30% ruling for expats: current rules in 2026 and outlook for 2027

When you start working in the Netherlands as a foreign professional or if you bring international staff to the Netherlands, the 30% ruling (often also called the expat arrangement) is a crucial factor. This tax facility is designed to mitigate the extra costs of working outside the country of origin and to keep the Netherlands attractive for international talent.

The 30% ruling is a tax facility that allows employers to pay a maximum of 30% of the gross salary tax-free to their employees recruited from abroad. Instead of reimbursing the actual extraterritorial costs on a declaration basis, the employer may apply this fixed percentage, provided that the tax authorities have approved the application by decision.

Why is the 30% ruling in place?

The purpose of the expat scheme is to strengthen the Dutch knowledge economy by attracting employees with specific expertise that is scarce in the Dutch labor market. By offering this tax benefit, the Netherlands remains attractive and competitive for highly qualified professionals from around the world.

What are the conditions for the 30% ruling?

If you want to make use of the scheme in 2026, you must strictly meet the following requirements;

• Recruitment from abroad: The employee must be explicitly recruited from another country or sent to a Dutch withholding agent.
• The 150 kilometer limit: In the previous 24 months of employment, the employee must have lived more than 16 months at a distance of more than 150 kilometers from the Dutch border.
• Dutch withholding agent: The employer must be liable to withhold payroll tax in the Netherlands.
• The expertise requirement: This is assessed against a salary standard.

Salary standards of the 2026 30% ruling

The most important indicator of “specific expertise” is the taxable salary. The following standards have been set for the year 2026:

1. General salary standard: The taxable salary (the part of your salary on which you pay tax) must be at least €48,013 on an annual basis (standard amount 2026).
2. Young people with a master's degree: For employees under 30 with a qualifying (foreign) master's degree, a reduced standard of €36,497 (standard amount 2026) applies.
3. Scientific research: There is no minimum salary standard for employees who carry out scientific research at a designated institution or doctors in training as specialists.

Benefits of the 30% ruling?

Employee benefits:

For employees, the expat scheme provides immediate financial benefits: a substantially higher net salary without having to keep receipts for all kinds of extraterritorial costs. In addition, the costs for international schools for the employee's children can be reimbursed in addition to this flat-rate benefit.

In addition, the expat scheme makes it possible for highly skilled migrants to exchange their foreign driving license for a Dutch driving license without an exam, provided they meet the conditions, such as a valid 30% decision by the tax authorities, a valid foreign driving license issued before arrival in the Netherlands, and are registered in the BRP.

However, it is important to remember that the tax benefits in Boxes 2 and 3 (partial foreign tax liability) only apply through transitional law and that they will disappear for everyone by 2027.

Benefits for the employer:

For the employer, the scheme acts as an essential tool for attracting scarce and specific talent at competitive wage costs, while the associated administrative burdens remain low because there is no need to check separate claims.

How do you apply for the 30% ruling?

The application is made via a joint request from both the employer and employee to the tax authorities.

1. Time limit: Submit the request within four months of the first business day for the arrangement to take effect retroactively from the start date. Should the request be submitted too late, the scheme will apply from the first day of the month following the month in which the request was submitted.
2. Burden of proof: Documents must be presented that substantiate the 150 kilometer trip and the employee's expertise. This can include leases, diplomas, or bank statements from the country of origin, for example.
3. Decision: Upon final approval, the inspector issues a decision with a maximum period of five years.

Expat scheme example:

Example 1;

The salary, including compensation, is €85,000. This will mean that the tax-free allowance is equal to a maximum of €25,500 (30% of €85,000).

Example 2;

The salary, including compensation, amounts to €54,000. In this case, the maximum amount of compensation is limited to €5,987, based on the fact that the salary excluding the allowance must be more than €48,013.

Example 3;

The salary, excluding the allowance, is €54,000. In this example, the tax-free allowance amounts to a maximum of €23,142 (30/70 * €54,000).

Largely reversing the austerity of the expat scheme

In recent years, there has been a lot of political debate about the future of the 30% ruling. In the 2024 Tax Plan, it was initially decided to drastically cut the scheme by phasing out the scheme (this was called the 30-20-10% rule). After much criticism about the Dutch business climate, it was decided to largely reverse this austerity.

Concretely, this will mean that the new and complicated dismantling system is off the table. For the year 2026, the maximum percentage will remain at 30%. However, it has been agreed that from 1 January 2027, the percentage will be reduced for everyone to a fixed rate of 27% for the remaining term. Transitional law applies to employees who have been using the scheme since before 2024; for them, these changes are usually disregarded.