Quick reference — 2025
What the 30% ruling is and how it works
The 30% ruling is a payroll tax facility, not an income tax deduction. It works by allowing the employer to designate up to 30% of the employee's gross salary as a tax-free expense allowance — called the extraterritorial costs allowance. This portion is not subject to Dutch income tax or social contributions. Only the remaining 70% is taxed as normal employment income.
From January 2024, the Dutch government reduced the tax-free percentage from 30% to a phased structure: 30% for the first 20 months, 20% for the next 20 months, and 10% for the final 20 months of the maximum 60-month period. However, for employees who already had the ruling before 1 January 2024, transitional provisions apply and they continue under the old rules for their remaining period.
The name 30% ruling is therefore slightly misleading for new applicants from 2024 onwards — the effective average benefit over the full 5-year period is lower. The ruling is applied through payroll by the employer and requires a joint application by employer and employee to the Dutch tax authority (Belastingdienst).
A key feature is that the 30% ruling also allows the employee to be treated as a partial non-resident taxpayer (partieel buitenlands belastingplichtige) for Box 2 and Box 3 purposes, which can significantly reduce wealth tax liability on foreign assets.
Calculating the tax-free allowance
Eligibility conditions
To qualify for the 30% ruling, the employee must meet all of the following conditions. First, the employee must be recruited from abroad — either a foreign national hired from outside the Netherlands, or a Dutch citizen who has lived outside the Netherlands for more than 16 of the 24 months before starting work.
Second, the employee must have lived more than 150 kilometres from the Dutch border for more than 16 of the 24 months before the first day of employment in the Netherlands. This distance requirement is strictly enforced and means employees from Belgium, Luxembourg and parts of Germany typically do not qualify.
Third, the employee must have a specific expertise that is scarce in the Dutch labour market. For most employees, this is demonstrated by meeting the minimum salary threshold: 46.107 gross per year in 2025, or 35.048 for employees under 30 with a master's degree. Scientists and PhD researchers at recognised research institutions are exempt from the salary requirement.
Fourth, the employment must be with a Dutch employer — an entity registered and paying payroll taxes in the Netherlands. The application must be submitted within four months of the first day of employment to have the ruling apply from the start date. Later applications are possible but the ruling will only apply from the approval date, not retroactively.
Worked examples
Tax-free allowance: 90.000 x 30% = 27.000. Taxable salary: 90.000 x 70% = 63.000. Without ruling, income tax on 90.000 at Dutch progressive rates (approximately 37% on first 75.518 and 49,5% above) would be approximately 34.000. With ruling, tax on 63.000 is approximately 22.000. Annual saving: approximately 12.000. Actual saving depends on deductions, partner income and full tax calculation.
The ruling cannot apply to salary above the Balkenendenorm (236.000 in 2024). The tax-free allowance is therefore 236.000 x 30% = 70.800. The remaining 64.000 (300.000 - 236.000) is taxed normally. The employee pays income tax on: 236.000 x 70% = 165.200 plus 64.000 = 229.200 of taxable income.
For new applicants from January 2024, the ruling applies at 30% for months 1 to 20, 20% for months 21 to 40, and 10% for months 41 to 60. Total tax-free allowance over 5 years: (20 x 2.000) + (20 x 1.333) + (20 x 667) = 40.000 + 26.667 + 13.333 = 80.000. Average annual tax-free allowance: 16.000. Effective average percentage: 20% over the full period.
Netherlands 30% Ruling Calculator
Enter your gross salary and application date to calculate your tax-free allowance, taxable salary and estimated annual tax saving under the 30% ruling.
30% ruling benefit by salary level — 2025
| Gross Salary | Tax-free (30%) | Taxable (70%) | Approx. Annual Tax Saving |
|---|---|---|---|
| 50.000 | 15.000 | 35.000 | ~5.500 |
| 70.000 | 21.000 | 49.000 | ~8.000 |
| 90.000 | 27.000 | 63.000 | ~11.000 |
| 120.000 | 36.000 | 84.000 | ~15.500 |
| 150.000 | 45.000 | 105.000 | ~19.500 |
| 236.000 (cap) | 70.800 | 165.200 | ~32.000 |
Common mistakes with the 30% ruling
Methodology
Salary thresholds and percentages are based on official 2025 Belastingdienst publications. Tax saving estimates use 2025 Dutch income tax rates: 36,97% on income up to 75.518 and 49,50% above. Actual savings vary based on full tax return including deductions, partner income, mortgage interest and other factors.
The 30% ruling rules have changed significantly and may change again. The Dutch government has proposed further modifications from 2027. Always verify current conditions with the Belastingdienst or a Dutch tax adviser before making employment or relocation decisions based on the ruling.
Calculate your 30% ruling benefit
Enter your gross salary to see your tax-free allowance, taxable income and estimated annual tax saving under the Dutch 30% ruling.
Frequently asked questions
Formula based on standard mathematical and financial methods. Results are for informational purposes. Last reviewed May 2026. Version 1.