The 30% Ruling for Foreign Employees in the Netherlands

The Dutch expat scheme, commonly known as the 30% ruling, allows employers to pay qualifying employees part of their salary as a tax-free allowance for the additional costs of working outside their home country.

Whether you are moving to the Netherlands, changing employers or considering your own BV, Nexpat can help assess your eligibility and handle the application.

How does the 30% ruling work?

In 2026, the tax-free allowance can be up to 30% of your salary, including the allowance. The remaining taxable salary must meet the applicable salary threshold. This means that qualifying for the ruling does not necessarily allow you to receive the full 30% tax-free.

The allowance compensates for qualifying extraterritorial costs without requiring evidence of each individual expense. It does not mean that every relocation or living expense can also be reimbursed tax-free on top of the allowance.

For 2026, the allowance is calculated over annual remuneration of up to €262,000, giving a maximum annual tax-free allowance of €78,600. The cap is adjusted if the ruling applies for only part of the year.

The effect on your net salary and your employer’s costs depends on your employment and salary arrangements.

Who qualifies?

The main requirements concern recruitment from abroad, previous residence, salary and employment.

You must generally have been recruited from outside the Netherlands. During more than 16 of the 24 months before your first working day in the Netherlands, you must have lived more than 150 kilometres from the Dutch border.

For 2026, your annual taxable salary, excluding the tax-free allowance, must exceed:

• €48,013 under the standard salary requirement.
• €36,497 if you are under 30 and hold a qualifying master’s degree.

Special rules apply to certain scientific researchers and doctors training to become specialists.

Previous residence or employment in the Netherlands can affect your eligibility and the available duration. It does not automatically rule out an application.

Applying for the ruling

The employee and employer apply jointly to the Dutch tax authorities.

To obtain application from the first working day, the request must be submitted within four months of starting the employment. A later application generally means that the ruling can only apply prospectively.

Once granted, the ruling is processed through the employer’s payroll administration. The relevant conditions, including the applicable salary requirement, must continue to be met.

How long does the ruling last?

The ruling is available for a maximum of five years. Previous periods of residence or work in the Netherlands may reduce this period.

Changing employers or moving to your own BV does not restart the five-year period. Any continuation is limited to the remaining duration.

Changing employers or going on garden leave

You may be able to continue your existing ruling with a new employer. A new application is required, and two separate deadlines are important:

• Agreeing the new employment: a new employment agreement must be concluded within three months of your last actual working day with your previous employer.
• Applying for continuation: the request must be submitted within four months of starting the new employment for the ruling to apply from the first day, provided the other conditions are met.

If you are on garden leave, your last actual working day may be earlier than your formal employment end date, even if you continue receiving salary. Check the dates promptly rather than waiting for your employment contract to end.

Can you use the ruling through your own BV?

Yes, this may be possible if you work as an employee of your own BV and meet the relevant conditions.

Your BV contracts with clients and pays you a salary through its payroll administration. The ruling applies to qualifying employment income. It does not apply to dividends or directly to profits earned as a sole proprietor.

Considering working through your own BV? Read our NEXPAT guide to working through your own BV with the 30% ruling for a practical overview of how this arrangement works and what to consider before making the switch.

If you already have a ruling with another employer, the rules for changing employers also apply when moving to your own BV.

If you live abroad and intend to apply for the first time through your own BV, the recruitment, employment and relocation arrangements should be reviewed before you move to the Netherlands. Incorporating a company does not itself establish eligibility.

Is a BV the right choice?

This depends on your expected revenue, business expenses, salary, insurance needs and ongoing compliance costs.

A BV must maintain accounting records, operate payroll, prepare annual accounts and file the applicable tax returns. Your salary must also be assessed under the Dutch customary salary rules for substantial shareholders, separately from the salary requirements for the 30% ruling.

Depending on your ownership and control of the BV, you may not be covered by Dutch employee insurance schemes. Any reduction in contributions should therefore be considered alongside the loss of insurance cover.

What about a foreign company or an Employer of Record?

Employment through an existing foreign company may be an option where the company can act as a Dutch payroll withholding agent and the other conditions are met. Dutch payroll registration alone does not establish eligibility for the ruling or resolve the company’s other tax obligations.

An Employer of Record may also be suitable in some circumstances. Under this arrangement, the EOR becomes your legal employer and handles payroll and agreed employer obligations. The suitability of the arrangement and eligibility for the ruling must be assessed separately.

More information is available on the Employer of Record page at Payrolus.

Residence permits and the right to work

The 30% ruling is a tax arrangement. It does not grant permission to live or work in the Netherlands.

If your residence permit is linked to your employment, changing employers or starting work through your own BV may affect your immigration position. A successful tax ruling application does not, by itself, preserve your residence status.

Where necessary, we coordinate with immigration law partners to assess your options.

How Nexpat can help

We assist with eligibility assessments, first applications and continuation requests when changing employers or moving to your own BV.

Our application service includes an eligibility review, preparation, submission and employer coordination. DGA and complex applications include the additional documentation and explanation required for the proposed arrangement.

We can also coordinate BV incorporation and provide ongoing accounting, tax compliance and payroll administration. Further structuring advice and immigration assistance are agreed separately.

We confirm the applicable scope and fee before starting.

Start your application or discuss your options

If you would like Nexpat to assess your eligibility and handle your application, please contact us. We will confirm the required information, scope and applicable fee before starting.

If you first need advice on your eligibility, deadlines or proposed business setup, we offer a 60-minute online consultation for €215 excluding VAT. Please contact us to arrange a suitable time.

The consultation provides an initial assessment of your circumstances and the next steps. The consultation fee is refunded if you become a client.

Other frequently asked questions

What changes from 2027?

In 2026, the maximum tax-free allowance remains 30%. From 2027, it generally becomes 27%. Transitional rules may preserve the 30% rate and affect the applicable salary threshold, depending on when you first used the ruling.

Does the ruling exempt savings and investments?

Not generally. Partial non-resident taxpayer status was abolished from 2025. Qualifying employees who already used the ruling before 2024 may continue to elect this status through 2026 under transitional rules.

This can limit Dutch taxation in Box 2 and Box 3, but does not exempt all assets or income. It is not a general exemption for worldwide income.

Can I exchange my foreign driving licence?

A valid 30% ruling may allow you to exchange a foreign driving licence without taking a Dutch driving test, subject to the applicable requirements. Certain family members may also qualify.

The application is made through your municipality. Check the current RDW requirements for your circumstances, including the documents needed and whether a health declaration is required.

Information based on the rules applicable in 2026. Individual circumstances and transitional provisions may affect the outcome.

Official guidance: Dutch tax authorities: the expat scheme, changes from 2027 and partial non-resident taxpayer status.