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, officially called the expat scheme or expatregeling since 2025) 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%. There is a cap: in 2026 the tax-free allowance is at most EUR 78,600, which is 30% of a salary of EUR 262,000.
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. With the 2026 tax rates and tax credits, that is about EUR 12,000 less income tax in a year for a single employee below state pension age with no other income.
Who Qualifies for the 30% Ruling?
To qualify, you must meet several criteria:
- Recruited from abroad: For more than 16 of the 24 months before your first working day in the Netherlands, you must have lived more than 150 km (as the crow flies) from the Dutch border
- 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 more than EUR 48,013 per year (or more than EUR 36,497 if you are under 30 with a Dutch master's degree or an equivalent foreign one)
- Employed, not self-employed: You must be on the payroll of an employer that withholds Dutch wage tax (this can be a foreign employer). Freelance or self-employment income does not qualify
- Earlier time in the Netherlands: If you lived or worked in the Netherlands in the 25 years before you arrived, that time is deducted from the 5-year maximum (work of up to 20 days a year and visits of up to 6 weeks a year do not count)
Recent Changes: 27% From 2027
A phased "30-20-10" reduction was legislated for rulings starting from 2024, but it was scrapped before any step-down took effect. Instead, the tax-free allowance stays at 30% through 2026 and drops to a maximum of 27% from 1 January 2027, with higher salary thresholds. The total duration remains a maximum of 5 years (60 months). If your employer already applied the ruling in its last payroll of 2023, you keep 30% for the whole term. If it was first applied in 2024, you move to 27% in 2027 but keep the old salary threshold.
Important: Time you lived or worked in the Netherlands in the 25 years before you arrived is deducted from the 5-year period. And if you apply more than 4 months after starting work, the ruling only starts on the first day of the month after your application, so you get no tax-free allowance for the months before that.
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 the employment contract signed by you and your employer, and your CV showing where you lived and worked. Your master's diploma is only needed if you use the lower under-30 salary norm
- 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: the Belastingdienst says you will hear back within 8 weeks
Impact Beyond Income Tax
The 30% ruling provides additional benefits beyond the salary tax break:
- No more box 3 exemption: The option to be treated as a "partial non-resident taxpayer" (which limited box 3 to Dutch real estate and a few related rights) was abolished from 1 January 2025. Only rulings already applied in the December 2023 payroll keep it, and only until 31 December 2026. New arrivals pay box 3 on their worldwide assets like any resident
- Driving licence: You can exchange your foreign driving licence for a Dutch one without taking the full Dutch driving exam
- International schooling: Your employer can reimburse international school fees tax-free on top of the 30% allowance
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: Ask your employer whether your pension and any wage-related benefits are based on your full salary or only the taxable part. Consider the long-term trade-offs
- Not applying on time: If you apply more than 4 months after starting work, every month of delay 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. 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 box 3 tax on savings and our savings account comparison to make the most of your after-tax income.