30% ruling changes update

Initially, it was planned that, starting from January 1, 2024, the current 30% ruling would be replaced by a tiered 30-20-10% system. However, this proposal will now be reversed through an amendment to the 2025 Tax Plan, even before its implementation.
New 27% Ruling and Salary Norm Increase
From January 1, 2027, the maximum percentage of an employee’s salary that can be paid tax-free under the new ruling will be reduced to 27% for the total duration of 60 months. Alongside this reduction, the salary thresholds will be adjusted. The salary norm for employees will increase from €46,107 to €50,436 (based on 2024 figures and subject to annual indexation). For employees under the age of 30 who hold a master’s degree, the salary threshold will rise from €35,048 to €38,338 (also based on 2024 figures and subject to annual indexation).
Employees who are already benefiting from the 30% ruling as of December 2023 will continue to do so under the current rules for the entire five-year period. They will not be affected by the increased salary norms. However, transitional rules will not apply if the 30% ruling is terminated and reinstated after January 1, 2024.
Abolition of Partial Foreign Taxpayer Status
Currently, employees residing in the Netherlands and benefiting from the 30% ruling can choose to be classified as “partial non-resident”.
This classification exempts them from being taxed on Box 2 income (income from substantial interest in a non-Dutch entity) and Box 3 income (income from savings and investments). This option will be abolished as of January 1, 2025. Employees who were already under the 30% ruling by the end of 2023 will still benefit from the partial non-resident status until the 2026 income tax return (to be filed in early 2027).
Cap on the 30% Ruling
Effective January 1, 2024, the 30% ruling no longer applies to salaries exceeding the public sector pay cap, which is set at €233,000 for 2024. For employees who were already benefiting from the 30% ruling as of December 2022, this pay cap will take effect from January 1, 2026.
Choice Between 30% Ruling and Reimbursement of Actual Expenses
As of January 1, 2023, employers have the option each year to either apply the 30% ruling or reimburse actual extraterritorial expenses incurred by the employee on a claim basis. This flexibility allows employers to choose the most beneficial arrangement for their employees based on individual circumstances.
If you have any questions about this update, please reach out to us.
Frequently Asked Questions
The 30% ruling is a tax advantage for highly skilled migrants moving to the Netherlands for work. Under this rule, employers can offer up to 30% of a migrant's salary tax-free, depending on the salary. The remaining 70% is subject to normal tax rates. This benefit is designed to cover the extra costs associated with relocating to the Netherlands. This benefit applies to the salary above €46.000. Under this threshold, the salary is taxed normally.
There are strict requirements to apply for the 30% Ruling which Employor can inform you of. More information is available on the website of the Dutch Tax Authority, accessible via this link.
To qualify, the employee must meet specific criteria set by the Dutch tax authorities. The salary must be high enough to surpass the threshold of €46.000, and they must have lived more than 150 kilometers from the Dutch border before employment.
The ruling can be granted for a maximum of five years, providing substantial tax relief and making the Netherlands an attractive destination for international talent. Read more about further limitations on the 30% ruling.
Yes, there have been recent changes to the 30% ruling in the Netherlands that came into effect on January 1, 2024:
- Gradual Reduction in Tax-Free Allowance: The allowance will now decrease over time. For the first 20 months, the allowance remains at 30%. It then drops to 20% for the next 20 months, and further reduces to 10% for the final 20 months. This step-by-step reduction spreads across a total duration of 60 months (5 years). This only applies to new benefactors of the ruling. It doesn’t apply to employees that already received the 30% allowance before December 2023.
- Cap on High Incomes: The 30% ruling now applies only up to a maximum salary limit which is aligned with the "Standard for Remuneration Act" (Wet Normering Topinkomens). For 2024, this cap is set at €233,000.
- Abolition of Partial Foreign Tax Liability: Starting from January 1, 2025, the partial foreign tax liability will be abolished. This currently allows expats to opt for a status that exempts them from tax on foreign investments, substantial interest and savings (Box 2 and Box 3 income). A transitional law will permit those already using the ruling to continue applying this partial foreign tax status until January 1st, 2027.
- Increased Salary Requirement: The minimum salary requirement to qualify for the 30% ruling has also increased significantly, up by 9.9% from 2023 to 2024, reflecting the inflation rate and changes in the job market conditions for skilled migrants.