October 13, 2026 ∙ 5 min read
The maximum percentage that can be exempted from taxation as per the Dutch expat ruling will fall from 30% to 27% from 1 January 2027, while the salary threshold levels will increase. Those who have been applying for the ruling until 2024 will continue enjoying 30% until the end of their ruling period. Anyone joining after this date will eventually get 27%.
What is changing with the 30% ruling in the Netherlands in 2027?
This scheme, which is now formally known as the expat ruling, allows companies to grant foreign hires a tax-free allowance in recognition of their higher living expenses in another country, referred to as extraterritorial costs.. Until now the allowance has been up to 30% of the salary.
The government had planned to cut the benefit in steps to 20% and then 10%. It dropped that plan and chose a flat percentage instead. The 2027 reform replaces the stepped reduction with a constant 27% and raises the salary threshold.
For anyone searching “30% ruling changes for employers”, the short version is a smaller benefit, a higher entry bar and a transition that depends on the employee’s start date.
Expat ruling salary threshold in the Netherlands for 2027
The minimum salary will be determined without considering the tax-free allowance. In case an employee becomes entitled from 1 January 2027, the amount will be €50,436 for those aged above 30 and €38,000 for employees below 30 years of age possessing a master’s degree. The amount reflects the price level in 2024 and will be indexed every year.
| Employee group | Salary threshold 2027 (excl. allowance) | Maximum allowance |
| New applicants, age 30+ | €50,436 (2024 price level) | 27% |
| New applicants, under 30 with master’s | approx. €38,000 | 27% |
| Started before 1 Jan 2024 | Old threshold | 30% until ruling ends |
Who keeps 30% and who moves to 27%?
The transitional rules depend on the date an employee first qualified. There are three situations.
Employees who qualified before 1 January 2024
They retain the 30% maximum limit for the remainder of their ruling period, which cannot exceed five years from the ruling’s commencement date. However, the ruling will expire prior to its completion if the employment relationship ends. Any interruption of work in the Netherlands after 31 December 2023 may invalidate these provisions.
Employees who first qualified on or after 1 January 2024
They keep 30% through 2024, 2025 and 2026. From 1 January 2027 the allowance drops to 27% and stays there until the ruling period ends. Anyone who qualified from 1 January 2025 is also subject to the higher salary thresholds from 2027.
New applications from 1 January 2027
These employees get the 27% maximum from the first day.
What does the 27% mean for your payroll costs?
Take an employee whose salary, including the allowance, is €100,000. At 30%, €30,000 is tax-free. At 27%, only €27,000 is. The extra €3,000 becomes taxable. At a 49.5% marginal rate that is roughly €1,485 more tax a year.
The employee feels this as lower net pay. For you, it will appear as a demand for salary increases or gross-ups in particular situations, such as your fight for talent in the technology, engineering, finance and research sectors. Consider this an example rather than an evaluation of a situation.
What employers must do now: a practical checklist
Here is how we advise clients to prepare before the change takes effect.
1. Map every ruling holder
List each employee on the ruling with their start date, ruling end date and age. Split them into the three groups above. A spreadsheet is enough, but it has to be accurate.
2. Test salaries against the new threshold
The individual that begins in 2027 must meet the raised standard. In case one falls slightly under this threshold, a slight adjustment of the salary can ensure that the person is still eligible. This becomes easier if done before signing the contract.
3. Check how your payroll applies the percentage
The amount is maximum rather than being at a fixed rate. A smaller rate can be used where the salary cannot accommodate the entire allowance. Errors are mostly made in payroll calculations in this area, so make sure that your payroll firm sets the rule per employee.
4. Revisit offer letters and relocation budgets
If your contracts or job offers mention the ruling, check the wording. Avoid promising a “30% ruling” for hires who start in 2027. Update templates, and make sure recruiters quote net pay estimates correctly.
5. Talk to your expat employees early
Ruling holders will ask what changes for them. Clear, early communication prevents surprises on the January payslip.
Common mistakes we see
- Assuming every existing ruling holder keeps 30% (only the pre-2024 group does)
- Using last year’s salary threshold for 2027 hires
- Forgetting that interruptions in Dutch employment can end transitional protection
- Leaving the percentage hard-coded in payroll
Frequently asked questions
Is the 30% ruling being abolished in 2027?
No. It continues under the name expat ruling, with a maximum of 27% for most employees.
Will current 30% ruling holders lose their benefit?
It depends on the start date. People who qualified before 2024 keep 30% until their period ends. People who started from 2024 move to 27% in 2027.
How long does the expat ruling last?
Up to five years from the start date stated in the ruling.
What is the expat ruling salary threshold in the Netherlands for 2027?
€50,436 at 2024 price level for employees aged 30 and over, excluding the tax-free allowance. It is indexed annually.
Can employers still compensate the difference?
Employers can raise salary or adjust benefits, but any such decision should be modelled on cost and tax first.
Final thoughts
The move from the 30% ruling to the 27% expat ruling is manageable if you act before year-end. Know who qualifies for what, check salaries against the new thresholds and fix payroll settings early.
If you want a second pair of eyes on your workforce, the Immigration & Global Mobility team at FIFEC can assess your current ruling holders and upcoming hires. You can also explore our other services for international businesses in the Netherlands. Call +31643709035 or email info@fifec.nl.
