From the 30% ruling to 27% ruling in the Netherlands

What changes in 2027 and what it means for you

From 1 January 2027, the Dutch 30% ruling transitions to the 27% ruling in the Netherlands for many expats, but not for everyone. While the headline is clear, the reality is nuanced. In this blog, Mark from Dutch Tax Advice, your local expert, explains the nuances:

Three distinct groups will exist from 2027:

1. Employees keeping 30% for their ruling’s remaining term.
2. Employees moving to 27% with the existing salary threshold.
3. Employees moving to 27% with a new, higher salary threshold.

This means three employees within the same company may need different payroll treatments from January 2027.

Need clarity? Let Dutch Tax Advice review your 30% ruling population and confirm the 2027 treatment. Book a free 15-minute call.

Key Takeaways:   The 30% ruling lets expats receive up to 30% of their salary tax-free. From 1 January 2027, this changes, and what it means for you depends on one question: when did you first get the ruling? – Before 2024: You keep 30% until your ruling ends. Your allowance doesn’t change. – In 2024: From 2027, you get 27% instead of 30%. The minimum salary you need to earn to qualify stays the same, apart from the usual yearly inflation increase. – In 2025 or later: From 2027, you get 27% instead of 30%, and you need to earn a higher minimum salary to qualify. Also good to know – The exact minimum salaries for 2027 are not known yet. They will be published at the end of 2026. – Do you have savings, investments or shares abroad? If your ruling started before 2024, you may currently pay no Dutch tax on them. That ends on 31 December 2026, and for some people this costs more than the drop from 30% to 27%. – Are you an employer? Don’t switch everyone to 27% in January. Check for each employee when their ruling started.

The 3 groups under the 27% ruling Netherlands

The transitional rules can be summarised as follows:

When the 30% ruling was first applied to your salary	2026	From 1 January 2027	Salary threshold from 2027
By 31 December 2023	30%	30% for the remaining term	Existing salary threshold, indexed annually
During 2024	30%	27%	Existing salary threshold, indexed annually
From 1 January 2025 onwards	30%	27%	New, higher salary threshold, indexed annually

The 2024 group is particularly important. Someone who first started using the ruling in 2024 does lose three percentage points from 2027, but does not move to the new higher salary threshold. Employees who first started using the ruling from 1 January 2025 onwards face both changes at the same time: 27% instead of 30%, plus the new higher salary threshold.

Salary thresholds in 2027: What changes for expats?

This is where the 2027 changes can become confusing. There are effectively two sets of salary thresholds from 2027:

Employees who started using the ruling by the end of 2024

These employees remain subject to the existing salary threshold, which continues to be indexed annually.

For reference, in 2026 the existing thresholds are:

• €48,013 of taxable annual salary for the regular threshold; and
• €36,497 for qualifying employees under 30 with an academic master’s degree or equivalent foreign degree.

The corresponding 2027 amounts will be determined following the normal annual indexation at the end of 2026.

Employees who started using the ruling from 1 January 2025 onwards

For this group, a new, higher salary threshold applies from 1 January 2027. The legislation determines the increase by comparing the thresholds at 2024 price levels:

• the regular threshold increases from €46,107 to €50,436; and
• the threshold for qualifying employees under 30 increases from €35,048 to €38,338.

Importantly, €50,436 and €38,338 are not the actual 2027 thresholds.

They are the new thresholds expressed at 2024 price levels. The amounts are subsequently indexed for 2025, 2026 and 2027 before becoming the actual thresholds applicable from 1 January 2027. The final indexed 2027 amounts should therefore be used once officially published (expected at the end of 2026).

In practical terms, the important point is not the exact euro amount yet, but which salary regime applies to the employee:

• pre-2025 ruling → existing indexed salary threshold;
• ruling starting from 2025 → new, higher indexed salary threshold.

The salary threshold vs. the 27% allowance: What’s the difference?

Another distinction matters for both employers and employees. The salary threshold is tested against the employee’s taxable salary after the tax-free allowance has been deducted. 

This means that the minimum salary required to qualify for the ruling is not necessarily the same as the total remuneration required to use the full 30% or 27% allowance. If applying the maximum percentage would reduce the employee’s taxable salary below the applicable threshold, the tax-free allowance must be reduced. The employee may therefore still qualify for the expat ruling but be unable to use the full percentage.

This will become especially relevant from 2027 for employees who fall under the new, higher salary threshold and whose remuneration is relatively close to that threshold.

The maximum: the WNT salary cap

Besides a minimum salary threshold, there is also a maximum. Since 2024, the tax-free allowance can only be calculated over salary up to the WNT norm (the Dutch public-sector salary cap), which is set annually. For employees who were already using the ruling in 2023, transitional rules applied, and for them the cap has applied since 1 January 2026. For high earners, this cap and the reduction to 27% together determine the actual tax-free amount.

What the 30% to 27% drop means for your payroll

Take an employee with €100,000 of total remuneration, assuming the employee can use the full percentage.

At 30%:

• €30,000 can be paid as a tax-free expat allowance;
• €70,000 remains taxable.

At 27%:

• €27,000 can be paid as a tax-free expat allowance;
• €73,000 remains taxable.

In other words, €3,000 that could previously be paid tax-free becomes taxable remuneration. Depending on the employee’s tax bracket and the effect on tax credits, this typically means roughly €1,100 to €1,500 less net income per year. The exact impact depends on the employee’s full income position.

For employees with a fixed gross package, the employee will generally bear the net reduction. Where an employment agreement contains a net-salary guarantee or tax-equalisation arrangement, however, some or all of the cost may fall on the employer. Employers should therefore review the contractual wording as well as the payroll calculation.

The end of partial non-resident taxpayer status in 2027

For some expats, this may have a significantly larger financial impact than the reduction from 30% to 27%. Historically, qualifying 30% ruling holders could elect to be treated as partial non-resident taxpayers for Dutch income tax purposes.

Broadly speaking, this meant that they were treated as non-residents for Box 2 and Box 3, which could keep certain foreign investments and substantial shareholdings outside the Dutch tax base. Partial non-resident taxpayer status was abolished for new cases from 1 January 2025.

Employees who already applied the 30% ruling in the last wage tax period of 2023 can, subject to the transitional conditions, continue to benefit from the old treatment through 31 December 2026 (or earlier if their ruling ends before that date). Employees who first started using the ruling during 2024 could only use partial non-resident taxpayer status for 2024.

From 1 January 2027, that transitional treatment ends.

This means that an employee can be protected from the reduction to 27% and continue receiving the full 30% allowance, while at the same time losing the partial non-resident taxpayer treatment. For employees with significant foreign assets, this can be much more important than the three-percentage-point payroll change.

Relevant positions can include:

• foreign investment portfolios;
• substantial shareholdings in foreign companies;
• other foreign investments and assets that may fall within Box 2 or Box 3.

Foreign real estate should be considered separately because applicable tax treaties and double-taxation relief can affect the Dutch tax treatment. Unlike the reduction from 30% to 27%, this change does not appear in payroll. Its consequences arise in the employee’s personal Dutch income tax position. Employees affected by this change should therefore review their position during 2026 rather than discovering the consequences when their 2027 income tax return is prepared.

Changing employer and transitional protection

Changing employer does not automatically mean that the 30% ruling is lost. Under the continuation rules, the ruling can generally continue with a new employer if the applicable conditions are satisfied and the new employer and employee submit the required application.

However, employees with valuable transitional rights should be particularly careful where there is a significant interruption between employments or another material change in circumstances. Whether transitional protection continues can depend on the precise facts. A job change, period of garden leave, sabbatical or international assignment should therefore not automatically be assumed to have no effect on the employee’s transitional position.

Falling below the salary threshold

The applicable salary threshold must continue to be met during the term of the ruling. This matters especially for employees whose taxable salary is relatively close to the threshold.

Potential issues can arise where an employee:

• reduces working hours;
• takes unpaid leave;
• moves from fixed to variable remuneration;
• receives a lower bonus than expected;
• starts or leaves employment during the year.

There are specific rules for certain statutory forms of leave, so not every temporary salary reduction has the same result. For employees close to the threshold, the position should therefore be monitored during the year rather than reviewed only after year-end.

Starting in 2026 does not create additional protection for 2027

Employees who first start using the ruling during 2026 can still benefit from the 30% rate during 2026, provided all conditions are satisfied.

However, starting before the end of 2026 does not move the employee into one of the more favourable transitional groups. An employee who first starts using the ruling in 2026 falls into the category “from 1 January 2025 onwards.”

From 2027, that employee will therefore be subject to:

• a maximum allowance of 27%; and
• the new, higher salary threshold.

Starting during 2026 can therefore provide the 30% allowance for the eligible period in 2026, but it does not create additional protection from the 2027 changes.

The four-month application period

The well-known four-month period also deserves some clarification. It is not an absolute deadline after which the expat ruling can no longer be requested. Instead, it determines whether the ruling can generally apply retroactively from the beginning of the employment. Where the application is submitted within four months after the start of employment, the ruling can generally take effect from the first working day. If the request is submitted later, a ruling can still be granted, but with a later effective date. For new hires, timely filing therefore remains important.

What employers must do before 1 January 2027

Employers should start by making an inventory of all employees currently using the 30% ruling. For each employee, establish:

1. When was the ruling first applied?

Separate employees into:

• by the end of 2023;
• during 2024;
• from 1 January 2025 onwards.

This determines both the percentage and the salary regime from 2027.

2. Does the employee remain on 30% or move to 27%?

Do not simply replace 30% with 27% for every employee. Some employees remain protected by the transitional rules.

3. Which salary threshold applies?

• Employees starting before 2025 continue under the existing indexed threshold. 
• Employees starting from 2025 become subject to the new, higher indexed threshold from 2027.

4. Can the employee use the full percentage?

Meeting the salary threshold and being able to use the maximum 30% or 27% allowance are related but separate calculations.

5. What does the employment agreement provide?

Check whether remuneration is expressed in gross or net terms and whether the employer has made any contractual commitment regarding the benefit of the 30% ruling.

6. Does the employee currently use partial non-resident taxpayer status?

For qualifying employees, that treatment ends after 2026 and may require separate personal income tax planning.

What expats should check now

For employees, the starting point is equally simple:

When did you first start using the 30% ruling?

If the ruling was already applied by the end of 2023, you can generally remain on 30% for the remaining term, subject to the transitional conditions.

If your ruling was first applied in 2024, your maximum allowance decreases to 27% from 2027, but you continue under the existing salary threshold, indexed annually.

If your ruling was first applied from 1 January 2025 onwards, you move to 27% and the new, higher salary threshold becomes applicable.

If you have significant foreign investments and currently benefit from partial non-resident taxpayer status, there is another important date to remember: that transitional treatment ends on 31 December 2026.

Prepare before the January payroll

The change from 30% to 27% may sound straightforward. In practice, the combination of three transitional groups, two different salary regimes and the end of partial non-resident taxpayer status makes the 2027 changes more complicated. Employers should therefore not simply change every 30% ruling employee to 27% in January.

The first step is to identify when each employee started using the ruling and determine:

• the percentage that applies;
• the salary threshold that applies;
• whether the employee can use the full allowance; and
• whether separate personal income tax consequences arise.

Unsure which group you fall into? We help employers and expats navigate the 27% ruling in the Netherlands. Try our 27% ruling tool or book a free 15-minute call.

FAQ about the 27% ruling Netherlands

About the Author

Mark Bastiaans is the Managing Director of Dutch Tax Advice. He graduated from Tilburg University in 2006 and previously worked at Big Four advisory firms and multinational enterprises. He specialises in international tax for expats and entrepreneurs in the Netherlands.