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What is the salary threshold for the 30% ruling in the Netherlands?

The 30% ruling in the Netherlands is a tax facility that allows qualifying internationally recruited employees to receive 30% of their gross salary tax-free. To qualify, employees must meet a salary threshold that is set annually by the Dutch tax authorities. For 2025, the general salary threshold is €46,107 gross per year, excluding the 30% allowance itself. For employees under 30 with a master’s degree, a reduced threshold of €35,048 applies.

If your company is hiring internationally or relocating staff to the Netherlands, understanding how this facility works, who qualifies, and how to apply is worth getting right from the start. The rules have also changed significantly in recent years, so what applied a few years ago may no longer be accurate today.

What is the 30% ruling in the Netherlands?

The 30% ruling is a Dutch tax facility designed to attract skilled workers from abroad. It allows employers to pay up to 30% of an eligible employee’s gross salary as a tax-free allowance, intended to compensate for the extra costs of relocating to and living in the Netherlands. This significantly reduces the employee’s effective income tax burden during the ruling’s validity period.

The facility exists because the Netherlands wants to remain competitive in attracting international talent. For foreign companies setting up Dutch operations, it is a practical tool that makes Dutch employment packages more attractive without necessarily increasing gross payroll costs. The tax-free allowance is meant to cover what the Dutch tax authorities call “extraterritorial costs”—relocation expenses, a higher cost of living, and other costs tied to working abroad.

The ruling applies for a maximum period, currently set at five years, and must be applied for jointly by the employer and employee. It is not automatic, and it does not apply retroactively if you miss the deadline. Getting the application right and on time matters.

What is the salary threshold for the 30% ruling?

To qualify for the 30% ruling in the Netherlands, an employee’s taxable salary must meet a minimum threshold after the 30% allowance is applied. For 2025, the taxable salary must be at least €46,107 gross per year. A lower threshold of €35,048 applies to employees under 30 years of age who hold a master’s degree or an equivalent qualification.

These thresholds are reviewed and adjusted annually, so it is worth checking the current figures each year rather than relying on older sources. The thresholds are set by the Dutch tax authorities and published as part of the annual tax update cycle.

One point that frequently causes confusion: the salary threshold applies to the taxable salary, meaning the salary after the 30% allowance has been deducted. This means the gross contractual salary needs to be higher than the threshold figure to ensure the taxable portion still meets the minimum. We explain how this calculation works in the next section.

How is the salary threshold for the 30% ruling calculated?

The salary threshold for the 30% ruling applies to the taxable wage, which is the gross salary minus the 30% tax-free allowance. This means the gross contractual salary must be set high enough so that 70% of it still meets or exceeds the threshold. In practice, the required gross salary is approximately €65,867 to produce a taxable salary of €46,107.

Here is how the logic works in practice:

  • The employer pays a gross salary, for example, €66,000 per year.
  • 30% of that gross salary (€19,800) is paid as a tax-free allowance.
  • The remaining 70% (€46,200) is the taxable salary.
  • That taxable salary must equal or exceed the applicable threshold (€46,107 for 2025).

This structure means you cannot simply compare the threshold figure to the contractual salary. The gross salary in the employment contract needs to be calculated backwards from the threshold to ensure compliance. For HR and payroll teams unfamiliar with Dutch tax mechanics, this is one of the most common areas where errors occur during setup.

It is also worth noting that certain components of remuneration, such as pension contributions or expense reimbursements, may or may not count toward the qualifying salary, depending on their structure. Getting the payroll setup right from day one avoids complications later.

Who qualifies for the 30% ruling beyond the salary requirement?

Beyond the salary threshold, an employee must meet several additional conditions to qualify for the 30% ruling. They must have been recruited from outside the Netherlands, must have lived more than 150 kilometres from the Dutch border for at least 16 of the 24 months before starting their Dutch employment, and must have specific expertise that is scarce in the Dutch labour market.

Breaking these conditions down:

  • Recruited from abroad: The employee must have been living and working outside the Netherlands before taking up the Dutch role. This applies whether they are joining a new employer or transferring within a multinational group.
  • 150-kilometre rule: The employee’s home address in the 24 months before the start of Dutch employment must have been more than 150 kilometres from the Dutch border for at least 16 of those months. This rules out employees who were already living in neighbouring border regions of Belgium or Germany.
  • Specific expertise: The employee must have skills that are scarce in the Dutch labour market. In practice, meeting the salary threshold is used as a proxy for this requirement. If the salary condition is met, the expertise condition is generally considered satisfied.

The ruling applies to employees, not to self-employed individuals or directors without an employment relationship. For international companies building a Dutch team, this means the ruling can apply to transferred employees, locally hired foreign nationals, and senior executives relocating to the Netherlands, provided all conditions are met.

What happens if your salary drops below the threshold?

If an employee’s taxable salary falls below the required threshold during the ruling period, the 30% ruling is no longer applicable for that period. The tax-free allowance cannot be applied, and the full salary becomes subject to Dutch income tax. This applies for as long as the salary remains below the threshold.

This situation can arise in several scenarios:

  • A salary reduction due to a role change or restructuring.
  • A shift to part-time working arrangements.
  • A period of unpaid leave in which the effective annual salary drops below the minimum.

If the salary later returns to the qualifying level, the ruling can resume, provided the ruling period has not expired. However, the period during which the salary was below the threshold does not extend the overall duration of the ruling. The clock continues to run regardless.

For HR and payroll teams, this means monitoring salary levels against the threshold annually, particularly after any changes to an employee’s contract. It is also worth reviewing the threshold each year, as the annual adjustment could affect borderline cases where the salary is close to the minimum.

How has the 30% ruling changed in recent years?

The 30% ruling has undergone significant changes since 2023, and the rules in place today are meaningfully different from those that applied a few years ago. The most significant change is the reduction in the maximum duration of the ruling from eight years to five years, which took effect for new applications from 2024 onwards.

Several other changes have been introduced or announced:

  • Partial non-resident taxpayer status: Employees using the 30% ruling previously had the option to be treated as partial non-residents for Dutch tax purposes, which provided additional benefits on foreign income and assets. This option was abolished from 2025.
  • Cap on the ruling base: From 2024, the 30% allowance can only be applied to salary up to the “Balkenendenorm” (the Dutch public sector salary standard, set at approximately €246,000 in 2025). Salaries above this cap do not benefit from the 30% exemption on the excess amount.
  • Transitional arrangements: Employees who were already using the ruling before certain cut-off dates may be covered by transitional rules that preserve some of the older conditions for a limited period.

For companies that have employees currently on the ruling, it is worth reviewing whether any of these changes affect their position. For new hires, the current rules apply from day one, and the planning assumptions should reflect the five-year maximum and the salary cap.

How do you apply for the 30% ruling in the Netherlands?

The 30% ruling application is submitted jointly by the employer and the employee to the Dutch Tax and Customs Administration (Belastingdienst). The application must be filed within four months of the employee’s start date to take effect from day one. Applications submitted after this window can still be filed, but the ruling will apply only from the first day of the month following the submission date, meaning earlier months are lost.

The application process involves the following steps:

  1. Confirm eligibility: Verify that both the salary threshold and the other qualifying conditions are met before submitting.
  2. Gather supporting documents: This typically includes proof of the employee’s previous residence abroad, the employment contract, and evidence of qualifications where the reduced threshold applies.
  3. Submit the joint application: The employer files the request with the Belastingdienst on behalf of both parties.
  4. Receive the ruling decision: The tax authorities issue a decision confirming the ruling and its validity period. This decision is then used as the basis for applying the 30% allowance in the payroll.

Once the ruling is granted, the employer applies the 30% exemption through the Dutch payroll. The ruling decision specifies the start and end date, and payroll must be set up to reflect this correctly. If the employee changes employer during the ruling period, a new application must be submitted with the new employer, provided the ruling period has not expired and the salary threshold is still met.

The 30% ruling is a genuinely useful facility for foreign companies employing internationally recruited staff in the Netherlands, but the conditions, thresholds, and recent legislative changes make it an area where getting the details right matters. If you are setting up a Dutch payroll or reviewing the status of employees currently on the ruling, we are happy to help you work through the specifics. Our tax compliance services cover the full scope of Dutch tax obligations for internationally owned companies, and we work closely with specialist partners on 30% ruling applications and payroll setup. Feel free to get in touch with us to discuss your situation.

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