30% Ruling
The 30% ruling is a tax arrangement for employees who come from abroad to work in the Netherlands. If you meet the conditions, your employer may pay 30% of your gross salary tax-free as compensation for extraterritorial costs – think of relocation costs, double housing, and the higher cost of living in the Netherlands. The ruling applies for a maximum of 5 years, but was reduced from 2024: in the first year 30% can still be reimbursed tax-free, in year 2 this drops to 20%, and in years 3-5 to 10%. You must have lived at least 150 kilometers from the Dutch border before coming to the Netherlands, and your salary must exceed a minimum threshold (approximately €46,000 in 2025, or €35,000 for scientific staff).
Example
You come from Spain to work in the Netherlands with a gross annual salary of €70,000. In the first year, €21,000 (30%) can be reimbursed tax-free. You pay income tax on the remaining €49,000. Without the ruling, you'd pay tax on the full €70,000. The difference can be €7,000-€10,000 net per year.
Why does this matter?
Did you move from abroad to the Netherlands for work? The 30% ruling is one of the biggest tax benefits available. Apply as soon as possible together with your employer – the application must be submitted within 4 months of starting your employment.