The 30% Ruling in 2025: Conditions, Benefits and Recent Changes

The Netherlands aims to remain an attractive destination for international talent. One of the key tax facilities supporting this goal is the 30% ruling. This provision allows Dutch employers to pay part of a foreign employee’s salary tax-free. In this blog, we’ll explain how the scheme works, what conditions apply in 2025, what’s changed in recent years, and how much financial benefit it can provide. Naturally, we’ll also show you how Suijkerbuijk+Co can support you with both application and implementation.
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What is the 30% ruling?

The 30% ruling is a tax exemption available to employees who are recruited from abroad to work in the Netherlands. Under certain conditions, employers may pay up to 30% of the gross salary tax-free as a reimbursement for so-called extraterritorial costs—expenses incurred as a result of living and working outside one’s home country, such as relocation costs, higher housing expenses, and additional travel costs. The ruling makes it more attractive for foreign professionals to work in the Netherlands and gives employers an edge in the competitive international talent market.
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30% Ruling Eligibility Criteria in 2025

To qualify for the 30% ruling in 2025, the following conditions must be met:

- Recruited from abroad: The employee must have lived more than 150 km from the Dutch border for at least 16 of the 24 months prior to the start of employment.
- Specific expertise: Demonstrated by a minimum salary threshold. In 2025, the gross annual salary requirement is approximately €48,060 (excluding the tax-free allowance).
- Maximum duration: The benefit applies for a maximum of 5 years (60 months).
- Timely application: The request must be submitted within 4 months of the employment start date to apply retroactively from day one.

What’s Changed Recently?

The 30% ruling has been amended several times in recent years. Here are the most important updates:
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1. Phased Reduction of the Tax-Free PercentageSince 1 January 2024, the tax-free percentage is gradually reduced over time:First 20 months: 30%Second 20 months: 20%Final 20 months: 10%
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2. Cap Based on WNT (Top Income Standard)From 2023 onwards, the tax-free portion is capped. In 2025, this cap is €235,000 (based on the Dutch WNT). That means the maximum tax-free allowance is €70,500 per year.
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3. Abolition of Partial Non-Resident Tax StatusAs of 1 January 2025, employees benefiting from the 30% ruling can no longer opt for partial non-residency status. This means they will be fully liable for Dutch taxes, including Box 2 and Box 3 (investment and savings income). A transitional rule applies for existing cases until 2026.
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What’s the Financial Benefit of the 30% Ruling?

Let’s look at two simplified examples showing the difference with and without the 30% ruling:

Example 1:
Gross annual salary of €100,000
Without 30% ruling
Taxable income: €100,000
Estimated income tax: ~€43,000
Net income: ~€57,000
With 30% ruling (first 20 months, 30%)
Tax-free portion: €30,000
Taxable income: €70,000
Estimated tax: ~€29,000
Net income: ~€71,000
Difference: approx. €14,000 more net per year

Example 2:
Gross annual salary of €250,000 (capped at €235,000)
Without 30% ruling
Taxable income: €250,000
Income tax: ~€116,000
Net income: ~€134,000
With 30% ruling (first 20 months, 30% up to €235,000)
Tax-free: €70,500
Taxable income: €179,500
Income tax: ~€82,000
Net income: ~€168,000
Difference: approx. €34,000 more net per year

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Benefits for Both Employees and Employers

For employees:
‍Higher net income without needing a higher gross salaryNo need to submit receipts or claim actual extraterritorial expensesTransparent and straightforward tax scheme

For employers:
More attractive employment packages for international hiresPotentially lower total compensation costsEasy to implement in payroll administration

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Suijkerbuijk+Co Helps You Get It Right

The 30% ruling can offer substantial benefits—but only if applied correctly. Mistakes in timing or salary thresholds can lead to missed opportunities. At Suijkerbuijk+Co, we help you:

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✅ Assess eligibility accurately

✅ Submit a successful application to the Dutch Tax Authorities

✅ Integrate the ruling into payroll administration

✅ Stay compliant with any future changes or transitions.