The 30% ruling will be capped as of 2024: What are the consequences?

The 30% ruling will be capped as of 2024: What are the consequences?

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The Dutch parliament recently accepted a new proposal regarding the Dutch wage tax law. The proposal includes a change in the current 30% ruling. The 30% ruling will be capped as of January 1, 2024. In this article, BDO provides insight into the fiscal consequences of the new rule.

The 30% ruling

The 30% ruling is a tax facility meant for employees who are recruited from outside the Netherlands to work in the Netherlands (and be subject to Dutch wage tax). When the employee meets certain conditions, they can receive a maximum of 30% of their remuneration as a tax-free allowance. This is supposed to compensate for extraterritorial costs. Extraterritorial costs are the costs that an employee may make by working in a different country.

An employee can apply for the 30% ruling when the following conditions are met:

  • The expat is recruited outside of the Netherlands
  • The expat has a specific expertise that is not or hardly found on the Dutch labour market
  • The old place of residence(s) is at least 150 kilometres from the Dutch border for more than 16 out of the last 24 months before the first working day in the Netherlands

If the employee meets the abovementioned conditions a joint request by employer and employee for the 30% ruling can be filed with the Dutch tax authorities.

Maximum salary

The upcoming change in the legislation results in a maximum amount of the tax-free benefit. As of January 1, 2024, the amount will be capped, which means that the ruling may not be applied to employment income exceeding the “WNT-norm” or “Balkenende-norm”. The WNT-norm for 2023 is 223.000 euros, resulting in a maximum tax-free allowance of 66.900 euros.

In case an employee is only able to apply the ruling during a part of the year, the WNT-norm has to be prorated. Situations like this occur in the year of arrival in the Netherlands or in the year the term of grant expires.

Reimbursement of actual extraterritorial costs

The limitation is not applicable to the reimbursement of the actual extraterritorial costs. It might be more beneficial for the employee to reimburse the actual costs instead of applying the 30% ruling.


There is an exception regarding the capped maximum tax-free amount of the 30% ruling. For employees who benefitted from the 30% ruling during 2022, there will be a transitional regime. Applicants who are able to apply the 30% ruling to their salary up until December 31, 2022, will be able to get a two-year extension on the cap. Their income will be capped from January 1, 2026, instead of January 1, 2024.

In case the 30% ruling is applicable from January 1, 2023, the exception will not be applicable.

Tax relief

It is possible that the remuneration of an employee is subject to taxation in different countries (including the Netherlands). The employee has a salary split. In principle, the 30% tax-free allowance will be calculated by not taking into account the part of the remuneration for which the employee can claim tax relief for double taxation. With the introduction of the new legislation, the 30% tax-free allowance in a situation with a salary split may change.


An employee lives and works in the Netherlands. The employee works a part of their time (25%) in Germany, where their employer is established. They have a salary split between the Netherlands and Germany. The total remuneration of the employee is 400.000 euros. Based on a tax treaty with Germany, 25% of the tax base will be taxed by them. What remains will be taxed by the Netherlands (75%).

At the moment, the tax-free allowance will be calculated as follows. The total remuneration is 400.000 euros. The 30% allowance will be 120.000 euros. When the tax relief to avoid double taxation will be included, the maximum 30% allowance will be 90.000 euros (since 25% is taxed in Germany and not the Netherlands).

However, when the maximum wage based on the WNT-norm is 223.000 euros, the maximum 30% allowance will be 30% of 223.000 euros (66.900 euros). So, this will be the tax-free allowance in this situation.

The maximum amount to be considered is the lower of the two ceilings mentioned above. In the situation that a larger part of the remuneration is taxed in another country, a lower tax-free allowance can be paid, since the lowest amount of the above two calculations will apply.

Important to know

The capping of the 30% ruling is important. It enhances an increased Dutch income tax liability for employees with a high income. As a result, employees may receive less than 30% of their income as a tax-free amount per January 1, 2024, if their annual income exceeds the “Balkenende-norm”. The capping also has an influence on the amount that will be applicable as a result of (the prevention of) double taxation.

Whether the capped income for the 30% ruling will have an impact on your situation depends on your personal circumstances. If you want to know if your tax position will change, contact BDO now.

Mia van Dijk


Mia van Dijk

Mia van Dijk is working at the Amstelveen office of BDO. After studying fiscal economics and tax law at the University of Groningen she specialized in the international income...

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SyedhamjathSyed... 08:16 | 11 August 2023

Most of the foreign company bring employees into NL under net pay to fit into regulations so we are paid less than locals and employee's 30% is beneficial to employer. One of the reason expat choose NL and would like to settle is because of 30% ruling. When it shrinks, our confidence will also shrinks and the reality would hit harder 49% income Tax because majority of expat are ICT sector highly skilled labour and they wouldn't agree to pay half of their fortune for rest of the life. Infact more people are leaving NL due huge income tax, higher inflation, less jobs for highly skilled labour and sometime hiring managers perferd Dutch local even if you speak Dutch or job is open for expats.