What is the Netherlands 30% ruling?
The 30% ruling (Dutch: 30%-regeling) is a Dutch tax incentive for highly skilled migrants recruited from abroad. It allows employers to pay 30% of an employee's gross salary as a tax-free expense reimbursement for extraterritorial costs — meaning you only pay income tax on 70% of your salary. The ruling is designed to attract international talent by offsetting the higher cost of relocating to and living in the Netherlands. For 2026, the 30% rate applies in full; it will be reduced to 27% from 1 January 2027 for remaining eligibility periods.
How do you calculate 30% ruling tax savings?
The calculation follows three steps: (1) Determine your tax-free allowance — 30% of your gross salary, capped at a maximum of €78,600 per year (30% of the €262,000 salary cap). (2) Subtract the allowance from your gross to get your taxable income: Taxable income = Gross salary × 70%. (3) Apply the 2026 Box 1 brackets (35.75% up to €38,883; 37.56% up to €78,426; 49.50% above) to both your full gross and your taxable income. The difference in tax is your annual saving. At €100,000 gross, for example, you pay tax on €70,000 instead of €100,000 — saving roughly €11,000–€13,000 per year depending on your other deductions. You can also use a salary-to-hourly calculator to see your equivalent hourly rate after the ruling is applied.
Who qualifies for the Netherlands 30% ruling in 2026?
To qualify in 2026, you must meet all of the following requirements: (1) You are employed by a Dutch employer and recruited from abroad. (2) You possess specific expertise that is scarce in the Dutch labour market. (3) Your taxable salary after the 30% deduction is at least €48,013 per year for standard employees, or €36,497 if you are under 30 and hold a Dutch master's degree or equivalent. (4) You meet the 150km distance rule (see below). (5) Your employer and you have both signed the necessary agreements. Scientific researchers and physicians in training are exempt from the salary threshold.
What is the 150km residency rule for the 30% ruling?
The distance rule requires that you lived more than 150 kilometres from the Dutch border for at least 16 of the 24 months immediately before your first day of work in the Netherlands. This rule is measured as the crow flies from the Dutch border — not driving distance. It excludes applicants from nearby countries such as Belgium, Luxembourg, and significant parts of Germany. The purpose is to ensure the ruling targets genuine international relocations rather than cross-border commuters. To check whether your previous address qualifies, the Belastingdienst provides official guidance on the 150km zone.
What are some 30% ruling calculation examples?
At a gross salary of €80,000: tax-free allowance = €24,000; taxable income = €56,000. Box 1 tax on €80,000 ≈ €28,960; Box 1 tax on €56,000 ≈ €20,332. Annual saving ≈ €8,600, or about €720 per month. At a gross salary of €120,000: tax-free allowance = €36,000; taxable income = €84,000. Box 1 tax on €120,000 ≈ €49,427; Box 1 tax on €84,000 ≈ €34,178. Annual saving ≈ €15,200, or about €1,270 per month. Note that actual savings will be higher once employer-specific tax credits are applied — this calculator shows the bracket-level comparison. If you are considering building wealth with your tax savings, the compound growth calculator can project long-term investment returns.
What is changing with the 30% ruling in 2027?
From 1 January 2027, the tax-free percentage will be reduced from 30% to 27% for all employees — whether already using the ruling or newly applying. The salary thresholds will also be updated (exact 2027 figures are announced annually). Employees who started the ruling before 1 January 2024 under transitional rules retain their terms for the remainder of their 5-year period. The 2024 sliding scale experiment (30%/20%/10% in successive 20-month periods) was reversed before it fully took effect, so the flat rate remains until the 2027 reduction. If you are planning a move to the Netherlands, 2026 is the last year to secure the full 30% rate for your entire term. Financial planning tools like a FIRE calculator can help you model how the additional take-home pay accelerates your financial independence timeline.
How long does the 30% ruling last?
The ruling has a maximum duration of 5 years from the start date. The 5-year clock starts on the first day of employment with a Dutch employer — or from the date of approval if it was applied retrospectively. If you previously used the 30% ruling in the Netherlands, any prior period counts against the 5-year limit: a 2-year previous ruling leaves only 3 years remaining on a new application. There is no automatic renewal; both employer and employee must apply and continue to meet all eligibility requirements throughout the period. The ruling terminates immediately if you change employers without transferring the ruling or if your salary drops below the minimum threshold.
What is the salary cap for the 30% ruling in 2026?
As of 1 January 2026, the maximum salary eligible for the 30% ruling is €262,000 per year — the so-called Balkenende norm (public sector executive salary cap). Salary above this amount is not eligible for the tax-free allowance. This means the maximum possible tax-free allowance in 2026 is €78,600 (30% × €262,000), regardless of how much higher the actual salary is. For employees earning above €262,000, only the first €262,000 benefits from the ruling. The cap is adjusted periodically in line with the public sector pay ceiling.