30% RULING

The 30% ruling is a Dutch tax facility aiming at attracting foreign employees with specific skills or expertise to work in the Netherlands. On this page you will find a brief overview of the 30% ruling including the conditions, the application procedure and two fictional examples.

Would you like to know whether the 30% ruling is applicable for you or your employees? Use the contact form at the bottom of this page or read our eMagazine!

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GENERAL

The 30% ruling provides a tax free allowance (30% allowance) which is deemed to cover all so-called extraterritorial costs. Extraterritorial costs are defined as the extra costs for staying outside of the country of origin.

Application of the 30% ruling gives rise to a substantial increase in net salary for the employee and substantial reduction of employer’s costs.

Tax free allowance

Which extraterritorial costs can be covered with this ruling?

» traveling costs of home leave
» extra costs of living
» double housing
» finding suitable housing and schools of children
» residence permit applications and changing of official documents (work permits excluded)
» language courses

CONDITIONS

DURATION

SALARY NORM

The salary norm must continuously be met. This may imply that the reduction of the agreed salary and the tax free allowance should be less than 30%. In 2022 an employee’s taxable yearly income must be more than EUR 39,467. For an employee that has a qualifying master’s degree and is younger than 30 years old, this is EUR 30,001.

APPLICATION PROCEDURE

EXAMPLE 1

Without 30% ruling (EUR) With 30% ruling (EUR)
Gross salary 45,000 45,000
30% allowance 0
_____
5,532
_____
Taxable income 45,000 39,468
Subtract: tax / social security 16,682 14,631
Add: 30% allowance 0
_____
5,532
_____
Net salary 28,318 30,369

In this example, the 30% allowance amounts to € 5,532. This is less than 30% of the salary. If the 30% allowance would be higher, the salary (excluding the 30% allowance) would not meet the salary norm of higher than € 39,467.

This example shows that the benefit of the 30% ruling is € 2,051 (€ 30,369 – € 28,318).

EXAMPLE 2

Without 30% ruling (EUR) With 30% ruling (EUR)
Gross salary 60,000 60,000
30% allowance 0
_____
18,000
_____
Taxable income 60,000 42,000
Subtract: tax / social security 22,242 15,569
Add: 30% allowance 0
_____
18,000
_____
Net salary 37,758 44,431

In this example, the 30% allowance amounts to € 18,000. This is 30% of the salary. This example shows that the benefit of the 30% ruling is € 6,673 (€ 44,431 – € 37,758).

MORE INFORMATION?

Would you like to know more about the 30% ruling? Fill out the below contact form to get in contact with our 30% ruling team.

    Corine Freke
    Corine Freke30% adviser
    Ellen Smit
    Ellen Smit30% adviser