The 30 percent ruling in the Netherlands explained

The 30% ruling is the single biggest swing in what a newcomer to the Netherlands actually takes home. It is also the piece of Dutch tax that people get wrong most often. Three assumptions do the damage: that it comes attached to the job, that it lasts as long as you stay, and that you can go and get it yourself. None of the three is true.

What follows is the mechanism, in the order it will matter to you. Who qualifies, who applies and by when, and how long it runs. Why it is not a flat 30% for everyone, what a job move costs you, and the quieter change that pulled foreign savings back into the Dutch net. Every figure and rule below comes from the Dutch tax office and the Dutch government's own pages rather than from a relocation brochure.

One naming note before the detail. The official name is now the expat scheme, expatregeling in Dutch. Employers, recruiters and the tax office's own payroll manual all still say 30%-regeling, so that is what you will hear in an interview and what appears on your payslip.

What the ruling actually is

Moving countries for work creates extra costs. Higher living expenses than at home, a house hunting trip, permits and document conversions, medical checks, sometimes a home you are still paying for elsewhere. Dutch tax law calls these extraterritorial costs, and it lets your employer cover them without either of you paying tax on the money.

There are two ways to do that. Your employer can reimburse the real costs, which means keeping proof of every one of them. Or, if you qualify, your employer can skip the paperwork and pay you up to a fixed percentage of your salary tax free, with no evidence required at all. That second route is the 30% ruling.

Two details in that sentence do a lot of work. The choice between the two methods is made once a year, in the first payroll period of the calendar year, and it holds for the whole year. You cannot run both at once. And the percentage is a ceiling, not an entitlement. Your employer is allowed to pay you less than the maximum, and some do. Agree the actual figure in writing before you sign, because nothing obliges a company to hand over the full amount.

A few things sit alongside the scheme rather than inside it. Moving costs, temporary storage and shipping your belongings, a familiarisation visit to the company, and fees for an international school can still be reimbursed tax free on top.

Who qualifies

Four conditions have to be met together. You are in salaried employment with the employer applying. You have what the law calls specific expertise. You count as an incoming employee. And the tax office has issued a decision, a beschikking, saying the scheme may be applied to you.

Specific expertise sounds like a judgement call. In practice it is a salary test. Your taxable annual salary has to clear an indexed threshold, measured excluding the tax free allowance itself. That exclusion is where people miscalculate: the number that counts is what remains taxable, not your headline package.

There is a second, lower threshold for younger arrivals. If you hold a Dutch academic master's degree or an equivalent foreign qualification, the reduced norm applies up to and including the month in which you turn 30. From the month after that, you have to clear the ordinary norm, which for some people means a raise or the end of the ruling. Both thresholds are indexed every year, so treat any figure you read as a snapshot. At the time of writing the ordinary norm sits just above €48,000 of taxable annual salary, and the reduced norm just above €36,000. Check the current table on belastingdienst.nl before you rely on either.

Two groups skip the salary test entirely: researchers doing scientific work at designated institutions, and doctors training to become specialists. In rare cases the tax office adds a scarcity test on top of the salary test, for sectors where practically everybody clears the threshold anyway. Professional footballers are the example the tax office itself gives.

Then the geography. To count as an incoming employee you must have lived more than 150 kilometres from the Dutch border, measured as the crow flies. That has to hold for more than 16 of the 24 months before your first working day here. That excludes Belgium and Luxembourg outright, along with large parts of Germany, northern France and a small part of the United Kingdom. Living on Aruba, Curacao, Sint Maarten or the BES islands counts as recruited from abroad.

Two carve outs exist. People who worked in the Netherlands before under the scheme, left, and came back can requalify under conditions tied to that earlier period. So can PhD graduates who did their research here, provided they met the distance test in the two years before the research began. Both are narrow and both turn on dates in your own history, so check them against your own timeline rather than assuming.

Your employer applies, and a clock is already running

You cannot apply for this yourself. The request is a joint one, made on the tax office's own form, signed by you and your employer, with the signed contract, a CV and any relevant diploma attached. It goes to the tax office's foreign expertise centre in Heerlen, and you get an answer within eight weeks.

Here is the deadline that costs people money. To use the scheme from your first working day, the request has to reach the tax office within four months of that day. Miss it, and the decision simply starts later. For the months in between, your employer may only reimburse actual, documented extraterritorial costs tax free, which in practice means a lot less than the ruling would have been worth.

So the question to ask at offer stage is not whether the company knows about the 30% ruling. It is who is filing it and in which week. A payroll department that gets to it in month five has quietly taken a chunk of your first year.

The decision you receive states two dates: when the scheme starts and the latest date it can end. Read both when it arrives.

How long it lasts

The maximum term is five years. It has been cut over the life of the scheme, down from ten years, which is why older guides and longer serving colleagues will quote you numbers that no longer exist.

Five years is a maximum, not a promise. The tax office subtracts earlier periods of living or working in the Netherlands from it, looking back twenty five years from your arrival. Small amounts of prior contact are ignored. Up to 20 working days a year, and up to six weeks a year of holidays, family visits or other private stays, or one single stretch of up to three months.

If you did an internship here, or a semester, or a year on a previous contract, your decision may be materially shorter than five years. That is not an error. It is on your decision, in writing, and it is the number to plan your finances around.

At the other end, the scheme runs at the latest until the last day of the payroll period following the one containing your final working day. If you leave mid month, you do not lose the rest of that month.

It is not a flat 30% for everyone

Two things bend the headline number.

The first is a ceiling. The exempt allowance only applies to salary up to a maximum amount, which is set each year at the top salary norm from the Dutch law standardising senior public pay. Above that ceiling the tax free amount stops growing, however much you earn. If you are on the scheme for only part of a year, the maximum is pro rated across that part.

The second is the percentage itself, which has been legislated downwards from 30% to 27%. Which version applies to you depends entirely on when your decision started. There are three groups.

• Rulings already running before the first round of changes keep 30% for their full term, on the older indexed salary norm.
• Rulings that started in the first year of changes keep the older indexed salary norm, but step down to 27% when that reduction takes effect.
• Rulings starting after that step down to 27% and face a salary norm that is raised on top of the usual annual indexation.

Now the part that matters most for anyone reading around this topic online. An entirely different design was written into Dutch law before this one. It had the exemption stepping down inside your own term: 30% for twenty months, then 20% for twenty months, then 10% for the last twenty. That version was scrapped before the first step down ever took effect. Nobody was ever actually paid at 20% or 10%. You will still find it described on advisory blogs, on forums, and on at least one English language government page that has not been updated. If a source tells you your benefit drops after twenty months, that source is out of date.

The salary norm is tested every year, not once

This is the condition that catches people who already have the ruling and think they are done with it.

Your employer has to check every year that your salary still clears the indexed norm. If it does not, the ruling lapses with retroactive effect to the first day of that year, and the payroll returns for the year have to be corrected. Worse, it does not come back. If your income recovers the following year, the scheme may not be applied again.

Where the contract starts or ends mid year, the salary is recalculated to a full year equivalent for the test. Parental leave, maternity and birth leave, additional birth leave, foster care leave and adoption leave are protected: the test uses the salary you would have received without the leave.

There is one useful lever. Because the exempt percentage is a maximum rather than a requirement, an employer can dial the exempt part down so that the remaining taxable salary still clears the norm. You keep the ruling on a smaller benefit instead of losing it outright. Raise this before a pay cut, a move to four days a week, or a long unpaid absence. A drop to part time is the most common way people lose the ruling without ever deciding to.

If you change jobs

The ruling does not travel with you on its own. Three situations, three outcomes.

Moving between employers inside the same connected group of withholding agents is the easy case. Your existing decision stays valid without a new application, provided you still meet the conditions at the new entity. Ask your employer whether the two companies actually sit in that same group, because it is not obvious from the outside.

A takeover is the other easy case. If your employer is acquired, the ruling transfers to the acquiring company by operation of law and nobody needs to reapply.

Everything else means a fresh joint request, and two clocks run at once. You have to start with the new employer within three months of your last working day at the old one. And the new request has to be in within four months of your first day at the new employer for the scheme to apply from that first day. If you were put on garden leave rather than working out your notice, the three month period starts on the first day of that non active status.

Read that again if you are planning a break between jobs. Three months of travelling between contracts can end a ruling that still had years left on it.

The box 3 change most people missed

The ruling used to come with a second, quieter benefit that was worth more than the headline percentage to anyone with assets.

Holders could opt in their income tax return to be treated as a non resident for box 2 and box 3 while living in the Netherlands. Box 3 is the Dutch tax on savings and investments. In practice, the choice meant declaring only Dutch property and Dutch holdings rather than a worldwide portfolio, and leaving foreign savings and investments outside the Dutch calculation.

That choice has been abolished. A transitional arrangement lets people who already held the ruling in the last payroll period before the change carry on using it for a limited run of further years, and that window is closing. Once it does, everyone on the ruling declares box 2 and box 3 exactly like any other Dutch resident, on worldwide assets.

Say you have an investment account, or a flat you kept in your home country. This change can outweigh the difference between 30% and 27% several times over. It is the first thing to put in front of an adviser, not the last.

Where it meets your Dutch tax return

The ruling is a payroll mechanism. Your employer applies it through the wage tax, so the exempt part is already reflected in your monthly payslip and in the taxable wage reported for you. You do not claim it in your income tax return, and you cannot rescue a ruling nobody applied for by filing cleverly at the end of the year.

You still file. Filing is triggered by an invitation from the tax office, or by having income and assets to declare, and having the ruling does not exempt you from any of that. The year you arrive and the year you leave use the migration return, the M-form. It is longer and fiddlier than the standard one, because it splits the year between resident and non resident periods.

The partial non resident choice, where the transitional arrangement still allows it, is made in the return itself. There is no separate form. You answer the box 2 and box 3 questions as a non resident would, and you can make or change that choice up to the point the assessment becomes final.

One risk worth naming. If the annual salary test fails, your employer has to go back and correct the payroll returns for the whole year. Who carries the resulting cost is a matter for your employment contract, so read what yours says about the ruling before you sign it.

The other salary number: your permit is not your ruling

A lot of confusion comes from two different salary thresholds set by two different bodies for two different purposes.

The tax threshold above decides whether you get the 30% ruling. It is an annual taxable salary, set by the tax office. The immigration threshold decides whether you get a highly skilled migrant residence permit. It is a gross monthly salary, set by the immigration service, with separate brackets for people under 30 and from 30 upwards, plus a reduced criterion for recent graduates of a Dutch orientation year.

Clearing one does not clear the other. A permit does not bring a ruling with it, and a ruling is not a permit. If your offer is built around the immigration minimum, check the tax norm separately before you assume the 30% ruling is coming.

What the ruling does not do

The exempt part of your salary sits outside the wage used for employee insurance contributions, and your employer does not calculate those contributions on it. That same wage figure is what unemployment and incapacity benefits are worked out from, so the ruling shrinks the base those are built on. Whether the exempt part counts towards your pension is a question for your employer's pension scheme, and the answer varies, so ask rather than assume.

It also does not reduce box 3. The exemption applies to your wage, not to your wealth. And it is not immigration status, a residence permit or a work authorisation of any kind.

Your first months, in order

1. Settle it before you sign. Ask three questions: will you apply, what percentage will you actually pay me, and who carries the cost if it is refused or lapses. Get the answers into the contract.
2. Check the distance test honestly. More than 150 kilometres, more than 16 of the previous 24 months, counted back from your first working day. Border cases fail, and finding out afterwards is expensive.
3. Check your salary clears the norm excluding the allowance. Ask payroll to show you the taxable figure they will report, not the gross package.
4. Push the application out early. Four months from your first working day is the line between getting the ruling from day one and losing those months.
5. Read the decision when it arrives. Note the start date and the latest end date, and check whether prior time in the Netherlands has shortened your term.
6. Diary the annual check. Before any pay cut, move to part time or long unpaid leave, ask whether the taxable salary will still clear the norm.
7. Model the cliff edge. Work out your net pay without the ruling well before the term ends, because the drop arrives in one step.

When it is worth paying someone

Is your situation plain? One employer, one country, a salary comfortably above the norm, no assets elsewhere. Your employer's payroll team will handle it and you do not need to pay anybody.

It is worth an hour of professional time when your history has a seam in it. Earlier time in the Netherlands that might shorten the term. A border region address in the two years before you started. A job change with a gap in the middle. A pay drop or a move to part time. A portfolio, a rental property or a holding company abroad, now that the box 2 and box 3 shelter is going. A partner with their own income and their own filing position. Or an arrival or departure year, where the migration return and a ruling that starts or stops mid year interact in ways that are easy to get wrong.

Those are the cases where an adviser costs less than the mistake. If you would rather have a person read your situation with you, you can compare vetted English-speaking tax advisers and accountants in Amsterdam on Locallista. Every business listed is screened before it goes up and the reviews are phone verified, so the ranking reflects what people actually experienced rather than who paid the most. Browsing and getting in touch are both free.

Frequently asked questions

Can I apply for the 30% ruling myself?

No. The request is a joint one and it has to come from your employer, signed by both of you, on the Dutch tax office form. You cannot file it alone, and you cannot claim the benefit later in your income tax return if nobody applied. Settle it before you sign the contract, not after you land.

Does the ruling move with me if I change jobs?

Not by itself. Inside a connected group of withholding agents your existing decision can stay valid. Otherwise you and your new employer file a fresh joint request. You have to start the new job within three months of your last working day at the old one. The request then has to be in within four months of your first day, if you want the ruling from day one.

What happens if my salary drops below the threshold?

The ruling lapses back to the first day of that year, and the payroll returns for the year have to be corrected. It does not come back later if your pay recovers. Because the exempt percentage is a maximum rather than a requirement, an employer can often reduce the exempt part so that the taxable part still clears the norm. Going part time is the classic way people lose it without noticing.

How long does it last, and can it be shorter than the maximum?

The maximum term is five years. Time you previously lived or worked in the Netherlands in the twenty five years before you arrive is subtracted from it, with small carve outs for short business trips and holidays. Your decision states the latest end date, and for anyone with Dutch history that date is often earlier than the full term.

Do I still have to file a Dutch tax return if I have the ruling?

Yes. The ruling runs through payroll rather than through your return, so the exempt part is already reflected in your payslip. You still file when the tax office invites you to, or when you have other income to declare. The year you arrive and the year you leave use the migration return rather than the standard one.

Does the ruling still shelter my savings and investments abroad?

Not for new holders. The choice to be treated as a non resident for box 2 and box 3 while living here has been abolished. A time limited transitional arrangement covers only people who already held the ruling before that change. Once it runs out, foreign savings and investments are declared in the Netherlands like any resident's.