What are the recent changes to the 30% ruling and how do they affect my company? - Primebridge Global

What are the recent changes to the 30% ruling and how do they affect my company?

april 6, 2026

The 30% ruling is one of the Netherlands’ most valuable tax incentives for attracting international talent. However, it has undergone significant changes in recent years. If your company employs expats or is planning to hire from abroad, the current rules look quite different from what they did even a few years ago. Here is a clear breakdown of what has changed, what it means for your workforce, and what your company should do about it.

What is the 30% ruling, and who qualifies for it?

The 30% ruling in the Netherlands is a tax facility that allows employers to pay qualifying foreign employees up to 30% of their gross salary as a tax-free allowance, intended to cover the extra costs of relocating to and living in the Netherlands. It significantly reduces the employee’s effective income tax burden, making Dutch employment packages more competitive internationally.

To qualify, an employee must be recruited from abroad, meaning they must have lived more than 150 kilometres from the Dutch border for at least 16 of the 24 months prior to starting work in the Netherlands. The role must also require specific expertise that is scarce in the Dutch labour market, which in practice is largely determined by meeting a minimum salary threshold. The ruling applies for a maximum of five years and must be applied for jointly by the employer and employee through the Dutch Tax Authority (Belastingdienst).

What are the most recent changes to the 30% ruling?

The most significant recent changes to the 30% ruling came into effect on 1 January 2024. The flat 30% tax-free reimbursement rate was replaced with a tapered structure: 30% in the first 20 months, 20% in the following 20 months, and 10% in the final 20 months of the five-year period. This phased reduction means the total benefit is lower over time than under the previous flat-rate arrangement.

Before this change, employees who received the ruling before 2024 were protected under transitional provisions, but those protections are time-limited. The Dutch government has also increased scrutiny of the ruling more broadly, reflecting ongoing political debate about its cost and fairness. For companies with expat workforces, this is not a minor administrative update. It directly affects net compensation and should be factored into employment contracts and total cost-of-employment calculations.

How does the salary threshold change affect eligibility?

To qualify for the 30% ruling, employees must meet a minimum taxable salary threshold, which is adjusted annually. As of 2024, the general threshold is approximately €46,107 per year (taxable salary, excluding the tax-free allowance itself). For employees under 30 who hold a master’s degree, a reduced threshold applies, set at around €35,048. These figures are reviewed each year in line with wage indexation.

For most mid-to-senior-level hires at international companies, the general threshold is not a barrier. However, it does matter for roles at the lower end of the professional salary range, particularly where compensation packages are structured with a significant variable component. If the fixed taxable salary falls below the threshold, the ruling does not apply, regardless of the employee’s qualifications or origin. Companies should verify threshold compliance at the point of hire and again when salary structures change—for example, during restructuring or role changes.

What does the WNT salary cap mean for the 30% ruling?

The WNT (Wet normering topinkomens) is the Dutch public-sector remuneration standard, which sets a cap on executive pay in publicly funded organisations. From 2024, the 30% ruling is capped at the WNT norm, meaning the tax-free allowance can only be applied to the portion of salary up to the WNT ceiling, which in 2024 stands at €233,000 gross. Any salary above this cap does not benefit from the 30% facility.

For the vast majority of expat hires at private companies, this cap has no practical impact. It becomes relevant only for very senior executives with high total compensation packages. However, for internationally owned firms in financial services, private equity, or asset management—where senior talent compensation can exceed this threshold—it is worth modelling the actual tax benefit against the full package. The ruling still applies to the capped portion, so it retains value, but the benefit is not unlimited.

How do these changes affect companies hiring expats in the Netherlands?

For companies actively recruiting international talent into the Netherlands, the tapered structure introduced in 2024 means the 30% ruling is less generous over the full five-year term than it was previously. Employees who have held the ruling for more than 20 months now receive a lower tax-free percentage, which reduces their net take-home pay unless the employer adjusts gross compensation to offset the difference.

This has a direct impact on how you structure and communicate employment offers. Candidates who are aware of the ruling, particularly those with prior Netherlands experience or who have sought advice, will factor the taper into their expectations. Companies that fail to account for this in offer modelling risk either overpromising or losing candidates to competitors that have already adjusted their compensation frameworks.

Review offer templates: Ensure your employment offers reflect the phased benefit, not the old flat 30% assumption.
Model total net compensation: Show candidates the year-by-year net impact, particularly for multi-year contracts.
Coordinate with payroll: The taper must be applied correctly in Dutch payroll processing from the outset.
Factor in the salary threshold: Confirm that the fixed taxable salary meets the current annual minimum before applying for the ruling.

Should existing 30% ruling holders be concerned about transitional rules?

Employees who held a valid 30% ruling before 1 January 2024 were initially protected under a transitional arrangement, meaning the old flat 30% rate continued to apply for a limited period. However, that transitional protection ended on 31 December 2025. From 1 January 2026, all active 30% ruling holders fall under the new tapered system, regardless of when their ruling was originally granted.

This is a concrete deadline that affects current employees, not just new hires. If you have staff who received the ruling before 2024 and have been operating under the assumption that their full 30% benefit is protected indefinitely, that assumption is no longer valid. Their ruling now moves into the tapered structure based on how far into their five-year term they are. HR and payroll teams need to map each ruling holder’s start date against the taper brackets and adjust payroll accordingly. Failing to do so creates both a compliance risk and a risk of employee dissatisfaction when net pay changes unexpectedly.

What steps should my company take to stay compliant?

Staying compliant with the 30% ruling in the Netherlands requires active management rather than a set-and-forget approach. The rules have changed, the taper is now in effect, and the transitional period has ended. Here is what your company should be doing now.

Audit your current ruling holders

Map every employee who holds an active 30% ruling and identify their ruling start date. Calculate which taper bracket each employee currently falls into (30%, 20%, or 10%) and confirm that your payroll system is applying the correct percentage. Any discrepancy between what is being paid and what the ruling permits creates a tax liability.

Update employment contracts and offer letters

If your standard employment contract or offer letter references the 30% ruling as a flat benefit, update it. Contracts should reflect the tapered structure and make clear that the percentage reduces over time. This protects the company from disputes if employees later claim they were misled about their net compensation.

Coordinate payroll and HR processes

The ruling must be applied correctly in Dutch payroll every pay period. This includes tracking the ruling expiry date, monitoring the taper transitions, and ensuring that the salary threshold continues to be met. If the employee’s role or compensation changes, recheck eligibility.

Seek professional support for new applications

Applying for the 30% ruling requires submitting the correct documentation to the Belastingdienst within four months of the employee’s start date. Missing this window means the ruling cannot be applied retroactively for the missed period. Getting this right from day one matters.

Managing the 30% ruling across a workforce of international hires involves more moving parts than most HR teams anticipate, especially once the taper, threshold checks, and payroll coordination are factored in. If your company is navigating these changes and wants to make sure everything is being handled correctly, we support companies with Dutch tax compliance and payroll administration as part of a broader back-office service for internationally owned businesses. Reach out to us if you want a straightforward review of where your company currently stands.

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