30 % Tax Ruling in the Netherlands

Moving to another country for your job is time-, energy- and money-consuming. And even when you’re there, there are taxes to handle and still some extraterritorial costs to be made. As you might know, the Netherlands has a complicated tax system, which can make it hard to navigate. 

But good news! The Netherlands has tax benefit rules that can apply to you or your employees. One of them is the 30 percent tax ruling, which grants a substantial reduction on the taxable income. Dutch Employer of Record is here to help and guide you through this process. With the help of our native employees, we will take all the paperwork and hassle out of your hands and you will receive a higher net income.

What are the benefits of the 30% ruling with Dutch Employer of Record?

  • More net income for your or your employees
  • Hassle free with one point of contact
  • Full-service HR & payroll agency to assist you

What is the 30% ruling?

Basically, the 30% tax rule in the Netherlands is tax-advantaged for highly skilled migrants, who move here for a specific employment role, intended as compensation for extra costs. This rule means that an employer has the possibility to grant 30% of the salary tax-free. The application of the 30% rule, also called the 30% facility or 30% reimbursement ruling, will result in a higher net income. These costs do not have to be explained or verified to the employer to receive the tax advantage.

Conditions for 30% ruling

To be able to claim the 30% ruling, you’ll have to meet the following conditions:

  • You have to be in paid employment under contract
  • You were recruited outside of the Netherlands or you have been sent to the Dutch branch of your company from another country
  • You possess a specific expertise, preferably one that is hardly or not even found on the Dutch labor market
  • You lived for more than 16 months outside of the Netherlands, at more than 150 km from the Dutch border in the two years before your first working day in the Netherlands
  • Your taxable wage must be over €39.647 on an annual basis in 2022. In 2021 this was €38.961
  • If you have a master’s degree and are younger than 30, your taxable salary must be more than €30.001 on an annual basis in 2022, for 2021 this was €29.616

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Cover extraterritorial costs when moving to the Netherlands

The 30% tax reduction rule in the Netherlands is meant to alleviate some of the financial stress or grapple of moving to this beautiful country. Thanks to the 30% facility you can have some extra spending room for (unexpected) extraterritorial costs. Are you wondering what these extraterritorial costs might be? We have got you covered with this summary:

  • Extra costs of living, due to differences in prices for housing, meals, gas, water and electricity
  • Fees to apply for or convert official personal papers, like for instance driver’s licenses or visas
  • Costs to get familiar with the Netherlands, such as trips to look for housing or schools for your kids
  • Vaccinations or medical examinations to stay here
  • Initial costs for housing or even double costs if you keep your home in your home country
  • Storage for your household effects, travel costs to your home country for family visits, training costs to learn the Dutch language or costs to apply for a social security exemption

Fun facts of the 30% tax ruling in the Netherlands

  • You can benefit from the 30% ruling for a maximum of five years
  • There is the possibility to honor the 30% ruling for part-time employment
  • Next to the 30% ruling, schooling fees for children from employees can be issued as free reimbursement under special conditions
  • Under the 30% ruling a foreign drivers license can be swapped with a Dutch driver’s license for employees and their families
  • Dutch Employer of Record can help you navigate all the administrative difficulties and make all the above come true for your employees

Start the application procedure here!

You or your employees could benefit greatly from the 30% facility while working in the Netherlands. Dutch Employer of Record is there to help you with the procedures and application process to implement this tax benefit. Curious about how we could help you? Start the application procedure here! Do you have any other questions on how to employ staff in the Netherlands? Don’t hesitate and get in touch.

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