As an international professional moving to the Netherlands, you will encounter a complex interplay between tax benefits and pension accrual. While the 30% ruling offers attractive tax advantages, it also has direct consequences for your Dutch pension. This guide helps you understand how both systems interact and how you can optimize your pension accrual.
For international employees, it is crucial to understand that pension planning in the Netherlands extends beyond just the employee pension. The Dutch pension system consists of three pillars, and the 30% ruling affects each of these pillars in different ways. A thorough analysis of this interaction is essential for successful financial planning.
What exactly is the 30% ruling?
The 30% ruling is a tax benefit that the Netherlands offers to highly educated international employees with specific expertise. Under this ruling, 30% of your gross salary is exempt from taxation, which means you only pay Dutch income tax on 70% of your salary.
To qualify for the 30% ruling, you must meet various conditions:
- You must have been recruited from abroad
- You must have lived more than 150 kilometers from the Dutch border for at least 16 months in the 24 months before your first working day
- Your salary must exceed the threshold (€46,660 in 2025, or €35,468 for persons under 30 with a master’s degree)
- You must have specific expertise that is scarce in the Dutch labor market
From 2025, there is a maximum salary of €246,000 to which the 30% ruling can be applied. This means the maximum tax-free allowance is €73,800 per year.
How does pension accrual work in the Netherlands?
The Dutch pension system consists of three pillars that together provide your pension income. For expats, it is important to understand how each of these pillars functions:
First pillar: AOW (General Old Age Pensions Act)
This is the supplementary pension that you accrue through your employer. Most employers in the Netherlands have a pension scheme where both employer and employee pay premiums. These premiums are calculated based on your pension base.
Third pillar: Personal pension accrual
Some pension schemes calculate premiums based on taxable salary (70% of your gross salary with the 30% ruling). This results in lower pension premiums and thus lower pension accrual.
Method 2: Calculation based on full gross salary
Many expats focus only on the tax benefits and forget to check how their pension accrual is affected. Explicitly ask about the calculation method for your pension premiums.
Error 2: Not accounting for the end date of the ruling
Many expats forget to include their pension rights from their home country in their planning. Research possibilities for pension transfer or consolidation.
Error 4: Not utilizing the third pillar
Negotiate with your employer about pension arrangements. Ask whether pension premiums can be calculated based on your full gross salary instead of only the taxable portion.
Strategy 2: Invest tax advantage
Research possibilities to transfer pension rights from your home country to Dutch schemes. This can strengthen your total pension accrual.
Strategy 4: Plan for after the 30% ruling
Prepare for the period after the 30% ruling expires. Your net salary will decrease, but your pension accrual may increase if it is calculated based on your full gross salary.
The combination of the 30% ruling and pension accrual requires a thoughtful approach. By understanding the various aspects well and taking timely action, you can both benefit from the tax advantages and ensure solid pension accrual. Consider seeking professional advice for a personal analysis of your situation, so you can make the best decisions for your financial future in the Netherlands.
