The 30% ruling in the Netherlands is a tax incentive designed to attract foreign employees with specific expertise. While it’s a popular scheme among expats and employers, many questions surround its conditions and application process. In this blog, we address the most frequently asked questions about the 30% ruling to provide clarity and guidance.
1. What is the 30% ruling?
The 30% ruling allows eligible foreign employees to receive up to 30% of their gross salary tax-free. This tax-free portion is intended to cover additional costs incurred when relocating to the Netherlands, such as housing and travel. For a more detailed explanation, check out our payroll administration services.
2. Who qualifies for the 30% ruling?
To qualify for the 30% ruling, employees must meet the following criteria:
- Expertise: The employee must have skills or expertise that are scarce or unavailable in the Dutch labor market.
- Minimum salary: For 2025, the minimum taxable salary requirement is €41,954 per year. A lower threshold applies to employees under 30 with a master’s degree.
- Distance: The employee must have lived at least 16 months outside a 150-kilometer radius of the Dutch border in the 24 months prior to their employment.
- Employer registration: The employer must be registered with the Dutch tax authorities.
3. How to apply for the 30% ruling
Many people ask, “How do I apply for the 30% ruling?” The process involves the employer and employee submitting a joint application to the Dutch tax authorities. Applications should be submitted within four months of starting work in the Netherlands. For guidance, explore our tax advisory services.
4. How long does the 30% ruling apply?
As of 2019, the maximum duration of the 30% ruling is five years. This applies regardless of whether the employee changes employers during this period. The clock starts ticking from the first day of employment in the Netherlands.
5. Can I apply for the 30% ruling retroactively?
Yes, employees and employers can apply for the 30% ruling retroactively. If approved, the benefits will apply from the start date of employment. It is crucial to ensure that your application meets all the necessary conditions, and our financial advisory services can assist you in this process.
6. What expenses are covered by the 30% ruling?
The 30% ruling is intended to cover “extraterritorial costs,” which include:
- Relocation expenses
- Housing costs
- Travel expenses to and from the Netherlands
For detailed insights on managing these costs, visit our accounting and bookkeeping services.
7. Can I combine the 30% ruling with other tax benefits?
Yes, in many cases, the 30% ruling can be combined with other tax benefits. However, it’s essential to consult with a tax advisor to ensure compliance and maximize your benefits.
8. What happens if I change employers?
If you change employers within the five-year period, you can transfer the 30% ruling to your new employer. Both the new employer and employee must reapply for the scheme, but the duration does not reset. For seamless transitions, consult our payroll administration team.
9. How does the 30% ruling affect my pension and benefits?
The 30% tax-free allowance does not contribute to your pension or social security contributions, as these are calculated based on your taxable income. While this means lower contributions, it can also result in lower benefits. Contact us for proactive financial advice to manage this effectively.
10. What happens if I no longer meet the requirements?
If you no longer meet the eligibility criteria—for example, if your salary falls below the threshold—the tax authorities may revoke the 30% ruling. It’s crucial to monitor your situation and consult a financial advisor for proactive planning.
11. How Practical can help with the 30% ruling
At Practical | Excellence in Finance, we specialize in payroll administration, tax advice, and financial guidance. Our team ensures a seamless application process for the 30% ruling while offering proactive advice to optimize your financial strategy.
Learn more from our clients
See how we help businesses and employees navigate complex tax rules with ease: client cases. With offices in Amsterdam, Rotterdam, Eindhoven, and Maartensdijk, we’re here to assist you.
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If you have more questions about the 30% ruling or need assistance with payroll administration, request a free quote via Payroll Administration Rate | Practical Accounting Services. Together, we can ensure you make the most of your opportunities in the Netherlands.
Would you like to know how Practical can help you organize your administration and provide proactive financial advice? Request a free quote via Payroll Administration Rate | Practical Accounting Services and discover how we can support your business. Let’s prepare for the future together! Contact us today to learn more about our tailored solutions for your company.
