30% Ruling Benefit for Highly Skilled Migrants: An HR Perspective (2026 Update)

Relocating to the Netherlands offers numerous opportunities for highly skilled migrants, but it also comes with significant financial challenges that must be addressed. One significant relief is the 30% ruling, a tax benefit aimed at alleviating the financial burden (extraterritorial costs) that knowledge migrants face as a result of the relocation procedure.

For firms seeking international talent, understanding and facilitating this benefit is essential for recruitment and retention.

What is the 30% Ruling?

The 30% ruling is a tax benefit that the Dutch Government grants to employees hired or transferred from abroad. This relief allows highly skilled migrants to receive 30% of their salary tax free, as a way to offset the costs associated with living and working in a foreign country.

While this benefit has been a cornerstone of Dutch talent attraction for decades, it has recently undergone legislative changes. Most notably, the “30-20-10%” step-down scheme originally proposed for 2024 has been cancelled.

Key Changes for 2026

As we move through 2026, several critical updates have been implemented to the ruling:

• Fixed 30% Rate: The previously proposed reduction scheme (30-20-10) was abolished. For 2026, the rate remains a flat 30% for the entire eligible duration (up to five years) for all current and new applicants.
• Salary Cap (WNT-norm): The 30% ruling is now capped at the “Balkenende norm.” In 2026, this cap is set at €262,000. Income exceeding this amount is fully taxable and does not qualify for the 30% tax-free allowance.
• Partial Non-Resident Tax Status: As of January 1, 2025, the “partial non-resident taxpayer” status has been abolished for new applicants. Employees can no longer opt to be treated as non-residents for Box 2 and Box 3 (savings and investments) taxes. Transitional rules apply only to those who held the ruling prior to 2024, allowing them to retain this status until January 1, 2027.
• Upcoming 2027 Change: It is important for HR teams to plan ahead: from January 1, 2027, the tax-free percentage is scheduled to decrease from 30% to 27% for most employees.

Eligibility Criteria

To qualify for the 30% ruling in 2026, the following criteria must be met:

• Recruited from Abroad: The employee must be recruited or transferred from another country.
• Scarcity of Expertise: The employee must possess specific expertise scarce in the Dutch labor market.
• Distance Requirement: The employee must have lived more than 150km from the Dutch border for at least 16 of the 24 months before employment.
• 2026 Salary Requirements: The annual taxable salary (after the 30% deduction) must meet these updated thresholds:
  • Standard: €48,013 (up from €46,660 in 2025).
  • Master’s degree holder under 30: €36,497 (up from €35,468 in 2025).
• Recognized Sponsor: The employer must be a recognized sponsor with the IND.

How HR Teams Can Facilitate the Process

The application must be filed jointly by the employer and employee within 4 months of the employee’s first workday to ensure retroactive effect to the start date.

Below are some steps to facilitate this process:

1. Verify Eligibility: Ensure the talent meets the new 2026 salary and distance requirements.
2. Documentation: Assist in gathering diplomas (which may require IDW evaluation for the young Master’s threshold) and proof of residence.
3. Ongoing Compliance: Monitor salary levels annually; if a salary falls below the indexed threshold, the ruling may be lost permanently.

Other Tax Benefits for Highly Skilled Migrant

In addition to the benefit of the 30% ruling, the Dutch Government also includes other tax advantages that highly skilled migrants can apply to.

These include:

1. Child benefits: Expats with children in the Netherlands may be eligible for a financial contribution to help cover the costs of raising their children.
2. Fiscal Partnership: When highly skilled migrants are married or in a registered partnership, they can be considered fiscal partners for Dutch income tax purposes. This arrangement allows them to optimize their tax positions by allocating certain income and deductions to maximize benefit.

Attract and Retain International Talent to Your Organization in the Netherlands

Actively assisting employees with the 30% ruling is a powerful retention tool. As the landscape grows more complex with the removal of the partial non-resident status and the upcoming 2027 rate reduction, expert guidance is more valuable than ever.

For HR teams looking to navigate these 2026 updates and ensure global mobility compliance, EMG is here to help. Contact us today to streamline your relocation and tax processes.

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