The 30% Ruling Explained: Eligibility, Mechanics & Why the Step-Down Rumor Is Wrong

It is still a flat 30%, and this is the single most common piece of outdated advice still circulating about it. The 2024 Tax Plan originally legislated a 30-20-10 step-down (30% for roughly the first 20 months, 20% for the next 20, 10% for the final 20 of the 5-year term). Parliament reversed that step-down in 2025, before it took effect for most rulings. If your ruling starts in 2026, you get a flat 30% tax-free allowance on your gross salary for the entire 5-year (60-month) term, with no phase-down at all. A lot of blog posts, forum threads, and even some outdated employer HR pages still describe the 30-20-10 schedule, so if you read that anywhere in 2026, it's wrong.

Four things generally need to be true. You need to be recruited from abroad or transferred to a Dutch employer, specifically for expertise that is scarce in the Dutch labour market. You need to have lived more than 150km from the Dutch border for over 16 of the 24 months before you started your Dutch employment (this rules out most people already living in Belgium or nearby parts of Germany, France, or the UK who commute in). And you need to clear a minimum taxable salary: €48,013 a year standard, or €36,497 a year if you're under 30 with a qualifying Master's degree. Your employer applies for the ruling on your behalf with the Belastingdienst; it isn't something you can self-certify.

€48,013 a year in taxable salary for most applicants, which works out to roughly €68,590 a year gross before the 30% deduction is applied (since the threshold is measured after the ruling has already carved out its share). If you're under 30 with a qualifying Dutch or recognised foreign Master's degree, the bar is lower: €36,497 taxable, or roughly €52,139 gross. Miss the threshold and the ruling simply doesn't apply, regardless of how strong your other qualifications are.

It can, and this genuinely varies by employer. Because the ruling lowers your taxable base, and Dutch pension accrual is often calculated on taxable or pensionable salary, some pension schemes end up calculating your contributions on a smaller number than your full gross pay. Some employers deliberately structure their pension scheme so the tax-free ruling portion doesn't affect pensionable salary at all. There's no single answer here, so check your specific employment contract and pension scheme documentation rather than assuming either way.

It drops, and it's worth planning for rather than being surprised by. Once your 60-month term is up, your full gross salary becomes ordinary taxable Box 1 income again, with no tax-free carve-out. On a €90,000 salary that's the difference between €67,041 net (with the ruling) and €55,518 net (without it) at the exact same gross pay, an €11,523 drop in a single year unless you've negotiated a compensating gross increase ahead of the expiry date.

Usually not, and this trips up a lot of people reading Dutch job postings for the first time. Vakantiegeld (holiday allowance) is a mandatory minimum 8% of your gross annual salary, almost always paid as a separate lump sum around May or June, on top of your regular monthly pay. Most Dutch job ads quote a base gross salary that excludes vakantiegeld, meaning the actual annual cash you receive is typically about 8% higher than the headline number once that lump sum lands. It's ordinary taxable income, taxed exactly like any other salary payment (and included within the 30% ruling's tax-free slice if the ruling applies to you), not a separate untaxed bonus.

For 2026 specifically, yes, flat 30% for the full term. Looking ahead, the flat rate itself is scheduled to drop to 27% from 1 January 2027 for new and ongoing rulings, under separately agreed 2027 tax plan changes. That's still a flat rate, not a step-down back to the 30-20-10 structure, just a lower flat number from that date. If your ruling is active in 2026, none of that changes your figures for this tax year; it only matters once the calendar turns.