What Is the 30% Ruling?
The 30% ruling (30%-regeling) is one of the Netherlands' most powerful tax incentives for attracting international talent. It allows qualifying employees recruited from abroad to receive up to 30% of their gross salary tax-free, as compensation for the extraterritorial costs of living and working in the Netherlands.
In practice, this means an employee earning €80,000 gross can receive an effective tax benefit that increases their net income by thousands of euros per year, while costing the employer nothing additional.
Eligibility Requirements (2026)
Both the employer and the employee must meet specific criteria:
- Employee Requirements:
- Recruited from abroad or transferred from a foreign entity of the same group
- Lived at least 150 km from the Dutch border for at least 16 of the 24 months before the start of Dutch employment
- Possesses specific expertise that is scarce or absent in the Dutch labor market
- Salary Threshold: The taxable salary (after applying the 30% ruling) must be at least €46,107 per year (2026 figure). A reduced threshold of €35,048 applies to employees under 30 who hold a qualifying master's degree.
- Employer Requirements:
- Registered as an employer in the Netherlands
- The employee was recruited from abroad — this means the employment agreement must have been reached while the employee was still living abroad
Application Process
The 30% ruling is applied for jointly by employer and employee at the Belastingdienst:
- Timing: Apply within 4 months of the employee's start date to receive the ruling retroactively from day one.
- Documentation: Employment contract, proof of previous residence abroad, qualifications, and the completed application form.
- Processing: The Belastingdienst typically processes applications within 2–4 months.
- Duration: The ruling is granted for a maximum of 5 years (60 months), reduced from the previous 8 years in 2024.
2024–2026 Changes & Transitional Rules
Important changes have been phased in that affect the 30% ruling:
- Reduction from 8 to 5 years: Applications made from January 1, 2024 are limited to 5 years maximum.
- Step-down structure (2024–2026): For new applicants after January 2024, the first 20 months receive 30%, the next 20 months 20%, and the final 20 months 10%.
- Transitional rules: Employees who had an existing 30% ruling before January 2024 may be grandfathered under the old rules — check your specific situation.
- Salary cap: The ruling applies to a maximum salary of the "Balkenende norm" (€233,000 in 2026). Amounts above this cap are fully taxed.
Practical Benefits Beyond Tax
The 30% ruling also provides several non-cash benefits:
- Partial non-resident tax status: The employee can opt for partial non-resident status for box 2 and box 3 income, meaning Dutch wealth tax does not apply to non-Dutch assets.
- Driver's license exchange: Employees with the 30% ruling can exchange their foreign driver's license for a Dutch one without taking a driving test.
- Reduced payroll costs: Since the 30% is tax-free, the employer can effectively reduce gross salary while maintaining the employee's net income — or use the same gross to offer a significantly higher net.
