When you hire someone from outside the EU, the 30% ruling is not a substitute for a work permit. They are two separate processes that do different jobs. The work permit, usually a Highly Skilled Migrant permit or an EU Blue Card from the IND (the Dutch Immigration and Naturalisation Service), allows the employee to live and work in the Netherlands. The 30% ruling is a tax benefit from the Belastingdienst that applies once they are on Dutch payroll. Both have a salary requirement, which is why they are often confused, but each is assessed separately and meeting one does not guarantee the other.
Hiring from outside the EU: two separate processes
Work permitHighly Skilled Migrant permit or EU Blue Card What it doesLets a non-EU employee live and work in the Netherlands Decided byIND Who appliesThe employer Salary requirementSet by the IND WhenBefore the employee starts work |
+ | 30% rulingTax benefit on salary What it doesLets part of the salary be paid tax-free Decided byBelastingdienst Who appliesEmployer and employee together Salary requirementA separate threshold, set by the Belastingdienst WhenWithin four months of the start date |
Meeting one salary requirement does not mean meeting the other. EU employees do not need a work permit, but can still qualify for the 30% ruling.
Source: IND, required amounts for income requirements; Belastingdienst, Coming to work in the Netherlands: 30% facility.
Many international hires need both, which is where one partner for the permit and the payroll makes life easier. As an IND recognized sponsor, we can apply for the Highly Skilled Migrant permit or EU Blue Card and set up the 30% ruling for the same hire. Read more in our guides to the Highly Skilled Migrant permit and the work visa guide in the Netherlands.
| 30% ruling assistance Help with applying for the 30% ruling, from the written agreement to the request to the Belastingdienst. | Employer of Record Hire in the Netherlands without a local entity. We employ your new hire locally and run their Dutch payroll. Employer of Record in the Netherlands → |
| Payroll-only services Dutch payroll for companies that already have a Dutch entity. | Work permit assistance Support with Highly Skilled Migrant permits and EU Blue Cards, as an IND recognised sponsor. |
Yes. The ruling continues, but from 1 January 2027 the maximum tax-free allowance is 27% for most employees. Employees who already used the ruling in the last payroll period of 2023 keep 30% until their ruling ends.
A maximum of five years. Any earlier periods of living or working in the Netherlands in the 25 years before your start date are deducted from that.
No. You and your employer request it together, and the employer applies it through Dutch payroll. If your employer has no Dutch payroll, an Employer of Record can employ you locally and apply for it.
Yes, if your new job starts within three months of the old one ending and you still meet the conditions, including the salary threshold. Your new employer needs to submit a new request.
It is possible, but it needs planning. The employer can register for Dutch payroll tax or use an Employer of Record. The conditions are tested at your first working day in the Netherlands, so arrange this before you move.
Yes. “Expat scheme” and “expatregeling” are informal names for the 30% ruling (30%-regeling). The official name stays the same, even though the allowance drops to 27% for most people in 2027.
The 2027 changes make the 30% ruling more complex to manage, especially when your team includes people on different rules. We bring the 30% ruling, Dutch payroll, Employer of Record and work permit support into one service, so your international hires are set up properly from day one. Get in touch to talk through your next Dutch hire.
