30% ruling changes in 2027: What employers & internationals should know

The Dutch 30% ruling, officially known as the Expat Scheme (expatregeling), provides a tax-free allowance to qualifying international employees in the Netherlands. From January 1, 2027, major reforms will take effect: the allowance cap drops from 30 percent to 27 percent alongside higher salary thresholds, though transitional rules mean the impact will vary across payrolls.

What changes to the 30% ruling in 2027?

Until the end of 2026, the maximum tax-free allowance remains 30 percent. The upcoming 27 percent cap will apply for the remainder of an employee's five-year ruling, provided they continue to meet the statutory criteria. 

Higher salary thresholds will also apply to employees who began using the scheme from January 1, 2025, onwards. Baseline statutory thresholds were established at 2024 price levels:

• 50.436 euros for the general salary threshold
• 38.338 euros for qualifying employees under 30 with an academic master's degree

Because these benchmarks are indexed annually, the applicable 2027 figures will be higher. Employers should confirm the finalised figures issued by the Dutch Tax and Customs Administration (Belastingdienst) before running their first 2027 payroll.

Who continues to benefit from the 30 percent rate?

Crucially, transitional arrangements create three distinct categories of beneficiaries:

1. Pre-2024 arrivals: Employees who already utilised the 30% ruling prior to January 1, 2024, generally retain the 30 percent tax-free allowance for their ruling's remaining duration, subject to existing annually indexed salary floors.
2. The 2024 cohort: Those who started using the scheme during 2024 will see their maximum allowance drop to 27 percent from January 1, 2027, but remain under the older, lower salary thresholds.
3. Post-January 1, 2025 arrivals: Employees granted the ruling from January 1, 2025, face both changes from 2027—the 27 percent allowance cap and the new, higher salary thresholds.

This means that employers should check when the 30% ruling first became applicable to each employee rather than assuming that the same 2027 rules apply to everyone.

End of partial non-resident taxpayer status

Since January 1, 2025, ruling holders have been unable to elect partial non-resident taxpayer status, which previously exempted foreign savings and investments (Box 3) and substantial shareholdings (Box 2) from Dutch tax.

Transitional relief permitted individuals who secured the ruling in 2023 to retain this status through the end of 2026. From January 1, 2027, this grandfathering ends entirely. All affected internationals will become subject to Dutch tax on their worldwide Box 2 and Box 3 assets, subject to bilateral double-tax treaty relief.

Qualifying for the scheme & calculating salary thresholds

The basic eligibility criteria remain essential. To qualify for the Expat Scheme, an employee must:

• Be in paid employment
• Be recruited from abroad or seconded to the Netherlands
• Possess specific expertise that is scarce or unavailable on the Dutch labour market
• Satisfy the applicable salary requirement, unless an exemption applies

Employer and employee must agree on the allowance in writing, submitting the application to the Dutch Tax and Customs Administration (Belastingdienst) within four months of the employee’s start date for retroactive effect. 

Later applications take effect only from the following month. Researchers, designated academic staff, and medical specialists in training are exempt from salary thresholds.

Another decisive condition is the 150-kilometre rule. During the 24 months preceding their first working day in the Netherlands, the employee must have lived more than 150 kilometres from the Dutch border for at least 16 months.

How the taxable salary calculation works

The statutory threshold applies to the employee’s taxable salary after deducting the tax-free allowance. That taxable salary must exceed the threshold, not merely equal it.

Gross earnings above the threshold do not guarantee the full 27 percent allowance . For instance, an employee earning 70.000 euros could receive up to 18.900 euros tax-free, leaving 51.100 euros in taxable pay . If that 51.100 euros drops below the year's indexed salary threshold, the tax-free allowance must be reduced to maintain the required taxable floor 

Concessions for master’s degree holders under 30

A reduced salary threshold applies to certain young professionals under the age of 30 who hold:

• A Dutch academic master's degree
• An equivalent qualifying foreign academic degree

This lower benchmark applies until the end of the month in which the employee turns 30. From the following month onward, the standard salary floor takes effect. This concession threshold will also rise from January 1, 2027, for employees subject to the post-2025 rules.

Statutory salary caps under the WNT

The scheme is also capped by the salary ceiling under the Top Income Standardisation Act (Wet normering topinkomens, WNT).

In 2026, this ceiling is 262.000 euros, an amount updated annually. The WNT ceiling must not be confused with the minimum salary requirement. While the minimum threshold proves scarce expertise, the WNT cap limits the maximum salary basis against which the tax-free allowance may be calculated.

Because the maximum rate drops to 27 percent from 2027, for staff outside the transitional arrangements, the maximum tax-free allowance will also be calculated using the lower percentage. In 2026, the maximum tax-free allowance is 78.600 euros (30 percent of 262.000 euros). The WNT cap for 2027 is yet to be announced.

Reach out to AZ Legal about the upcoming 2027 tax changes

Critical compliance traps & annual review rules

Receiving a positive decision for the Expat Scheme does not mean the salary criteria are checked only once.

Employers must verify ongoing compliance throughout the period the scheme is used. Because statutory salary floors are indexed annually, requirements rise each year. If an employee’s salary falls below the threshold, the scheme no longer applies for that calendar year, requiring retrospective adjustments to filed payroll tax returns.

The Dutch Tax and Customs Administration (Belastingdienst) states that an expired ruling cannot be restored if salary increases later. If a salary shortfall is expected, the employer and employee can agree beforehand to reduce the tax-free allowance so that the taxable salary remains compliant.

When an employee starts or leaves employment mid-year, their salary is pro-rated to an annualised basis. Concessions also apply when earnings drop temporarily during statutory leave, such as parental or maternity leave.

Scheme duration & the five-year cap

The Expat Scheme can be granted for a maximum of five years, as stated in the official decision from the Belastingdienst. Previous periods of Dutch residence or employment in the preceding 25 years can reduce this duration.

Switching from 30 percent to 27 percent does not restart or extend this five-year period. For staff moving to the 27 percent rate in 2027, the lower percentage applies strictly for the remainder of their existing ruling.

Tax thresholds versus IND residence criteria

Restructuring compensation packages must also account for separate Immigration and Naturalisation Service (IND) criteria when workers hold highly skilled migrant or EU Blue Card status.

In 2026, the monthly IND thresholds stand at 5.942 euros gross for highly skilled migrants aged 30 or over (and EU Blue Card holders) and 4.357 euros for those under 30, excluding holiday allowance. These immigration benchmarks operate independently of the 30% ruling: satisfying one does not automatically meet the other, and dropping below IND thresholds can directly endanger an employee’s residence permit.

Checklist: How employers & employees can prepare for 2027

To navigate the 2027 reforms smoothly, organisations should audit their international payroll well before January 1, 2027:

• Audit active rulings to identify which transitional regime applies to each employee
• Confirm whether the applicable allowance cap remains 30 percent or drops to 27 percent
• Verify whether taxable salary exceeds the new 2027 indexed thresholds
• Review employment contracts where total remuneration assumes an ongoing 30 percent exemption
• Cross-check adjusted packages against IND salary criteria to protect legal residence

International employees will feel these adjustments directly in their monthly net income. Reviewing the impact ahead of time ensures both sides avoid unexpected tax liabilities before the first 2027 payroll cycle.