Relocating to a new country comes with many challenges and expenses, but the Netherlands has benefits in place to help make the transition smoother. One way the country supports highly educated foreign employees (expats) coming to work in the Netherlands is through the 30% ruling—a tax benefit designed to help offset the costs of relocating and ease the process of settling in.
This ruling applies to qualifying expats who meet certain conditions, such as being recruited from abroad and meeting certain salary requirements.
As of 1, January 2025 updates to the ruling have been implemented, these provide certainty on how expats can expect to benefit from it in the years to come.
What is the 30% Ruling?
The 30% ruling is a tax incentive that allows employers to reimburse up to 30% of your gross salary tax-free to cover the additional costs of living abroad. This can significantly boost your take-home pay and ease the financial pressures of relocating.
For expats, this ruling provides some peace of mind as they set up their new homes in the Netherlands. Whether it’s helping to cover the costs of new furniture, extra clothing you might need (read: waterproof coats for both summer and winter), buying bikes (more bikes than you’d expect—like kids’ bikes, bakfietsen, and bike seats for little ones), flights to visit family back home, or saving toward buying a house, the financial boost is definitely welcome during those first years.
Key Update for 2025
You might have heard about a proposed step-by-step reduction to the 30% ruling. If implemented, this would have gradually lowered the tax-free percentage from 30% to 10% over five years.
The good news for this year is that the reduction has been cancelled. Expats who qualify for the 30% ruling will continue to receive the full 30% tax-free reimbursement for the entire five-year period.
If you are curious about more information about the 30% ruling you can visit these resources to read some more. For complete information about the ruling and how companies must implement it according to the government requirements, you can visit this government resource for more information.
Looking Ahead: What’s Next for the 30% Ruling?
While the cancellation of the proposed reduction is welcome news, there is a small potential change planned for the future. As of January 1, 2027, the maximum tax-free reimbursement under the 30% ruling is proposed to decrease slightly from 30% to 27%.
It’s important to note that proposed updates to the 30% ruling and other policies are often announced on Prinsjesdag (Prince’s Day). This day occurs on the third Tuesday of September (in 2025, it falls on September 16). These proposals, if approved, are typically implemented starting January 1st of the following year. Read more about this important day here.
How We Support You
If you’re thinking, “Navigating the details of the 30% ruling seems complicated,” you’re not wrong, but rest assured you don’t have to navigate it alone. We provide specialized support to ensure your application process is smooth and stress-free.
Thanks to our fast-track application service, the 30% ruling is processed much faster than the standard timeline, which can take up to six months. And the best part? Once approved, it applies retroactively from your first salary in the Netherlands, so you won’t miss out on the tax benefit while waiting for approval.
With our years of experience helping companies and expats navigate the process, you can trust us to handle the details so you can focus on your new adventure or on supporting your new employee.
Conclusion
Relocating to a new country is a big step, and sometimes an expensive one, but the Netherlands offers practical support to help expats feel at home and settle with confidence. The recent updates to the 30% ruling provide clarity for 2025 and beyond, ensuring expats can continue to benefit from this tax advantage as they establish their lives here.
If you have questions or need guidance, our team is here to help every step of the way.