How does the Dutch expat scheme (30% ruling) work?

The Dutch expat scheme, still widely known as the 30% ruling, can provide a significant tax advantage for eligible employees working in the Netherlands. Whether you qualify depends on your salary, employment and the conditions set by the Dutch tax authorities.

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How the Dutch expat tax scheme works

What is the expat scheme (30% ruling)?

The scheme is a tax benefit for certain employees who move to the Netherlands for work. Under the Dutch expat scheme, your employer can provide a tax-free allowance for certain additional costs associated with working in the Netherlands away from your country of origin.

The tax-free allowance is processed through your payroll, allowing part of your qualifying remuneration to be paid without wage tax. This can increase your net monthly income.

The expat scheme does not apply automatically. It must be requested jointly by you and your employer and approved by the Dutch Tax Authorities (Belastingdienst).

Understanding the financial impact

How much of your salary can be paid tax-free?

In 2025 and 2026, eligible employees can receive up to 30% of their qualifying salary tax-free. The previously introduced 30%-20%-10% phase-down no longer applies. From 1 January 2027, the maximum will generally decrease to 27%. Transitional rules depend on when the scheme first applied:

By the end of 2023: up to 30% can generally continue for the remaining duration.
In 2024: the maximum decreases to 27% from 2027, while the existing indexed salary threshold continues to apply.
From 1 January 2025: the maximum decreases to 27% from 2027 and a higher salary threshold applies.

The scheme can apply for up to five years, although previous periods of living or working in the Netherlands may reduce this period.

An annual salary cap also applies. This is €262,000 in 2026 and increases to €273,000 in 2027. The exact benefit therefore depends on your start date, salary and personal situation.

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Key conditions for expats

Do you qualify for the Dutch expat scheme (30% ruling)?

You may qualify if you meet the main conditions set by the Dutch Tax Administration:

Recruited from abroad: You must generally have been recruited or transferred from outside the Netherlands.
Salary requirement: In 2026, your taxable annual salary excluding the tax-free allowance must generally exceed €48,013. If you are under 30 and have a qualifying academic master’s degree, the lower threshold of €36,497 may apply.
Distance requirement: During the 24 months before your first working day in the Netherlands, you must generally have lived more than 150 kilometres from the Dutch border for more than 16 months.

The salary threshold is normally used to assess whether you have the required specific expertise. In exceptional cases, scarcity on the Dutch labour market may also be considered.

Different rules may apply to certain researchers, doctors in specialist training, PhD graduates and previous users of the expat scheme.

How do you apply for the expat scheme (30% ruling)?

1. You start working in the Netherlands

You must be employed and meet the conditions for an incoming employee under the expat scheme.

2. You and your employer submit the application

To have the scheme apply from your first working day, the application must be received by the Dutch Tax Administration within four months of that date. If you apply later, the scheme cannot be applied retroactively to your first working day.

3. The Dutch tax authorities assess your request

They review your salary, employment and eligibility.

4. The scheme is applied through your salary

If approved, the benefit is processed through your payroll. If submitted within 4 months of starting your job, it can apply retroactively from your first working day.

Important points to consider

What are the limitations of the expat scheme (30% ruling)?

The expat scheme has several important limitations:

Maximum duration
The scheme can apply for up to five years, but previous periods of living or working in the Netherlands may reduce this period.

Salary threshold
You must continue to meet the applicable salary requirement.

Lower percentage from 2027
The maximum is 30% in 2025 and 2026 and generally 27% from 2027. Transitional rules allow some employees who were already using the scheme by the end of 2023 to retain the 30% rate.

Changing employers
The expat ruling may continue when you change jobs, but different procedures apply. When moving to an unrelated employer, you must generally start the new job within three months and request continuation of the scheme.

Partial foreign tax liability ends
Since 2025, this option is generally no longer available for Box 2 and Box 3. Transitional rules may still apply until the end of 2026 for certain employees who were already using the scheme before 2024.

Your exact entitlement depends on your start date, salary and personal circumstances.

Check your eligibility and understand your options