The 30% ruling remains one of the key tax benefits for expats relocating to the Netherlands for work. This scheme allows employees to significantly reduce their tax burden, since a portion of their income is exempt from income tax.

In recent years, the rules for this popular scheme have been revised: a maximum cap has been introduced, certain options have been abolished, and conditions for new applicants have changed. These updates are already in effect and form part of the current practice.

In this article, we have gathered all the relevant information on how the scheme works in 2025 — both for those who are only planning to move and for those who applied for the benefit in earlier years.

What is the 30% ruling

The 30% ruling allows foreign specialists recruited from abroad to receive up to 30% of their salary as a tax-free allowance. Officially, this amount is considered reimbursement of “extraterritorial costs” related to relocation, settling, and living outside one’s home country.

The scheme is administered by your employer. If the application is submitted within four months of starting employment, the ruling applies from your first working day. The maximum duration is five years, provided you have not previously lived, studied, or worked in the Netherlands. Otherwise, the term may be shortened depending on your prior stay in the country.

Contrary to a common stereotype, the 30% ruling is not directly linked to the highly skilled migrant (kennismigrant) status. Any employee hired from abroad who meets the income requirements can qualify for the benefit.

Important: the scheme is only available for employees working under an employment contract. Business owners cannot apply directly unless they are formally employed by their own BV under a labor contract and earn a salary above the threshold.

Beyond the obvious tax savings, there is an extra perk: the ruling grants the right to exchange a foreign driver’s license for a Dutch one without having to pass an exam. This applies both to the employee and their registered partner or spouse living at the same address. More details on this and other ways of exchanging a license can be found in a separate article.

Main rules in 2025

Since 2024, a strict income cap has been in place. In 2025, the maximum salary eligible for the 30% ruling is €246,000 per year. This means the tax-free portion cannot exceed €73,800 annually. For partial employment years, the amount is calculated proportionally.

For new applicants in 2025, the following conditions apply:

• The applicant must have lived at least 150 km away from the Dutch border for 16 out of the last 24 months.
• After applying the ruling, the taxable income must not fall below:
  • €46,660 per year for employees over 30 years old;
  • €35,468 per year for employees under 30 with a master’s degree (European standard).*

*These thresholds are indexed annually by the Dutch Tax Office. The values above are valid for 2025. See how the requirements changed in past years in our dedicated article.

From 2025, the option of partial non-resident tax status is abolished. Previously, this allowed expats to exclude foreign assets and income (e.g., investments, savings, property) from their Dutch tax declaration. Now all beneficiaries of the ruling must file a full tax return and are taxed under general rules.

The phased reduction scheme (30–20–10%) has also been scrapped. From 2025, the flat 30% rate applies for the entire duration (until 2027).

From 2027, the tax-free allowance will be reduced from 30% to 27% for new applicants.

How it works in practice

If your annual salary in 2025 is €100,000, then with the ruling only €70,000 is taxable. The remaining €30,000 is tax-free. This significantly reduces the overall tax burden, especially for higher incomes.

If your salary exceeds the cap of €246,000 (2025), the tax-free portion is limited to a maximum of 30% of that amount. Any income above the cap is fully taxable.

What happens if you received the ruling earlier

For employees who applied before 2025, transitional rules apply:

• Before the end of 2022: the income cap applies from 2026. Partial non-resident status is available until the end of 2026. From 2027, full residency rules apply, but the 30% rate remains unchanged.
• In 2023: same transitional rules apply — the scheme continues under old conditions until the end of 2026.
• In 2024: the income cap already applies. 2024 was the last year to choose partial non-resident status. From 2027, the rate decreases to 27%.
• In 2025 and later: the new rules apply immediately. From 2027, the maximum percentage drops to 27%.

Comparison table: 30% ruling conditions depending on the year of application

Other important details

Changing employers does not cancel the benefit, provided continuity is maintained and the new employment starts within three months.

The income thresholds are indexed annually, so exact amounts may vary slightly. It is important to note that if your taxable income after applying the ruling drops below the required minimum, the benefit ends automatically.

If your income falls just below the threshold after applying the 30% benefit, you may adjust the percentage applied to your salary. The maximum is 30%, but it can also be set lower — for example, 25%, 10%, or even 1%. This adjustment must be agreed upon with your employer. Keep in mind that not all employers are willing to apply changes retroactively, so it is best to calculate the impact in advance.

Final thoughts

The 30% ruling remains a valuable tool for professionals relocating to the Netherlands. While certain options (partial non-resident status, phased reduction, unlimited salary cap) have been phased out, the scheme still provides substantial tax relief. The key is to understand which rules apply in your case — depending on the year of application and your current employment conditions.

If you are applying for the first time in 2025, make sure to discuss all parameters with your employer and get advice on the application process. If you already benefit from the scheme, it is worth checking how the transitional rules apply to you and what changes will take effect in the coming years.