The 30% ruling is one of the most valuable tax benefits available to expats in the Netherlands. If you qualify, your employer can pay 30% of your gross salary as a tax-free allowance, effectively reducing your income tax bill by thousands of euros per year. But the rules are specific, and recent changes have made it more complex than ever.
This guide covers everything you need to know about the 30% ruling in 2026.
What Is the 30% Ruling?
The 30% ruling (30%-regeling) is a Dutch tax advantage designed to attract skilled foreign workers. It recognises that expats face extra costs when relocating to the Netherlands—things like international school fees, housing premiums, travel home, and the general cost of maintaining ties to your home country.
Rather than requiring you to document and claim each of these "extraterritorial costs" individually, the Dutch tax authority (Belastingdienst) allows a flat 30% of your total employment income to be paid tax-free. This means you only pay income tax on the remaining 70%.
Example: If your gross salary is EUR 80,000, your employer can structure it so EUR 56,000 is taxable salary and EUR 24,000 is a tax-free allowance. At typical Dutch tax rates, this can save you EUR 8,000-12,000 per year.
Who Qualifies for the 30% Ruling?
To qualify, you must meet several criteria:
- Recruited from abroad: You must have been living more than 150 km from the Dutch border before starting your employment in the Netherlands
- Specific expertise: You must have skills or experience that are scarce in the Dutch labour market. In practice, this is determined by a minimum salary threshold
- Minimum salary requirement (2026): Your taxable salary must be at least EUR 46,107 per year (or EUR 35,048 if you are under 30 with a Dutch or qualifying master's degree)
- Employed by a Dutch employer: The ruling applies to employment income, not freelance or self-employment income
- Not a returning Dutch citizen: If you previously lived in the Netherlands, stricter conditions apply
Recent Changes: The 30-20-10 Rule
Starting from January 2024, the Dutch government reformed the ruling into a phased structure for new applicants:
- First 20 months: 30% tax-free allowance (unchanged)
- Months 21-40: 20% tax-free allowance
- Months 41-60: 10% tax-free allowance
If your ruling was granted before January 1, 2024, you are grandfathered under the original rules and continue to receive the full 30% for the entire duration. The total duration remains a maximum of 5 years (60 months) for everyone.
Important: Time spent in the Netherlands before applying counts against the 5-year period. If you waited 6 months before applying, you only get 54 months of benefits.
How to Apply
The application is a joint effort between you and your employer:
- Your employer submits the application to the Belastingdienst using the official form
- Required documents include your employment contract, proof of previous residence abroad, and educational qualifications
- Apply within 4 months of starting employment. You can apply later, but the ruling will only apply from the first day of the month following the application—you lose the retroactive benefit
- Processing time is typically 2-4 months
Impact Beyond Income Tax
The 30% ruling provides additional benefits beyond the salary tax break:
- Box 3 tax exemption: You can opt for "partial non-resident taxpayer" status, which exempts you from Dutch wealth tax (box 3) on non-Dutch assets. This includes foreign savings accounts, investments, and property outside the Netherlands
- Driving licence: You can exchange your foreign driving licence for a Dutch one without taking the full Dutch driving exam
- International schooling: While not a tax benefit per se, the ruling acknowledges international school costs as part of the extraterritorial expenses it covers
Common Pitfalls
- Changing employers: If you switch jobs, you need to reapply for the ruling with your new employer. The remaining duration carries over, but there must not be a gap of more than 3 months between jobs
- Salary reduction trap: The 30% tax-free portion reduces your taxable income, which in turn reduces your pension contributions and social security entitlements. Consider the long-term trade-offs
- Not applying on time: Every month you delay the application after starting work is a month of benefits lost
- Assuming automatic renewal: The ruling is granted for a fixed period. There is no extension beyond the maximum 5 years
Is the 30% Ruling Worth It?
For most qualifying expats, the answer is a resounding yes. The tax savings are substantial, and the box 3 exemption can be equally valuable if you have significant assets outside the Netherlands. However, consult a tax advisor to understand the full picture—especially the impact on your pension, social security, and long-term tax planning.
If you are eligible, make sure to discuss the 30% ruling with your employer before or during salary negotiations. Many employers are familiar with the process, and some will even factor it into your compensation package.
For more on managing your finances as an expat, check out our guide to the Dutch tax system and our savings account comparison to make the most of your after-tax income.