As an international professional moving to the Netherlands, the 30% ruling is probably one of the most valuable tax benefits you can utilize. This ruling can have a significant impact on your net salary and your total taxable income. Understanding exactly how this ruling works and how it affects your financial situation is crucial for making informed decisions about your career in the Netherlands.
In this article, we explain step by step how the 30% ruling affects your taxable income, from basic calculations to practical examples and common mistakes you can avoid when filing your Dutch tax return.
What exactly is the 30% ruling?
The 30% ruling, also known as the expat ruling, is a tax benefit introduced by the Dutch government to attract highly educated international employees. This ruling allows employers to pay up to 30% of your gross salary tax-free as compensation for extraterritorial costs.
In practice, this means that your taxable income is reduced from 100% to 70% of your gross salary. The tax-free portion of 30% is considered an untaxed allowance for the extra costs you incur as an international employee, such as:
- Moving costs and temporary accommodation
- Travel costs to your home country
- Costs for Dutch language courses
- Application costs for permits and documents
Important to know is that from 2025, a maximum untaxed allowance of €73,800 per year applies. This means you can only use the full 30% ruling on the first €246,000 of your gross salary.
How is your taxable income calculated?
The calculation of your taxable income under the 30% ruling is relatively simple, but it’s important to understand the steps properly.
Here is the step-by-step calculation:
- Determine your gross annual salary: This is your complete salary including holiday pay and any bonuses
- Calculate the tax-free portion: 30% of your gross salary (maximum €73,800 in 2025)
- Calculate your taxable income: 70% of your gross salary
- Apply the Dutch tax rates: Regular Dutch tax rates are applied to the taxable portion
A crucial factor is that social security premiums and pension premiums are usually calculated on the full gross salary, not just on the taxable portion. This has consequences for your future benefits and pension accrual.
Practical examples of salary impact
To clarify the impact of the 30% ruling on your net salary, let’s look at some concrete examples:
| Gross salary | Without 30% ruling | With 30% ruling | Difference per year |
|---|---|---|---|
| €60,000 | €42,500 net | €47,200 net | €4,700 benefit |
| €80,000 | €54,800 net | €61,600 net | €6,800 benefit |
| €100,000 | €66,200 net | €75,100 net | €8,900 benefit |
These examples show that the tax benefit can be substantial, especially with higher salaries. It’s important to remember that your employer is not obligated to pay the full 30% tax-free. Therefore, make clear agreements in advance about the percentage your employer will apply.
Common mistakes in tax returns
International employees regularly make mistakes when applying the 30% ruling in their tax returns. Here are the most common misunderstandings:
Assuming automatic application
Many expats think that the 30% ruling is applied automatically. In reality, you must submit an application to the Tax Authority together with your employer. Without approval, you cannot use the benefit.
Incorrect calculation of taxable income
A common mistake is incorrectly calculating which part of your salary is tax-free. Don’t forget that bonuses, holiday pay, and other allowances often fall under the ruling, but there is a maximum amount.
Ignoring box 2 and box 3 changes
From 2025, international employees can no longer choose partial non-resident status for box 2 and box 3. This means you pay the same tax as regular Dutch residents on wealth and shares.
Late application
If you submit an application within four months of your start date, the ruling applies retroactively. If you apply later, the ruling only applies from the first day of the month after approval.
To avoid these mistakes, it’s advisable to seek professional support from a Global Mobility Compliance Audit & Advisory service. We help international employees correctly apply the 30% ruling tax benefit and ensure all compliance aspects are guaranteed.
When does your 30% ruling benefit end?
The duration of your 30% ruling depends on when your application was approved. Since 2019, a maximum duration of five years applies to all new applications. For applications approved between 2012 and 2019, a maximum duration of eight years applies.
Conditions for termination
Your 30% ruling ends automatically when:
- The maximum duration is reached
- You leave the Netherlands for more than three months
- Your employment contract ends and you don’t find a new job within three months
- You no longer meet the salary requirements
Consequences after expiration
When your 30% ruling ends, your taxable income changes significantly. Your full gross salary is then taxed according to regular Dutch tax rates. This can result in a substantial increase in your tax assessment.
It’s wise to prepare for this change before the ruling ends. Consider:
- Recalculating your net salary
- Adjusting your financial planning
- Possibly conducting salary negotiations with your employer
The 30% ruling offers international employees a significant advantage when working in the Netherlands. By understanding well how this ruling affects your taxable income, you can optimally benefit from this tax advantage. Ensure you submit an application timely and correctly, avoid common mistakes in your tax return, and prepare for the period after the ruling expires. With the right knowledge and preparation, you can maximize the benefits of this valuable ruling during your time as an international professional in the Netherlands. For personalized guidance on your specific situation, feel free to contact our tax specialists.
