The 30% ruling for expats in the Netherlands explained

The 30% ruling, also known as the expat ruling or 30% facility, is a tax incentive designed to attract skilled workers from abroad to the Netherlands. For expats, the 30% ruling can make a move more financially viable. If you qualify, up to 30% of your gross salary can be tax-free, which helps offset the higher cost of living or any relocation expenses you may face. In this article, our Director of Operations Magda Kmetyk explains what the 30% rule is, how it works and which criteria you need to meet to qualify. 

What is the 30% ruling or 30% facility? 

The 30% ruling or 30% facility is a tax exemption offered by the Dutch government to highly skilled workers recruited from outside the Netherlands. Under this scheme, 30% of your gross salary can be paid tax-free, meaning only 70% of your salary will be subject to income tax.  

The 30% ruling was introduced to help companies in the Netherlands attract international talent, especially in fields where local expertise is scarce, such as IT, engineering, finance, and certain scientific sectors. The idea is that the tax-free portion of your salary can help cover the extra costs you might incur when moving to a new country, such as higher living costs or relocation expenses (such as moving costs or language courses).

How does the 30% ruling work?

If you’re eligible for the 30% ruling, your employer can pay you up to 30% of your salary as a tax-free allowance. For example, if you have a gross salary of €50,000, under the 30% rule, €15,000 would be tax-free and you would only pay tax on the remaining €35,000.  

The tax relief can be applied retrospectively for up to four months before the date of application if you were eligible when you started work. The ruling originally applied for up to ten years, but this has been reduced to five years from 2019. However, if you were eligible for the 30% rule before this change, transitional rules may still apply. 

Recent changes to the 30% ruling

From 1 January 2024, the Dutch government introduced significant changes to the 30% rule for expats. Under the current system, the following rules apply: 

  • For the first 20 months of employment, up to 30% of your salary is tax-free, 
  • For the next 20 months, the percentage of tax-free salary is reduced to 20%,  
  • For the next 20 months after that, the percentage of salary exempt from tax is further reduced to 10%.  

In addition, the 30% rule only applies to a maximum amount that is set each year. In 2024, this ceiling is set at €233,000. 

From 30% to 27%

On ‘Prinsjesdag’ 2024, the Dutch government introduced new changes to the expat ruling. Starting January 1, 2027, the tax-free allowance will be reduced from 30% to 27%. This will apply uniformly for the entire 5-year period, replacing the previous phased-out format described above. For 2025 and 2026, the 30% rate will continue to apply.  

Expats receiving the benefit in 2024 will revert to the 5 year 30% scheme, just like everyone else, ensuring that there is no gradual reduction. 

”From 2027, the 30% ruling will become a 27% ruling.”

Benefits of the 30% ruling 

  • Tax reduction: The main benefit of the 30% rule is the reduction in income tax, which allows expats to increase their net income, especially in a high earning position. 
  • No need to justify expenses: Unlike other tax deductions that require receipts or proof of expenses, the 30% rule provides an exemption without the need to substantiate actual costs with receipts or proof of expenses. 
  • Possible additional tax benefits: In addition to tax savings, the 30% rule may also allow you to be treated as a non-resident taxpayer. This status means that income from savings and investments, such as dividends or capital gains from assets outside the Netherlands, may not be subject to Dutch tax. You can also deduct international school fees for your children. 
  • Simplified application for a Dutch driver’s licence: Another lesser-known benefit is that if you qualify for the 30% rule, you may be able to exchange your foreign driving license for a Dutch one without having to take a driving test. 

Requirements to qualify for the ruling 

Not all expats are eligible for the 30% ruling. To qualify, you must meet specific criteria outlined by the Dutch tax authority (‘Belastingdienst’): 

  • Recruited from abroad: To qualify, you must have been recruited or transferred from abroad to work in the Netherlands. This means that if you were already living in the Netherlands and then found a job, you probably won’t qualify. You must prove that you lived at least 150 kilometres outside the Dutch border for at least 16 of the 24 months before you started work. 
  • Specialized skills: The 30% rule is intended for highly skilled workers, so you must have expertise or experience that is scarce or in demand in the Dutch labor market. There is no formal list of in-demand skills, but it is often applied to fields such as IT, engineering, scientific research and finance. At IQ Staffing, we only recruit for the types of positions which specialized skills are required. 
  • Salary threshold: To qualify for the scheme in 2024, your annual taxable salary (after applying the 30% tax-free allowance) must be at least €41,954. However, if you are under 30 and have a Master’s degree, the salary threshold is lower at €31,891. In 2025, the thresholds will rise to €50,436 and €38,338 respectively. These thresholds will be reviewed periodically and may change each year. 

How to apply for the 30% ruling 

You cannot apply for the 30% ruling yourself. Your employer must apply to the Dutch tax authorities on your behalf. This involves submitting documents such as proof that you have been living outside the Netherlands, your employment contract and proof of your special skills or qualifications, for example your diploma.   

The application must be submitted within four months of the start of your employment so that it can be applied retroactively to your first pay period. After this period, it can still be applied but will not cover previous months of employment. 

Once the ruling is granted, the allowance will be applied to your salary. It’s important to check regularly that you continue to meet the conditions throughout the period that the 30% rule is in effect. For example, if your salary falls below the required threshold or your role changes, you may no longer qualify. 

Want to know more?

The 30% ruling is a valuable financial incentive for expats moving to the Netherlands, especially those in high-demand fields such as IT or recruitment. Are you considering a move to the Netherlands? IQ Staffing’s talent acquisition specialists will be happy to tell you more about the opportunities and help you find a position that matches your skills and aspirations. Please do not hesitate to contact us for more information.