The complete guide to the 30% ruling Netherlands in 2026

The 30% ruling Netherlands is one of the most valuable tax incentives available to highly skilled migrants and the employers who hire them. It allows qualifying foreign employees to receive up to 30% of their gross salary entirely tax-free. In 2026, significant changes have taken effect. Therefore, every employer and expatriate who benefits from this scheme needs an up-to-date understanding. This guide covers the latest salary thresholds, eligibility criteria, application steps, and the upcoming 2027 reduction. Whether you hire internationally or plan to work in the Netherlands, this is the only resource you need on the 30 ruling Netherlands.

What is the 30% ruling in the Netherlands?

The 30% ruling Netherlands, also called the 30 facility, the expat scheme, or the 30% regeling, is a tax benefit that allows employers to pay up to 30% of a qualifying foreign employee’s gross salary free of Dutch income tax. The Dutch government introduced it to attract highly skilled migrants with scarce expertise to work in the Netherlands. In 2026, the maximum tax-free allowance under this scheme reaches €78,600 per year.

The scheme compensates expatriates for what Dutch tax law calls “extraterritorial costs.” These are the genuine extra expenses that come with relocating from a home country to work in the Netherlands. Examples include higher housing costs, international travel, and the costs of building a new life abroad. Instead of requiring employees to track and submit every receipt, the Dutch Tax Administration (Belastingdienst) permits a fixed 30% of salary to serve as a flat-rate reimbursement.

The ruling is formally named the “30% facility” in Dutch law. However, common variants such as the Dutch 30 ruling, the 30 ruling Holland, and the 30 facility all refer to the exact same arrangement. The official Dutch government business portal, Business.gov.nl, provides the authoritative reference for employers applying for the ruling on behalf of their international staff.

Who qualifies for the 30% ruling in 2026?

To qualify for the 30% ruling Netherlands in 2026, a foreign employee must satisfy four core criteria: recruitment from abroad, the 150km distance rule, a minimum taxable salary of €48,013, and salaried employment with a Dutch payroll-registered employer. The table below summarises all eligibility criteria for the 30% ruling in 2026.

The 150km distance rule explained

The 150km distance rule is one of the most specific requirements of the 30% ruling Netherlands. The employee must have resided more than 150 kilometres from the Dutch border, measured as the crow flies, for more than 16 months within the 24-month period before their first working day in the Netherlands.

This condition effectively excludes residents of Belgium, Luxembourg, and large parts of Germany, France, and the United Kingdom. Many border-region applicants find they are ineligible, even if they have never previously worked in the Netherlands.

There are specific exceptions to the standard rule. A PhD graduate who completes their degree in the Netherlands can still qualify, provided they start new employment within one year of graduation. Furthermore, employees returning to work in the Netherlands after at least 25 years of absence may regain full eligibility. In those cases, the previous period of residence is disregarded entirely.

The Dutch Tax Administration sets out all distance rule conditions in the official wage tax manual (Handboek Loonheffingen, chapter 19.4.1).

Scientific researchers and the 30% facility

Employees who carry out scientific research at designated Dutch research universities and institutes are always eligible for the 30% ruling Netherlands. For these employees, there is no minimum salary requirement at all. Doctors in specialist training (known as AIOS in Dutch) qualify under the same exemption.

As a result, an early-career researcher on a lower salary can still access the full income tax benefit. The key requirement is that their employer holds a valid Dutch payroll registration and that the institution has been designated for this purpose by the Dutch government.

What are the 2026 salary thresholds for the 30% facility?

In 2026, the standard minimum taxable salary for the 30% ruling Netherlands is €48,013 per year. For employees under 30 with a qualifying master’s degree, the threshold is €36,497. These figures represent the salary after the 30% deduction. The WNT income cap, which limits the maximum eligible salary, is €262,000 in 2026. Therefore, the maximum tax-free allowance is €78,600 per year.

The table below shows confirmed and indicative salary thresholds across recent years, as reported by the Dutch Tax Administration.

The taxable salary thresholds apply on a continuous basis. The threshold must be met throughout the full five-year duration of the ruling. Both the salary norm and the income cap apply on a pro-rata basis in part-year situations, as confirmed by the Leiden International Centre.

The WNT cap follows the Standard for Remuneration Act (Wet Normering Topinkomens), which sets the ceiling for top salaries in Dutch public and semi-public institutions. The government adjusts this figure annually. Any portion of salary exceeding €262,000 in 2026 is subject to standard Dutch income tax rates, regardless of whether the employee holds an active 30% ruling decision.

How does the 30% ruling benefit you financially?

The 30% ruling removes 30% of your gross salary from taxable income entirely. For a qualifying employee earning €80,000 per year, this means €24,000 is free of Dutch income tax. The ruling therefore generates a direct, recurring net salary increase on every working day, without any change to the gross package agreed with the employer.

To understand the size of the saving, it helps to know the Dutch income tax structure for 2026. The Netherlands uses a three-bracket Box 1 system for employment income, as confirmed by Business.gov.nl:

These rates include both income tax and national social insurance contributions (volksverzekeringen) for employees below state pension age. Therefore, the 30% ruling saves the most for employees whose salary sits in the second or third bracket, which applies to most highly skilled migrants qualifying for the scheme.

How do you apply for the 30% ruling in the Netherlands?

The employer files the 30% ruling application to the Dutch Tax Administration on behalf of the employee. Both parties must agree in writing and sign the application. Employers must submit the application within four months of the employee’s first working day in the Netherlands. The Tax Authority typically issues a decision within eight weeks. A late application means the benefit starts from the first day of the month following submission, a potentially costly delay.

Step-by-step: how to apply for the 30% ruling in 2026

Step 1 – Confirm eligibility. Before submitting documents, verify that all criteria are met. Confirm the taxable salary exceeds €48,013, check the 150km distance rule is satisfied, and confirm the employee is recruited from abroad.

Step 2 – Gather the required documents. The application typically requires the following: a signed employment contract showing salary, role, and start date; a valid passport or national identity document; proof of prior address in the home country (for example, a rental agreement, utility bills, or bank statements from the home country); and proof of qualifications if applying under the under-30 reduced threshold. All documents should be in Dutch or English, or accompanied by a certified translation.

Step 3 – Submit the joint application. The employer submits the application form to the Belastingdienst. Both the employer and the employee must sign. The application form is available on the Dutch Tax Administration’s official website.

Step 4 – Receive the formal decision. The Tax Authority issues a formal decision, called a beschikking, which confirms the start and end date of the ruling. The employer then applies the 30% deduction through the regular payroll process from the date stated in that decision.

Step 5 – Apply the ruling each payroll period. Once the decision is in place, the employer applies the ruling with every salary payment. The 30% tax-free portion appears on the employee’s payslip each working day. The employee receives a higher net salary throughout the duration of the ruling.

How long does the 30% ruling last?

The 30% ruling in the Netherlands lasts for a maximum of five years. The five-year period starts from the first working day in the Netherlands as stated in the Tax Authority’s decision. Any prior periods of employment or residence in the Netherlands within the last 25 years reduce the available duration. The ruling can carry over to a new employer, provided the employment gap stays below three months.

Historically, the ruling lasted 10 years before 2012, then 8 years from 2012 to 2018. The Dutch government reduced the duration to five years for all new applicants from 2019 onwards. This change affected all applications made after 1 January 2019, as confirmed on Government.nl.

The five-year clock also accounts for previous stays in the Netherlands. For example, an employee who previously lived in the Netherlands for seven months will have their ruling duration reduced by those seven months. Consequently, effective planning from the first working day in the Netherlands is essential. Employers and employees should confirm the exact end date from the official decision letter.

One exception applies: periods spent in the Netherlands more than 25 years before the start of the current employment are disregarded. Therefore, an expat who lived in the Netherlands two decades ago may still qualify for a full five-year period.

What are the key changes to the 30% ruling in 2026?

Three significant changes affect the 30% ruling in 2026. Firstly, the WNT income cap of €262,000 now applies universally, as all transitional arrangements expired on 31 December 2025. Secondly, the partial non-resident tax status was abolished from 1 January 2025, with limited transitional provisions expiring at the end of 2026. Finally, the Extraterritorial Cost (ETK) scheme has been narrowed; in particular, it now excludes utilities from tax-free reimbursement for incoming workers.

The WNT income cap now applies to all employees

As of 1 January 2026, the WNT income cap applies to every employee using the 30% ruling, including those who first received the ruling before 2023. Previously, employees who started before 1 January 2023 benefited from a transitional arrangement that delayed the cap. That transitional protection expired on 31 December 2025.

Therefore, from 2026 onwards, all 30% ruling holders can only apply the tax-free allowance to salary up to €262,000. Any salary above this ceiling is fully taxable at the standard Dutch income tax rates. This change is highlighted by the Leiden International Centre as a key compliance priority for employers in 2026.

Employers with high-earning expat employees should review their payroll configurations immediately. Any employee earning above €262,000 gross now has their 30% ruling limited to a maximum tax-free allowance of €78,600, regardless of their total salary.

Partial non-resident tax status abolished

Previously, employees with the 30% ruling could elect for partial non-resident taxpayer status. Under this arrangement, they paid no Dutch tax on their Box 2 income (substantial interest in companies abroad) and Box 3 income (savings and investments held outside the Netherlands). The Dutch government abolished this option from 1 January 2025.

A transitional arrangement still applies for those who used the ruling before December 2023. Those employees can retain partial non-resident status in their income tax returns through the end of 2026. From 2027 onwards, all 30% ruling holders pay the same Box 2 and Box 3 taxes as regular Dutch residents. This change is confirmed on Government.nl.

In practice, this means that expats with significant foreign savings, investments, or company shareholdings now face Dutch wealth tax for the first time. Financial and tax planning becomes considerably more important for high-net-worth expatriates from 2025 onwards.

ETK scheme changes in 2026

The Extraterritorial Costs (ETK) scheme is an alternative to the 30% ruling. It allows employers to reimburse actual extraterritorial costs tax-free instead of using the flat-rate percentage. From 1 January 2026, the Dutch government narrowed this scheme for incoming workers. Two specific cost categories can no longer be reimbursed tax-free under the ETK route: extra cost of living (including gas, water, and electricity) and private telephone call costs.

Employers who use the ETK scheme for employees who do not qualify for the 30% ruling should review and update their expense reimbursement policies. Continuing to reimburse excluded costs on a tax-free basis from 2026 would constitute a compliance error. This change was confirmed during Prinsjesdag 2025 as part of the Dutch Tax Plan 2026.

What is changing about the 30% ruling from 2027 onwards?

From 1 January 2027, the maximum tax-free percentage under the 30% ruling reduces from 30% to 27%. This change applies to all employees whose ruling started on or after 1 January 2024. Employees who started using the ruling before 2024 retain the full 30% rate throughout their five-year period under transitional law. The Dutch government confirmed this reduction during Prinsjesdag 2025, as detailed on Business.gov.nl.

The political history of this change is worth understanding. In the 2024 Tax Plan, the Dutch government initially proposed a phased reduction structured as 30-20-10% over five years. This plan faced intense opposition from international businesses, the expat community, and organisations such as the Amsterdam metropolitan business community. The Dutch government subsequently reversed the phased reduction. The final compromise is a single step-down from 30% to 27%, effective from 2027 for new rulings.

Furthermore, salary thresholds will increase again from 1 January 2027. The specific figures are not yet confirmed, but employers who plan to hire international staff in late 2026 and 2027 should allow for higher minimum salary requirements when structuring compensation packages.

For employees already on a 30% ruling that started before 2024, there is a clear advantage. Their ruling retains the full 30% rate for its entire duration. Employers should clearly communicate this distinction to affected staff, as it directly impacts the perceived value of existing compensation packages.

Does the 30% ruling affect your average pay in the Netherlands?

Yes. The 30% ruling substantially raises the net pay of qualifying foreign employees. For example, an expat earning €80,000 gross per year receives a tax-free allowance of €24,000. This means they pay income tax only on the remaining €56,000. Compared to a local employee on the same gross salary, who pays tax on the full €80,000, the saving is approximately €9,000 to €9,500 per year before individual tax credits.

To put this in context: Statistics Netherlands (CBS) and the Centraal Planbureau (CPB) report the average gross salary in the Netherlands in 2026 at approximately €48,000 per year. The average pay Netherlands is also expressed as approximately €3,900 per month gross. For most highly skilled migrants in Amsterdam and other Dutch cities, their gross salary already exceeds this average. The 30% ruling then significantly widens the gap between their gross and net earnings.

For hiring managers and HR teams, it is therefore important to present total compensation packages to expatriate candidates as net figures. Showing the gross salary alone understates the real value of working in the Netherlands with the 30 facility active.

Can you lose the 30% ruling?

A qualifying employee can lose the 30% ruling if their taxable salary falls below the annual minimum threshold, if employment with the Dutch employer named in the ruling decision ends, or if they remain out of the Dutch labour market for more than three months between employers. Because the salary threshold applies continuously, employers must review salary levels each year and flag any risk well in advance.

The salary requirement is a continuous condition, not just an entry test. If an employee’s salary in any year falls below €48,013 (the 2026 threshold), the ruling lapses from that payroll period. This can happen due to salary reductions, reduced hours, or changes in benefit structures. Employers therefore need robust internal processes to monitor this condition.

As highlighted by CROP Accountants, employers should proactively identify which employees sit just above the current minimum threshold. A salary restructuring exercise, a parental leave period, or an unpaid absence could inadvertently drop an employee below the required level. Early identification allows time for a suitable salary adjustment before the ruling is lost.

In addition, the ruling is employer-specific. It covers only the wages paid by the employer named in the decision. Therefore, if an employee takes a second job with a different employer, the ruling applies only to the income from the named employer. A new application is required with each new employer.

The 30% ruling and netherlands work visas: what employers need to know

The 30% ruling and the Netherlands work permit visa system work closely together. According to this, highly skilled migrants who come to work in the Netherlands under a Dutch work visa or Netherlands work permit visa must satisfy the IND salary thresholds for their Highly Skilled Migrant (HSM) status. However, these thresholds differ from the 30% ruling thresholds and are set annually by the Immigration and Naturalisation Service (IND).

Many highly skilled migrants who qualify for a netherlands work permit also qualify for the 30% ruling, but the two applications are separate processes. The IND manages the work visa Netherlands process. The Belastingdienst manages the 30% ruling application. Employers must submit both applications independently and meet the requirements of each.

For expatriates in Amsterdam, the link between the 30% ruling and IND status is also relevant from a practical standpoint. A valid 30% ruling decision serves as independent evidence of specific expertise and scarce skills. This gives candidates added credibility with housing providers, financial institutions, and other parties that assess an expatriate’s standing in the Netherlands.

How does Octagon support the 30% ruling and international hiring?

Overall, Octagon Professionals International administers the 30% ruling as part of its broader HR services. In addition, as a recognised IND sponsor, Octagon handles work visa Netherlands applications, 30% ruling submissions, and payroll compliance for international hires across the Netherlands and Europe. Moreover, for businesses that want to work in the Netherlands without establishing a Dutch entity, Octagon acts as the legal employer.

Furthermore, with 38 years of experience in international HR and a multilingual team of 20+ nationalities, Octagon understands the full complexity of relocating skilled professionals to the Netherlands. Whether companies are hiring their first employee in the Netherlands or growing an expatriate team in Amsterdam, Octagon provides end-to-end support across every stage of the employment lifecycle.

In addition, Octagon’s HR consultancy team provides tailored advice on compensation structuring for internationally mobile employees. For businesses offering a dutch work visa or netherlands work permit visa role to a candidate from outside the EU, Octagon manages the IND application and the 30% ruling submission in parallel, reducing the time between offer acceptance and the employee’s first working day in the Netherlands.

The core message is this: Octagon exists to empower companies to grow. We reduce the compliance risk of international hiring, remove the administrative burden, and ensure full transparency, while the client retains complete control over salary, benefits, and working arrangements. We handle the complexity so you can focus on your business.

Frequently asked questions about the 30% ruling Netherlands

What is the 30% ruling in the Netherlands and who is it for?

The 30% ruling Netherlands is a tax facility that allows Dutch employers to pay up to 30% of a qualifying foreign employee’s gross salary as a tax-free allowance. It is designed for highly skilled migrants with expertise that is scarce in the Dutch labour market. In 2026, the maximum tax-free allowance is €78,600 per year, based on the €262,000 WNT income cap.

How do I apply for the 30% ruling in the Netherlands?

The employer and employee submit a joint application to the Dutch Tax Administration (Belastingdienst). Submit within four months of the employee’s first working day. Include the employment contract, proof of foreign residence, and qualification documents. The Tax Authority issues a formal decision within eight weeks. A late submission means the benefit starts from the first day of the month after submission.

What are the 2026 salary requirements for the 30% ruling?

In 2026, the minimum taxable salary is €48,013 per year for standard applicants and €36,497 for employees under 30 with a qualifying master’s degree. These figures apply after the 30% deduction. The income cap is €262,000. Employees conducting scientific research at designated Dutch institutions are exempt from the salary threshold.

Does the 30% ruling change in 2027?

Yes. From 1 January 2027, the tax-free percentage reduces from 30% to 27% for employees whose ruling started on or after 1 January 2024. Employees with rulings that started before 2024 retain the full 30% rate for their entire five-year period under transitional law. Salary thresholds will also increase further from 2027.

Can I keep the 30% ruling when I change jobs in the Netherlands?

Yes, with a new application. The new employer must apply to the Dutch Tax Administration within four months of the new start date. The remaining duration of the ruling transfers from the previous employer, provided the gap between the two jobs stays below three months. The benefit applies from the start date of the new employment following approval.

External authoritative sources referenced in this article:

• Dutch Tax Administration (Belastingdienst) — 30% facility conditions
• Business.gov.nl — Dutch government business portal
• Government.nl — Dutch government income tax guidance
• CBS (Statistics Netherlands) — Labour and income data
• CPB Netherlands Bureau for Economic Policy Analysis — salary statistics
• IND (Immigration and Naturalisation Service) — Highly Skilled Migrant visa
• Leiden International Centre — immigration and 30% ruling updates
• CROP Accountants — 30% ruling salary