The 30% ruling in The Netherlands has changed for 2025. Global payroll professionals should take action to remain compliant with their policies and practices regarding certain expatriate employees.
The 30% ruling in The Netherlands (called the “30% facility” by the Dutch Tax Office (“Belastingdienst”)) applies to inbound and outbound employees. If qualifying criteria such as a minimum gross salary are met, employees benefit from a lower effective payroll tax rate, as a maximum of 30% can reduce their taxable income. In recent years, the Dutch government and policymakers have discussed the 30% ruling, leading to confusion about its status.
The announced changes for 2025 have been adopted by the House of Representatives (“Tweede Kamer”), and the Senate (“Eerste Kamer”) has also approved them as part of the tax plan for 2025. The changes are as follows:
- Effective 1 January 2025, the maximum percentage remains 30%, but the qualifying salary changes. The qualifying salary is €46.660 and €35.468 for those with a Master’s Degree and aged 30 years or younger. Both qualifying salaries may still be subject to indexation.
- Effective 1 January 2027, the maximum percentage is reduced to 27%, and the qualifying salary is further increased to €50.436 and €38.338, respectively (also subject to indexation).
There will be transition arrangements for those employees who are already benefiting from the 30% ruling before 2024. These employees will keep benefiting from 30% (instead of 27%) and their current qualifying salary (although subject to indexation), beginning 1 January 2027, if their 30% ruling remains granted.
Possible Changes to HR and Payroll Policies
With the changes mentioned above, additional monitoring processes should be put in place for organisations with employees who benefit from the 30% ruling. The applicability of the 30% ruling, the qualifying salary, and the maximum percentages will be changed, while those who fall under the transition arrangements may not. Additionally, communication with employees is advised to clarify what these changes mean to them.
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Max van der Klis-Busink, BBA, is the Owner of Passion For Payroll and Vice President of Global Strategy on PayrollOrg’s Board of Directors.
