The 30% ruling (30%-regeling) is a tax advantage for employees recruited from abroad who bring specific skills to the Dutch labor market. In short: it allows an employer to pay up to 30% of an employee’s gross salary as a tax-free allowance. This is intended to cover extraterritorial costs (extraterritoriale kosten)—the extra expenses incurred by moving to and living in the Netherlands.

In Short

• The Benefit: A portion of the salary is paid tax-free, significantly increasing the employee’s net take-home pay.
• The Logic: It replaces the need to prove individual expenses for international relocation and double housing.
• The Context: The rules around percentages and thresholds are subject to yearly updates, the core requirement of specific expertise remains the foundation.

How does the 30% ruling work?

The ruling is intended as a cost-reimbursement. Instead of the employee paying tax on their full gross salary, the employer and employee agree to designate a part of that salary (up to 30%) as a reimbursement for costs.

Because this is a reimbursement, no income tax or social security contributions are withheld from that specific portion. For the employer, this makes the Netherlands a much more attractive destination for high-tier talent without increasing the total labor cost.

What are the main requirements?

To qualify, several hard criteria must be met before the Tax Office (Belastingdienst) issues a formal granting decision (beschikking):

1. Recruited from abroad: The employee must have lived more than 150km from the Dutch border for at least 16 of the 24 months prior to their start date. This also excludes certain employees coming in from Germany, France and Belgium.
2. Employment contract: There must be a Dutch employment relationship and a signed addendum to the contract.
3. Specific Expertise (The Salary Norm): The employee must earn above a specific taxable salary threshold.

Understanding the Salary Threshold

This is often where confusion happens. The threshold (e.g., €48,013 in 2026) is the amount that must remain taxable.

• If an employee earns €60,000 gross, you cannot deduct a full 30%, because the remaining taxable salary would drop below the €48,013 limit.

What happens if I miss the 30% ruling application deadline?

Timing is everything. You must submit the application within 4 months of the employee’s start date.

• If you are on time: The ruling applies retroactively from day one.
• If you are late: The ruling only starts from the first day of the month following the application month. You lose the tax benefit for the initial months forever.

The Echo People Pro Tip

Remember that the 30% ruling is not all or nothing. If a high-potential employee’s salary is just slightly too low to allow a full 30% tax-free allowance, you can lower the percentage. By applying, for example, 15% or 20% tax-free, you ensure the taxable wage stays exactly at the 2026 threshold (€48,013). This allows you to keep applying the 30% ruling.

Want to read more about the 30% ruling?

• 30% Ruling Income Threshold 2026
• How to apply for a 30% ruling with the Tax Authority
• How to add the 30% ruling to your Dutch Payroll?
• Switching Jobs with the 30% Ruling
• Future Changes to the 30% ruling

Let’s secure your 30% ruling together

The 30% ruling is a powerful recruitment tool, but the burden of proof  lies with the employer. If the 30% ruling has been incorrectly applied, you risk significant back-taxes and fines.

Want to check if your new hire qualifies or need help with the application? Let’s get in touch!