Last updated: July 2026
For companies hiring international talent in the Netherlands, the 30% ruling has long been one of the most powerful tools in the compensation package. It allows employers to pay part of a knowledge migrant’s salary tax-free — a significant boost to take-home pay that makes the Netherlands genuinely competitive for global talent.
But the scheme has changed considerably since 2019. If you’re hiring knowledge migrants now — or planning to — here’s what you need to know.
What is the 30% ruling?
The 30% ruling (officially the expat facility or expatregeling) lets employers pay up to 30% of a qualifying employee’s gross salary tax-free. This compensates for the so-called extraterritorial costs of working in the Netherlands: higher living costs, international schooling, trips home, and more.
To qualify, an employee must:
- be recruited from abroad (or posted to the Netherlands from another country);
- have lived more than 150 km from the Dutch border for at least 16 of the 24 months before their first Dutch working day;
- hold specific expertise, demonstrated by meeting the minimum salary threshold;
- have a Dutch employment contract.
The ruling applies for a maximum of five years.
What has changed since 2019?
1. Duration cut from eight to five years (2019)
Before 2019, the ruling could be applied for up to eight years. From 1 January 2019, that was reduced to five years — including for many existing beneficiaries, subject to transitional arrangements.
This remains the current maximum duration.
2. Rising salary thresholds (ongoing)
To qualify, an employee’s taxable salary — after applying the 30% allowance — must exceed a minimum threshold. That threshold is indexed annually and has risen steadily.
The confirmed figures for 2026 are:
| Category | Annual gross minimum |
|---|---|
| Standard (aged 30+) | €48,013 |
| Under 30 with a qualifying master’s degree | €36,497 |
From 2027, these thresholds will increase further — to approximately €50,436 (standard) and €38,388 (under 30 with master’s) — in line with the reduction to 27%.
The master’s degree must be verified by IDW (the Dutch international credential evaluation body) or pre-approved by the Dutch Tax Authorities.
3. Salary cap introduced (2024)
Since 1 January 2024, the 30% ruling can only be applied up to a maximum salary level, tied to the Dutch public sector cap (WNT-norm or Balkenende norm). Any salary above this cap is taxed in full.
The cap in 2026 is €262,000 gross annually (up from €246,000 in 2025).
Employees who were already using the 30% ruling in December 2022 were given a transitional period; the cap applies to all beneficiaries from 2026 onwards.
4. The phased reduction that never was (2024 → reversed)
In 2024, a tiered reduction (30% → 20% → 10% over the five-year period) was briefly introduced. This system was subsequently withdrawn due to its complexity and limited effectiveness, and a flat rate was reinstated. Many employees caught by the original reduction received transitional protection.
5. Abolition of partial non-resident tax status (2025)
This is one of the most impactful changes for expats with assets abroad.
Until 2024, employees using the 30% ruling could opt for partial non-resident status, meaning they were not taxed in the Netherlands on foreign Box 2 (substantial interest) and Box 3 (savings and investments) income. In practice, many expats paid no Dutch tax on foreign investment portfolios or shareholdings during their ruling period.
That option was abolished as of 1 January 2025 for all new cases.
A transitional arrangement applies: employees who had the 30% ruling in the final payroll period of 2023 could still use partial non-resident status in 2025, and 2026 is the final year this transitional option remains available. From 2027, it is gone entirely.
6. Reduction from 30% to 27% from 2027
From 1 January 2027, the ruling will become a 27% facility. The higher salary thresholds (see above) will apply at the same time.
The rules on who keeps 30% and who moves to 27% depend on when the ruling was first applied:
- Employees who started using the ruling before 1 January 2024 retain the 30% rate for the remainder of their five-year period under transitional provisions.
- Employees who started in 2024, 2025, or 2026 will move to 27% from 2027 onwards, for the remaining years of their ruling.
What does this mean in practice?
For knowledge migrants joining a Dutch employer now, the ruling still offers a meaningful tax advantage — particularly for salaries in the €50,000–€150,000 range. But the overall trend is clear: the scheme is becoming shorter, stricter, and less generous.
For employers, this means:
- Higher salary thresholds to qualify
- A salary cap above which the benefit no longer applies
- More complex payroll administration when employees fall under different regimes
For knowledge migrants, it means:
- No more tax shelter on foreign assets from day one
- A reduction in the tax-free allowance from 2027
- The importance of applying on time — late applications now only take effect from the following month, not retroactively from the start date
Not a recognised sponsor? You can still offer the 30% ruling
Companies that don’t hold their own IND recognised sponsor licence can still hire knowledge migrants — and offer them the 30% ruling — through a payrolling partner that acts as the recognised sponsor. The employee is placed on the payroll of the sponsor, who handles IND compliance, salary administration, and the ruling application on your behalf.
Considering hiring a knowledge migrant in the Netherlands? Get in touch to find out how we can arrange sponsorship and payrolling — without you needing your own IND licence.
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