Dutch 30% ruling explained for Americans moving to the Netherlands

The Dutch 30% ruling is a tax break for people who move to the Netherlands for work, and it lets a qualifying employee receive part of their salary tax-free. It's officially called the expat scheme, but many people still call it the 30% ruling.

This benefit can lower the income tax you pay on your salary, but it's not automatic. Your employer has to take part, and you have to meet a set of eligibility rules. This guide explains how it works for Americans moving to the Netherlands for a job.

We'll also introduce the Wise account, which allows you to send, spend, and receive your money across the globe in over 40 currencies – all at the fair mid-market rate.

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What is the Dutch 30% ruling and how does it work?

When you move to another country for a job, you take on extra costs, such as flights and setting up a home in a new place. The 30% ruling helps offset those extra costs, which the Dutch call extraterritorial costs, by letting your employer pay part of your salary without tax.

With the ruling in place, your employer can treat up to 30% of your gross salary as tax-free in 2026, and you pay Dutch income tax only on the rest. The maximum is 30% for 2026, but from 1 January 2027 it's scheduled to drop to 27%.¹

There are two ways an employer can cover these costs:

• The employer applies the fixed percentage, paying up to 30% of your salary tax-free without anyone adding up receipts
• The employer instead reimburses the extra costs you incur, tax-free, based on receipts, which can benefit people with unusually high moving costs

Many people use the percentage route because it's simpler.

Keep in mind that the 30% ruling isn't a visa or a residence permit, and it's not the same as highly skilled migrant status. You can have a work permit and still need to apply for the ruling.

Who qualifies for the Dutch 30% ruling?

You generally qualify when:¹

• You're in paid employment with an employer that runs Dutch payroll
• You were recruited or transferred from outside the Netherlands
• You have expertise that is scarce in the Dutch job market, which is measured mainly by your salary
• You haven't lived in or near the Netherlands recently, under a distance test
• The Dutch Tax Administration has granted you a written decision

The sections below walk through these conditions in more detail.

Employment and recruitment from abroad

The ruling is for employees, so you need a job with an employer that withholds Dutch payroll tax. That can be a Dutch company or a foreign company with a Dutch payroll. You can't be self-employed.

On top of that, the employer has to recruit or transfer you from abroad. You must have been living outside the Netherlands when you were hired or moved for the role. Someone already living in the country who then finds a Dutch job generally doesn't qualify.

The 150-kilometer residence test

To qualify for the 30% ruling, you must have lived more than 150 kilometers from the Dutch border for more than 16 of the 24 months before your first working day in the Netherlands.¹

For an American moving from the US, this condition is rarely a problem.

Salary and expertise requirements

"Scarce expertise" sounds subjective, but in practice the Tax Administration measures it with a salary threshold. If your pay is high enough, your expertise counts as scarce.

The figure it checks is your taxable salary after the tax-free allowance is taken off, and it's indexed each year. The 2026 thresholds are:

Because these figures are indexed, they usually rise a little each year, so check the current numbers on the Tax Administration's eligibility page.

Previous work or residence in the Netherlands

If you've lived or worked in the Netherlands before, that history can eat into the ruling. The Tax Administration looks back over the previous 25 years, and earlier periods you spent living or working in the country are subtracted from your 5 years. ²

How to apply for the Dutch 30% ruling

You don't apply for the 30% ruling on your own. It's a joint application with your employer that you send to the Dutch Tax Administration.

1. Confirm eligibility and employer participation

Check that you qualify for the Dutch 30% ruling and confirm your employer is willing to apply. An employer doesn't need a special sponsor status to apply, but they do need to run Dutch payroll and agree in writing to use the ruling.

2. Complete the joint application

You and your employer fill in the Tax Administration's 30% facility application form together and attach the evidence it asks for.

That usually means your signed employment agreement showing your start date and salary, proof that you lived more than 150 kilometers from the border before you started, and, if you are relying on the under-30 rule, a copy of your qualifying master's degree.

3. Submit the application within 4 months

If the application reaches the Tax Administration within 4 months of your first working day, the ruling can apply from that first day. If you miss the 4 months, it starts only from the month after you apply, and you lose the benefit for the gap in between.¹²

This deadline is separate from how long the Tax Administration takes to decide whether or not to approve you, which it gives as around 8 weeks.¹²

4. Review the official decision

The Tax Administration sends a written decision, called a beschikking. Check the start date, end date, and total approved period so you can confirm that your employer applies the tax-free portion correctly on your pay stubs.

How does the ruling affect your Dutch taxes and take-home pay?

How the tax-free allowance is calculated

The 30% is a ceiling, not a set payment.

Your employer can pay up to 30% of your salary tax-free, but the arrangement has to leave your taxable salary at or above the yearly threshold, which is 48,013 EUR in 2026.³

If paying the full 30% would push your taxable pay below that line, the tax-free part is trimmed. In practice, higher earners get the full 30%, and people closer to the threshold get less.

For example, on a gross salary of 80,000 EUR, your employer could treat up to 24,000 EUR, which is 30%, as tax-free, leaving 56,000 EUR as taxable salary. Because 56,000 EUR is above the 48,013 EUR threshold, the full 30% works, and you pay Dutch income tax only on the 56,000 EUR.

There is also a cap on the salary the allowance can apply to. In 2026, that cap is 262,000 EUR, so the most that can be paid tax-free in a year is 30% of that figure, which is 78,600 EUR.³

How it interacts with Dutch tax brackets

The tax-free allowance lowers your taxable salary, and that smaller amount is then taxed through the normal Dutch income tax brackets, known as Box 1.

For someone below the Dutch state pension age, the 2026 brackets are:⁴

These are marginal rates, so each rate applies only to the income inside its band, and your final bill is also shaped by tax credits, national insurance, and your personal circumstances.

Expenses that may be reimbursed separately

The 30% allowance is meant to cover the extra costs of living and working abroad, which the rules call extraterritorial costs. These include things like the higher cost of living, double housing while you keep a home abroad, and the cost of applying for or converting official documents.

You generally use one method or the other, either the fixed 30% allowance or tax-free reimbursement of these costs based on receipts, not both for the same expenses.

The costs of moving and relocation can be reimbursed tax-free separately, and so can the fees for an international school. If school fees are a factor for your family, have a conversation with your employer about that separate treatment.

How long does the 30% ruling last?

The 30% ruling lasts for a maximum of 5 years, or 60 months, for rulings granted from 2024 onward.¹

Earlier time in the Netherlands can shorten it. Periods you spent living or working in the country in the previous 25 years are subtracted from your 5 years, so if you're returning to the Netherlands, you'll typically have a shorter benefit than a first move.²

Once the 5 years are up, the tax-free portion stops, your full salary becomes taxable, and your net pay drops even though your gross salary stays the same. Make sure to budget for this.

What happens if you change employers?

The 30% ruling is tied to your job, so it doesn't automatically transfer over to a new employer. If you switch jobs, you and your new employer have to file a fresh application to keep the benefit for the time you have left.

To keep the ruling running, the gap between your old job and your new one generally has to be no more than 3 months.⁵

Before you give notice, check the timing and the new application with your incoming employer, or a tax advisor, so nothing lapses while you move between jobs.

How does the Dutch 30% ruling affect your wider tax position?

Check which Dutch rules apply to you

The scheme has changed several times, and older rulings are often protected by transitional rules, so two people on the 30% ruling can face different terms. Here's what to expect:

• The tax-free percentage stays at 30% for 2026, but drops to 27% from 2027 for rulings that began on or after 1 January 2024 (older rulings keep 30%)¹
• The allowance applies only up to a salary cap, the WNT norm, which is 262,000 EUR in 2026³
• Partial foreign tax liability, an option that lets ruling holders keep certain foreign savings and investments outside Dutch tax, has been abolished, with a transitional exception running only to the end of 2026⁵

These rules can change, and many figures are indexed each year, so make sure to consult with a tax advisor to determine what applies to you.

Understand your US tax obligations

The 30% ruling is a Dutch benefit, and it doesn't influence your US tax obligations.

As a US citizen, you still file a US federal tax return every year and report your worldwide income, including the salary you earn in the Netherlands. ⁶

A few US tools can reduce or remove double taxation, such as the Foreign Tax Credit that gives you credit for Dutch income tax you paid and the Foreign Earned Income Exclusion that lets you exclude a set amount of foreign earnings.

That said, keep in mind that the tax-free portion wasn't taxed in the Netherlands, so there is no Dutch tax to credit, and it can still be taxable on your US return. Make sure to consult with a tax professional.

Preparing financially for your move to the Netherlands

A smooth move to the Netherlands is as much about cash flow as it is about tax rates. Even when your 30% ruling is approved, make sure to budget for:

• The wait before approval, since your employer withholds tax on your full salary until the ruling comes through and then corrects it later
• The upfront costs of relocating, including flights, shipping, deposits, and setting up a home
• The drop in your net pay when the ruling ends

For more help with settling in, Wise's guide to living in the Netherlands covers the practical side of the move beyond tax.

When it comes to the money side, moving funds from the US usually means converting USD to EUR, and the cost of that can be unexpectedly high.

Eligible US customers can use Wise to convert USD to EUR or send money to a Dutch account at the fair mid-market rate.

When you're setting up your transfer, make sure to look at the live quote, which shows the exchange rate, transfer fee, delivery estimate, and the final amount that reaches the recipient.

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The Dutch 30% ruling can give a qualifying employee a significant cut in Dutch tax for up to 5 years, but it depends on your job, salary, and being recruited from abroad.

Whether you are covering relocation costs or sending money between the US and the Netherlands, Wise can convert your USD to EUR at the fair mid-market rate with a transparent transfer fee so more of what you earn reaches your new home.

*Eligibility is subject to verification of customers' identity.

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Sources

1. Government of the Netherlands - The expat scheme for foreign employees in the Netherlands
2. Government of the Netherlands - Can I apply for the Expat Scheme (30% facility) if I come to work in the Netherlands?
3. Grant Thornton - 30% Ruling Updates Ahead of 2026
4. Netherlands Tax Administration - 29 Belastingberekening
5. Dutch Tax Point - The 30% ruling applied properly
6. IRS - U.S. citizens and resident aliens abroad