The 30% ruling: who gets it, and what it is worth now

The 30% ruling is a tax break for people recruited from abroad, and it is being cut.

The Belastingdienst now calls it the expatregeling, the expat scheme.

It lets an employer pay part of your salary as a tax-free allowance, which for a high earner is worth tens of thousands of euros a year.

The percentage holds at 30 through 2026 and drops to 27 from 1 January 2027.

What it actually does

It is not a discount on your tax rate.

It is a fiction the law allows: your employer designates a slice of what it already pays you as reimbursement for the extra costs of living abroad, and that slice is not taxed.

The Belastingdienst’s own wording is a maximum of 30% of salary including the allowance, which is the same thing as 30/70 of the salary excluding it.

The practical effect is the same either way.

Roughly three-tenths of the package arrives untaxed.

It is capped.

The cap is tied to the WNT norm, which for 2026 stands at €262,000.

The maximum tax-free allowance in 2026 is therefore €78,600, and the Belastingdienst states plainly that an employee receives the maximum at a salary of €262,000 or higher, prorated if the scheme is used for only part of the year.

Income above the cap gets nothing.

Who qualifies

Three conditions, all of which have to hold.

You must be employed by the employer making the request.

The employer applies, not you.

You must meet the definition of an incoming employee, which is the geography test.

And you must have specific expertise, which in practice is a salary test rather than a judgement about your skills.

The geography test is the one that disqualifies people who assume they are fine.

You must have lived more than 150 kilometres from the Dutch border for at least 16 of the 24 months before your first working day here.

That rules out Belgium and Luxembourg entirely, and most of the western German border region and northern France with them.

Someone moving from Düsseldorf to The Hague for a job does not get this.

The salary test for 2026 is a taxable annual salary above €48,013, excluding the tax-free allowance itself.

There is a lower figure of €36,497 for employees under 30 holding a Dutch master’s degree or a recognised foreign equivalent.

Both are indexed every year.

How long it lasts

A decision runs for a maximum of five years.

Time you previously spent in the Netherlands is deducted from that five years, looking back 25 years from your date of arrival.

Two things do not count against you in that lookback: up to 20 days a year working here, and up to six weeks a year on holiday, or a single unbroken stretch of up to three months.

A fortnight at the beach two decades ago does not cost you anything.

Two years on a previous posting does.

The application deadline matters more than most people realise.

The request has to reach the Belastingdienst within four months of the employee’s first working day for the scheme to apply retroactively from that first day.

Miss that window and the scheme starts later, and the months in between are simply lost.

It is the single most avoidable mistake in the whole process and it is usually made by an employer, not by the employee.

What is changing, and what already changed

Be careful with anything you read about this that is more than a year or two old, because one announced cut was reversed before it ever bit.

A tapering scheme, 30% then 20% then 10% across the five years, was legislated and then scrapped in the 2025 Tax Plan at parliament’s request.

It never took practical effect.

For 2025 and 2026 the full 30% applies to everyone who qualifies, for the whole of their entitlement.

What replaced it is simpler and smaller.

From 1 January 2027 the maximum drops from 30% to 27%, and it drops for the entire remaining 60-month period rather than only for new arrivals.

The salary norm rises at the same time, from a 2024 base of €46,107 to €50,436, indexed annually in the usual way, which means the figure that actually applies in 2027 will be higher than €50,436.

There are transitional rules.

Employees who were already using the scheme before 2024 keep 30% and stay on the old indexed salary norms.

If your decision predates that, the 2027 change is not aimed at you.

The side effect worth knowing about

A valid expat scheme decision from the Belastingdienst is one of the routes the RDW accepts for exchanging a driving licence from outside the EU or EEA without retaking the Dutch test.

The RDW lists it directly in the required documents.

The application goes through your gemeente, which forwards it, and the RDW’s stated timeline is a letter within 15 working days and collection at the municipality five working days after that.

For anyone arriving from the United States, India, Australia or elsewhere outside Europe, that is worth more than it looks.

A Dutch driving test from scratch is expensive and slow.

Deciding whether it is worth chasing

If your employer is already a recognised IND sponsor, it almost certainly files expat scheme requests routinely and there is nothing for you to do beyond supplying documents and watching the four-month clock.

If the employer is small and has never done it, raise it before you sign, because the tax-free slice is part of what the offer is worth and the deadline starts on your first day.

The scheme changes what your net pay looks like but not what you owe, so it does not remove the need to understand how the Dutch tax year works for employees, and it affects the salary that counts towards pension accrual.

When it ends, net pay falls sharply on a date you can predict five years in advance, which is a useful thing to know when weighing up what living here costs or committing to a mortgage.

Because the rules have moved three times in four years, a tax adviser in The Hague is genuinely useful here in a way they are not for a simple employed tax return, particularly if you have a pre-2024 decision or you are changing employer while the scheme is running.

Sources

• Belastingdienst, inhoud van de expatregeling: “maximaal 30% van het loon inclusief de vergoeding belastingvrij”, the 2026 maximum tax-free allowance of €78,600, and “Uw werknemer krijgt de maximale belastingvrije vergoeding bij een salaris van € 262.000 of hoger”
• Belastingdienst, voorwaarden voor de expatregeling: the three conditions of employment, specific expertise and the incoming-employee definition, plus the requirement for a decision from the tax authority
• Belastingdienst, deskundigheidsvereiste: the 2026 salary norm of €48,013 taxable annual salary excluding the exemption, and €36,497 for employees under 30 with a Dutch master’s degree or recognised foreign equivalent
• Belastingdienst, beschikking geldigheid en toetsen voorwaarden: “Beschikkingen voor de expatregeling hebben een looptijd van maximaal 5 jaar”, the 25-year lookback for prior Dutch residence or work, and the exclusions of up to 20 working days a year and up to six weeks of holiday a year or a single unbroken three months
• Belastingdienst, definitie ingekomen werknemer, and Ondernemersplein: the requirement to have lived more than 150 kilometres from the Dutch border for at least 16 of the 24 months before the first working day, and the four-month application deadline for retroactive effect from the first working day
• Ondernemersplein (overheid.nl) and PwC Prinsjesdag analysis of the 2025 Tax Plan: the reduction from 30% to 27% from 1 January 2027 applying to the full 60-month period, the salary norm rising from €46,107 to €50,436 on 2024 figures and indexed annually, the reversal of the earlier 30/20/10 tapering, and the transitional rules preserving 30% and the old indexed norms for employees who applied the scheme before 2024
• RDW, buitenlands rijbewijs omwisselen: the valid expatregeling decision from the Belastingdienst as a required document for exchanging a driving licence from outside the EU or EEA, and the timeline of a letter within 15 working days followed by collection five working days later