The 30% ruling becomes 27% in 2027: how employers should budget for the change

Hiring international talent in the Netherlands stays attractive. However, the rules behind the expat tax scheme are shifting. From 2027, the well-known 30 percent ruling becomes the 27 percent ruling. Therefore, employers need to plan ahead. This guide explains the change clearly, so you can budget with confidence and keep moving talent into the country.

What is the 30 percent ruling, and what is changing in 2027?

The 30 percent ruling is a Dutch tax facility for incoming skilled workers from abroad. It lets employers pay part of the salary tax-free to cover relocation costs. From 1 January 2027, that tax-free share drops from 30% to 27%. As a result, the scheme is renamed the 27 percent ruling. The change applies for the full term of up to 60 months.

Why is the 30 percent ruling becoming the 27 percent ruling?

The Dutch government wanted to cut the cost of the scheme, yet keep it competitive. An earlier plan proposed a steep 30-20-10 scale-down. However, lawmakers scrapped that idea because it created too much uncertainty. Instead, the 2025 Tax Plan introduced a single, flat reduction to 27%. Therefore, the expat tax ruling change 2027 is simpler and more predictable than the original proposal.

How much will the 27% ruling cost employers?

The 27 percent ruling raises the 30 ruling employer cost in two ways. First, a smaller part of the salary becomes tax-free. Second, the minimum salary thresholds rise. Consequently, a larger share of pay becomes taxable. The table below shows the headline numbers that drive your budget from 2027.

Element	Until end of 2026	From 1 January 2027
Tax-free allowance	30%	27%
General salary threshold	€46,107 (2024 base, indexed yearly)	€50,436
Reduced threshold (under 30 with a master’s)	€35,048 (2024 base, indexed yearly)	€38,338

The three-point cut sounds small. Yet it changes net pay for the employee and total cost for the employer. If you gross up salaries to protect take-home pay, your wage bill rises. Therefore, model both scenarios early. For a tailored cost calculation, Octagon’s consultancy team can provide expert support.

How does the 27 percent ruling affect employee net pay?

A smaller tax-free share means more taxable salary. Therefore, an employee on the 27 percent ruling keeps slightly less net pay, if gross salary stays the same. The exact impact depends on income and tax bracket. Many employers adjust gross pay to protect take-home value. However, that choice raises the 30 ruling employer cost again.

Communication matters here. Expats often plan their relocation around net income, not gross figures. So share clear numbers early and explain the expat tax ruling change 2027 in plain terms. Honest, timely figures help you retain talent through the transition. In turn, your offers stay credible and your pipeline of international hires stays strong.

Who still qualifies for the full 30 percent rate after 2027?

Transitional rules protect many current users. Employees who already applied the 30 percent ruling before 2024 keep the 30% rate. The higher salary thresholds also do not apply to them. In short, the change targets new arrivals, not the existing population. Because the rules differ per start date, always confirm each employee’s position before you finalise budgets.

How should employers budget for the expat tax ruling change 2027?

Start with a simple audit of your expat population. Identify who falls under the 27 percent ruling and who keeps the old 30% rate. Then forecast the extra cost and decide your compensation policy. The steps below keep the planning practical and clear.

• Map your population. List every employee on the scheme and their start year.
• Split the groups. Separate grandfathered 30% users from those moving to 27%.
• Check the thresholds. Confirm each salary meets the 2027 norm of €50,436 or €38,338.
• Model the gap. Compare net pay under 30% and 27%, then cost any gross-up.
• Update offers. Reflect the new rate in budgets for 2027 hires and renewals.

Good data makes this easy. Poor data creates compliance risk and surprise costs. Therefore, build the review into your 2026 planning cycle, well before the rules take effect. Budget owners should also brief finance and HR together, because the expat tax ruling change 2027 touches both teams. With one shared plan, you avoid duplicated work and last-minute corrections.

Frequently asked questions

Is the 30 percent ruling ending in the Netherlands?

No, the scheme continues. The government decided to keep the facility rather than abolish it. From 2027, the tax-free allowance simply falls from 30% to 27%. The 30% ruling stays available for skilled workers from abroad, only with a slightly lower benefit and higher salary requirements.

When does the 30 percent ruling change to 27%?

The reduction takes effect on 1 January 2027. During 2025 and 2026, the full 30% allowance still applies to eligible employees. From 2027, the 27 percent ruling applies for the remaining term of the scheme, up to a maximum of 60 months in total.

Does the 27 percent ruling apply to employees already using the 30% ruling?

Not always. Employees who already used the 30% ruling before 2024 fall under transitional rules. They keep the 30% rate and the earlier salary thresholds. The lower 27% rate mainly affects newer and future users, so each employee’s start date matters for your planning.

What is the minimum salary for the 30% ruling in 2027?

From 2027, the general salary threshold rises to €50,436. For employees under 30 with an academic master’s degree, the reduced threshold is €38,338. Both figures are indexed each year. Salaries below these levels do not qualify, so review pay before you apply.

Plan the change with a partner who moves talent across borders

The shift to the 27 percent ruling is manageable with the right preparation. It mainly affects cost forecasting and salary thresholds, not your ability to hire. Octagon Professionals International helps companies move talent into the Netherlands with full compliance and transparency. We reduce the risk of misapplied thresholds, incorrect payroll, and missed transitional rules. Meanwhile, you keep complete control over salary, benefits, and working arrangements. With 38+ years of experience as a recognised IND sponsor, Octagon turns rule changes into routine.