If you’ve moved to the Netherlands or are thinking about it, you’ve probably heard the term “ruling” or “30% ruling” thrown around. But what does it really mean, why is it important, and what does it actually offer you? Let’s break it down and explain it in detail.

So, what exactly is the 30% ruling about?

Simply stated, the 30% ruling, also called 30% regeling, is a tax reduction introduced to ease the financial burden on expats moving to the Netherlands. The ruling has two main purposes: first, it lightens the financial load for those who must move their family to the Netherlands for an extended job assignment, and second, it simplifies the administrative process for employers reimbursing relocation expenses.

The reason it’s called the “30% ruling” is that, among other things, it allows you to receive up to 30% of your gross salary tax-free, with only 70% of your salary being taxed.

Dutch employers have the opportunity to provide tax-free reimbursement for certain relocation costs, known as extraterritorial costs. These can be reimbursed on an item-by-item basis, such as separately for a flight to an interview or for transporting personal belongings, or the employer can apply for the 30% ruling for the employee, thereby reducing the financial burden of relocation. However, once the 30% ruling is applied, the employer is no longer able to reimburse the majority of expat-related costs.

Along with the 30% tax benefit, obtaining the ruling unlocks several additional perks and possibilities:

• The ability to exchange your driver’s license for a Dutch one, for both the ruling holder and their family, without the need to retake driving tests.
• Eligibility for partial full tax residency status in the Netherlands.

Who is eligible for the ruling?

Contrary to popular belief, the 30% ruling is not directly linked to the highly skilled migrant status and can be obtained by any employee who meets the requirements. To qualify, the following criteria must be met:

• You must be an employee (not a company owner) with an employment contract.
• In the 2 years before your first day of work in the Netherlands, you must have:
  • Lived outside the Netherlands for more than 16 months, and
  • Lived at least 150 km away from the Dutch border during that time.
• A sufficiently high salary:
  • Your annual salary, after the 30% ruling (i.e., 70% of your gross salary) is applied, must exceed the required minimum set by the Dutch government.
  • If you are under 30 and hold a master’s degree, your net annual salary must exceed the required minimum for the year.

How does the tax discount work?

To be precise, the ruling doesn’t reduce the tax on your salary, but reduces the taxable portion of your salary. Taxes are calculated on 70% of your salary, and the remaining 30% is received tax-free (as long as you meet the required salary threshold).

For example, with a gross salary of €10,000 per month, taxes are calculated only on €7,000 (10,000 – 30%), and the remaining €3,000 (30% of €10,000) is paid to you tax-free, simply added to your net salary.

In this example, without the ruling, you would take home around €5,921 (after deductions, based on 2025 data). With the ruling, your take-home pay would be around €7,602.

How can you apply for the ruling?

The 30% ruling is requested by your employer through the Dutch tax office. Since 2019, the ruling is granted for 5 years and can only be used by one employer for one specific employee. This means that if you change employers, your new employer must apply for the ruling again.

It’s recommended to submit your application for the ruling within the first 4 months of your arrival, so you can start benefiting from it right away with your first salary. If you apply later, it’s still possible, but the ruling will only start applying from the following calendar month after your application.

If you have any questions about the ruling or would like to ask us something, we have a comprehensive FAQ on our website that covers the 30% ruling—feel free to check the answers there or contact us!