This is a detailed article about the 30% tax ruling. If you are just getting started with the 30% ruling, read this first. This in-depth article covers:

What are the conditions of the 30% tax ruling for highly skilled migrants?

Expats who have been recruited from abroad for a position in the Netherlands may be eligible for the 30% tax ruling.

In order to qualify for the 30% ruling the following conditions have to be met:

  • You must be an employee
    In order to be eligible for the 30% ruling you have to be in an employment situation. For those who work as self-employed, it is not possible to claim the 30% ruling. However, if you set up a legal entity, a Dutch B.V. for instance, and become an employee of that company, you are considered to be in an employment situation and consequently may be eligible for the 30% ruling.

  • The employer and employee have to agree in writing that the 30% ruling is applicable
    The application for the 30% ruling has to be done by both employer and employee. If the 30% ruling is fully applicable, the gross salary of the employee will be reduced by 30%. This may have implications for your potential unemployment or disability benefits since these benefits are based on your taxable salary. Therefore the tax authorities require that both employer and employee are aware of these consequences. This agreement in writing can be done by means of a clause in your employment contract or as an addendum to the employment contract.

  • The employee has to transfer or be recruited from abroad to a Dutch employer
    It is only possible to claim the 30% ruling if you are transferred or recruited from abroad. You have to prove that you were residing outside the Netherlands before you began your present employment in the Netherlands. Furthermore, the employee must not have lived within 150 km of the Dutch border for no more than eight months out of the last 24 months prior to the start of employment in the Netherlands.

  • The employee has to have specific experience or expertise that is not or is rarely available in the Netherlands
    The employee has to have specific skills that are scarce in the Dutch labour market. These skills are determined by several facets such as salary, age, employment history, education and level of employment. None of these are conclusive but the combination of all aspects determines your specific skills. At present, the specific skills are assumed to be present if the minimum salary requirement is met (see below).

  • The gross salary has to surpass a minimum (adjusted annually).
    In 2022, the annual taxable salary for an employee cannot be less than €39,647 (in 2021 it was €38,961). However, a minimum salary of €30,001 is applicable for those who have completed a Master's degree and are younger than 30 years old (in 2021 it was €29,616). This means that by taking into account the 30% tax ruling, your salary cannot become less than these amounts. Furthermore, for scientific researchers, employees working in scientific education or doctors in training, no minimum salary is required. Please note that there are restrictions regarding the companies or institutions for which this group of employees can work. Salary thresholds are updated on 1 January every year.

What are the financial benefits of the 30% ruling?

What does the 30% ruling actually mean in financial terms? From a tax perspective, the salary agreed upon between the employee and employer will be reduced by 30%. In return, the employee should receive a 30% allowance as reimbursement for expenses. This is the most common way it is applied as it does not influence the salary burden for the employer. However, the employer is not obliged to pass on the advantage of the ruling to the employee. In practice the employer can partially or fully take the benefit.

Practical examples of the 30% ruling:

  • An employee who is 35 years old receives a salary of €100,000. This employee does meet the minimum salary requirement to receive the full 30% ruling. After taking into account the 30% ruling his taxable salary will be €70,000. In addition, he receives a tax free allowance of €30,000.

  • An employee who is 35 years old receives a salary of €50,000. If the 30% ruling would be taken into account in full, his taxable salary would be €35,000. This is lower than the mandatory salary and therefore not allowed. In this case, he would only benefit from the 30% ruling partially, for a maximum amount of (€50,000 -/- €39,647) €10,353.

What is considered salary?

The gross salary is typically considered salary, but what about the bonus, holiday allowance, company car, redundancy payment or other benefits?

Basically, the ‘regular employment income’ is the basis for calculating the 30% tax free reimbursement. There are special regulations regarding pension premiums, but the bonus, holiday allowance, benefit package and company car fall under the ruling. Severance payments do not fall under the 30% ruling definition of ‘regular employment income’ and therefore do not qualify for the 30% tax free option. If an employee is made redundant, it is important that they have a breakdown of the redundancy package so it can be determined which part is payment of the bonus and outstanding holiday allowance and which part is the actual severance payment.

Are there more benefits of the 30% tax ruling?

In addition to the fact that 30% of your salary will be paid tax free, there are also other benefits:

  • The 30% ruling and Box 3 of your tax return
    Under the 30% ruling you can opt for the ‘partial non-residency status’. You are then considered to be a non-resident tax payer in Box 2 and Box 3, even though you are living in the Netherlands. For Box 1 income you are considered a resident tax payer, therefore you do not pay income tax on assets in Boxes 2 and 3 (except for real estate located in the Netherlands and substantial shareholding in a Dutch resident BV) and you are entitled to the partnership ruling in Box 1.

  • Driving Licence
    If you have a foreign driving licence, in most cases you will have to retake the driving test in order to obtain a Dutch licence. However, if you benefit from the 30% ruling, you can switch your foreign driving licence without retaking the test.

More things to consider

  • Retrospective Period
    The 30% ruling becomes effective retroactively if the application is submitted within 4 months after starting your employment. If the application is submitted after 4 months, it will become effective as of the first day of the month following the application month. The tax authorities will reduce the total duration of the ruling by the period you have already resided in the Netherlands. 

  • Duration
    The maximum duration of the ruling is five years. For applications made prior to 1 January 2019, please see the changes to the legislation below.

  • Changing Jobs
    If you change jobs you can apply for a continuation of the ruling, provided that you still meet the conditions regarding specific skills and you start the new employment within three months of terminating the previous one.

Can you apply or reapply if you start your own business?

If you are employed in the Netherlands and have qualified for the 30% ruling, it can also be possible to start your own business and keep the benefits of this scheme. In order to do so, the construction of the new business should be a BV or payroll company, of which you become a salaried employee. The BV or payroll company must then apply for the 30% ruling on your behalf. Keep in mind that you must sign an employee contract with the BV or payroll company within three months of leaving your previous employer in order to maintain your eligibility for the 30% ruling.

Helpful contacts

Tax and Customs Administration Office (Belastingdienst)
Phone: 055-538 5385
Or you can send an email to

What next?

If you're making the move to the Amsterdam Area, get to grips with essential official matters, such as registration, residence permits and visas, or learn how IN Amsterdam might be able to ease your administrative burden.