The 30% ruling in 2026, and the 27% reduction from 2027

What is the 30% ruling?

The 30% ruling is a tax-free expat allowance for foreign employees recruited from abroad. It is designed to reimburse the extraterritorial costs of relocating to and working in the Netherlands (extra housing, travel, the cost of living abroad) without having to itemise every receipt. Instead of tracking actual costs, the employer simply pays up to 30% of gross salary free of Dutch wage tax.

Crucially, the ruling is available only through an employee-employer relationship with a Dutch withholding-agent employer. It is a payroll benefit, not a personal tax break you can claim independently. That single fact drives most of the founder decisions below: you need to be on a Dutch payroll for the ruling to exist at all.

2026 status

For 2026 the headline figures are unchanged from recent years, with one important reminder that the maximum duration has already been cut:

• Rate: 30% maximum tax-free reimbursement.
• Duration: 5 years maximum, down from 8 years before the 2024 reforms.
• Salary cap: roughly €262,000 for 2026, indexed annually (it was €246,000 in 2025), so the 30% applies only up to that capped salary. Verify the current cap before relying on it.
• Minimum salary threshold: approximately €46,660 taxable, which grosses up to around €66,660 with the 30% on top, for employees over 30. A reduced threshold applies to under-30s holding a master's degree.

2027 change: 30% → 27%

The single biggest thing to plan around is the rate cut taking effect on 1 January 2027:

• Effective date: 1 January 2027.
• Flat rate: a single 27%, not a stepped reduction.
• Scope: it applies to new rulings and to most existing rulings.
• Transitional rule: the 30% rate is preserved for foreign employees who have been under the ruling continuously since the last 2023 payroll period.

The 2024 plan originally legislated a stepped 30/20/10 phasing, which would have cut the allowance more aggressively over time. The 2025 government reversed that in favour of the simpler single reduction to 27% in 2027. As of May 2026 no further changes are tabled, but because these figures move with each annual Tax Plan, reverify before taking final advice.

Eligibility tests

There are three tests to satisfy, and a founder using their own BV typically clears all three, but each is worth understanding in its own right.

The 150 km test

You must have lived more than 150 km from the Dutch border for more than 16 of the 24 months before your first Dutch working day. This excludes most Belgians, some Germans, and some residents of northern France, on the logic that they are not genuinely relocating far. If your prior address is borderline, this is the test most likely to trip you up.

The specific-expertise test

The ruling requires scarce expertise on the Dutch labour market. In practice this is operationalised through the salary threshold: if your salary meets the minimum, you are deemed to have specific expertise. Scientific researchers and certain academics have no salary minimum and qualify on the nature of their role.

The employee test

You must be employed by a Dutch withholding-agent employer, and a Dutch BV, including your own, qualifies. A sole proprietorship (eenmanszaak) or freelance ZZP arrangement does not qualify, because there is no employer paying you wage tax. This is the decisive point for founders choosing an entity structure: if the 30% ruling matters to you, the BV is the route that keeps it on the table.

Apply within 4 months

File the application within 4 months of your Dutch start date and the ruling backdates to that start date, so you capture the benefit from day one. Apply later and it takes effect prospectively only, meaning you lose the back-pay for the intervening months. For a relocating founder, getting the BV, the payroll, and the application lined up in the first quarter is what protects the full benefit.

The math: a worked example for a founder

Say you are a foreign founder relocating to the Netherlands, and your Dutch BV pays you €100,000 gross. The numbers below are illustrative, your exact figures depend on credits and the year's brackets, but they show the order of magnitude.

Without the ruling, Box 1 tax and social charges on €100,000 come to roughly €40,000–€42,000, leaving about €58,000–€60,000 in hand. With the 2026 ruling, €30,000 is tax-free, leaving €70,000 taxable, tax and social charges of around €25,000–€27,000, and take-home of roughly €73,000–€75,000. Running the same example under the 2027 rate gives €27,000 tax-free, €73,000 taxable, and take-home of about €72,000–€74,000. The 2027 reduction is meaningful, but it is not catastrophic: you are talking low single thousands of euros on a six-figure salary, not the loss of the benefit.

Interaction with DGA salary

If you are a director-shareholder, the 30% ruling sits on top of the gebruikelijk loon (customary-salary) rules, and the two interact in ways worth planning for.

• The DGA customary-salary floor (€58,000 in 2026) sits just below the 30%-ruling salary threshold for over-30s. Some founders deliberately top their DGA salary up above roughly €67,000 to clear the threshold and maximise the tax-free portion, which has knock-on effects on corporate tax (Vpb) and Box 2.
• The 30% portion is also exempt for social-charges purposes in many cases, which further boosts the net benefit beyond the headline income-tax saving.

Because the salary you set drives both your DGA position and your 30%-ruling benefit, it is worth modelling them together. The mechanics of the customary-salary rule, and how the management-fee route works in a Holding, are covered in our DGA salary guide and the wider Dutch BV tax 2026 guide.

When the ruling stops mid-employment

The ruling is tied to a specific employment and a continued residence pattern, so it can end before the 5-year window is up:

• You change employer: the ruling continues only if the new employer reapplies within 3 months of the gap.
• You exceed the 5-year window: the ruling ends, with no extension available.
• You move more than 150 km away (or otherwise stop meeting the conditions): the ruling can lapse.

Documentation founders should keep

If the Belastingdienst ever reviews the ruling, you want the paper trail ready. Keep:

• The original 30%-ruling grant letter from the Belastingdienst.
• Annual payroll records showing the 30% portion as a separate line item.
• Evidence of continued Dutch residency throughout the period.

If you are still deciding whether to relocate at all, note that the ruling is one piece of a larger move: a US founder, for instance, should weigh it alongside the DAFT visa route (the Dutch-American Friendship Treaty residence permit), and any relocating founder will want payroll set up correctly, which is part of our accounting service.

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