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The 30% ruling

One incentive for highly skilled foreign workers is the 30% ruling, which means that 30% these migrants' salary is not considered taxable. In practice this means that the effective maximum tax paid is approximately 36% – well below the level paid by native workers in a similar position. The 30% ruling applies to all foreign workers, even those from an EU member state.

To be eligible for the 30% ruling tax rate the following conditions must be met:

  • Both the employer and employee must agree to apply for the 30% ruling (as the ruling decreases the employee's taxable salary it may interfere with some other entitlements)

  • The employee must work in a salaried position whereby the employer calculates and deducts income tax/payroll tax from the employee's salary

  • The employee must have been either transferred or recruited directly from outside of the Netherlands

  • The employee must not have lived within 150km of a Dutch border for more than 18 months in the 2 years prior to being hired

  • The employee's taxable salary must be at least €36,705. Exceptions include employees under 30 years old with a Master's degree – whose salary must be €27,901 – as well as scientific researchers, science teachers/lecturers, and doctors in training, for whom there is no minimum salary

  • The employee must have skills,experience, and/or education that is rare in the Netherlands