The 30% Ruling in the Netherlands: What Employers Need to Know
Recruiting talent from abroad is central to a lot of the internationally-owned companies we work with, and the 30% ruling is usually the first payroll question that comes up. It’s a valuable tax benefit, but the thresholds change every year, and a rate cut is already on the way for 2027.
What the 30% Ruling Covers
The 30% ruling allows employers to pay qualifying employees recruited from abroad a tax-free allowance of up to 30% of their salary, intended to cover the extra costs of relocating and working outside their home country. It applies for up to five years, and the employer and employee apply for it jointly with the Dutch Tax Administration.
2026 Salary Thresholds
- An employee with specific expertise must earn more than €48,013 annually.
- Employees under 30 with a qualifying master’s degree need only earn more than €36,497 annually.
- The ruling can only be applied up to a salary cap of €262,000, known as the Balkenende norm; anything above that is taxed normally.
The Change Coming in 2027
From 2027, the maximum tax-free allowance drops from 30% to 27% for the full duration of the ruling, and the salary requirements are set to rise as well. For 2025 and 2026, the rate stays at 30%. Employees who started using the ruling before 1 January 2024 keep the full 30% for their entire term under transitional rules, so it’s worth checking each employee’s start date rather than assuming the new rate applies across the board.
Payroll Administration Implications
Getting the 30% ruling right in payroll means splitting each qualifying employee’s salary correctly into taxable wages and the tax-free allowance, monitoring the salary threshold and cap every year, tracking the end date of each individual ruling, and adjusting when an employee changes employers. These details are exactly what surfaces in a payroll tax audit if they’re missed.
Hiring International Talent in the Netherlands?
Contact Harold or Remko today. Let’s discuss how our payroll and bookkeeping services can keep your 30% ruling administration accurate and audit-ready.