What Employers Need To Know about Netherlands’ 30% ruling 2022

Tax Deductions in the Netherlands 

The 30% ruling is a Dutch tax exemption for employees who were hired abroad to work in the Netherlands. Upon meeting various conditions, employers can pay 30% of an employee’s salary as a tax-free allowance.

This is considered an allowance for extraterritorial expenses, which do not need to be specified, as such, no record-keeping is required. The 30% ruling facility can only be applied to an employee when the employer has received written approval from the Dutch tax office. The taxable salary of an employee should always meet the minimum income level set for that particular year.

  • 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:
    Must be an employee
    To be eligible for the 30% ruling the individual needs to be employed. For those who work as self-employed, it is not possible to claim the 30% ruling. However, if a legal entity is set up like a Dutch B.V.,the individual becomes an employee of that company, they can be 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. This agreement in writing can be included as a clause or as an addendum to the employment contract.
  • The employee has to transfer or be recruited from abroad to a Dutch employer
    The employee can only be eligible for the 30% ruling if they are transferred or recruited from abroad. They have to prove that they were residing outside the Netherlands before their 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.
  • 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.

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.
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.

  • 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 employees change jobs they 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.


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