During Prinsjesdag 2025, the Dutch government confirmed the Tax Plan 2026, which includes two measures that will impact how employers with international staff manage international compensation. The 30% ruling will retain its full benefit in 2025 and 2026, but from 2027, it will decrease to 27% (the reduction to 27% in 2027 was already announced during last year’s Prinsjesdag).
At the same time, the Extraterritorial Cost (ETK) scheme will be narrowed from 2026, with utilities and private call costs excluded from tax-free reimbursement for incoming workers.
These steps reflect the government’s aim to contain costs and simplify allowances, but for employers and expats, they mean higher taxable wages, tighter eligibility, and more complex planning.
The 30% ruling in 2026
The Dutch 30% ruling allows employers to provide part of an employee’s salary tax-free if they are hired from abroad. It is one of the most used incentives to attract international talent.
For 2026, three points stand out:
- Benefit percentage: The ruling remains at 30% in 2025 and 2026. From 1 January 2027, it drops to 27%.
- WNT cap: The maximum tax-free portion is tied to the WNT cap. This rises from 246,000 euros in 2025 to 262,000 euros in 2026.
- Salary thresholds: New thresholds were announced for 2026. Indicative figures for 2026 are 48,013 euros (standard) and 36,497 euros (for employees under 30 with a master’s degree), but they are not yet confirmed. Employers should plan with two scenarios: an indexed increase and a higher step-up. The 2025 figures are 46,660 euros for the standard threshold and 35,468 euros for employees under 30 with a master’s degree.
Table: 30% Ruling Overview
| Year | Standard Threshold | Under 30 w/ Master’s | Maximum Cap (WNT) | Benefit % | Notes |
|---|---|---|---|---|---|
| 2025 | €46,660 | €35,468 | €246,000 | 30% | Current official figures |
| 2026 | €48,013* | €36,497* | €262,000 | 30% | *Provisional thresholds |
| 2027 | ~€50,436* | ~€38,338* | To be confirmed | 27% | Thresholds expected to rise |
ETK scheme restrictions from 2026
The ETK scheme allows employers to reimburse actual extraterritorial costs for staff who do not qualify for the 30% ruling. From 1 January 2026, the scheme will be narrowed.
Two categories of costs can no longer be reimbursed tax-free for incoming workers:
- Extra cost of living, including gas, water, electricity, and other utilities.
- Private call costs with the home country.
Other ETK items, such as double housing or travel to the home country, remain in scope. Outgoing staff and employees on the 30% ruling are not affected by this measure, because they can not apply for the ETK scheme.
What This Means for Employers & Employees
Impact for employers:
- Higher taxable wages if you continue to pay excluded costs.
- ETK policy documents and payroll systems need updating before 2026.
- Communication must separate ETK from the 30% ruling to prevent errors.
Impact for employees
- Net pay will decrease if employers keep reimbursing excluded costs.
- Perception of losing part of the package could affect morale and retention.
- Transparent communication and possible gross-up solutions can help manage expectations.
Conclusion
The Dutch government’s proposals introduce tighter rules for expat tax benefits. Employers must act early. Updating ETK policies before 2026 and preparing for the 27% step in 2027 are essential. The higher salary thresholds and new WNT cap will also affect eligibility and total cost. Delaying action risks compliance gaps, rising payroll expenses, and weaker retention. With timely planning, clear communication, and well-structured packages, companies can transform these changes into opportunities to demonstrate their commitment to their international staff and remain competitive in the Dutch market.
At EMG, we support employers by modelling scenarios, reviewing ETK and 30% ruling policies, and helping teams explain these changes to employees with clarity.
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