The 30% ruling in 2024
If you’re going to be working in the wet, rainy Netherlands as an expat, the tax authorities will give you a hand. An example of the help they offer you as an expat is the 30% ruling. What exactly does this regulation entail and how does it help you? As of 2024, many tax rules changed, including this regulation. So then comes the question, how does this ruling work from 2024 and what can it mean for you as an expat in the Netherlands?
When you are going to work in the Netherlands you can benefit from this 30% ruling under certain conditions. The main condition is that you have a specific expertise. Is it unique in the Netherlands? Then you might be eligible for the regulation. As of 2024, you may also earn a maximum of €233.000. The moment your salary exceeds this number, you unfortunately no longer qualify. Another requirement is in fact about the minimum wage you must earn, in other words, the test wage. This is determined by your age and education. If you are 30 years or older, this minimum wage is €46,107 gross per year. The same applies to expats without a master’s degree. Are you younger than 30 years old and do you have a master’s degree? Then the benchmark salary is €35,048 gross per year.
You can still make partial use of the 30% ruling if you do not meet the last condition, the test salary. You will then only receive compensation for the difference between the test salary and your salary. The compensation is therefore lower than 30% of your salary and you cannot therefore make maximum use of the scheme.
But what does this ruling mean? Starting in 2024, it works as follows. For the first 20 months that you use the regulation, 30% of your income will be tax-free. In other words, you don’t have to pay tax on that 30%. From the second 20 months, the same applies, but for 20% of your income. Perhaps you can already guess, but for the third 20 months you don’t have to pay tax on 10% of your income and from the fourth 20 months you have to pay tax on your entire income. So every 20 months, the percentage of tax-free income decreases by 10%. It goes from 30%, to 20%, to 10%.
Imagine Anne is an expat with an income of €100.000. Because of this regulation, she has to pay tax on €70.000 for the first 20 months she is working in the Netherlands. 30% is tax-free, leaving 70% to pay tax on. After those 20 months, that percentage drops. At that time she has to pay tax on €80.000, because then there’s 80% left to pay tax on. After this, she has been working in the Netherlands for four months. She starts her third 20 months and therefore from then on she has to pay tax on €90.000 of her income. The moment she works in the Netherlands for six months, she must pay tax on the full income, €100.000, again.
We are happy to help!
All those percentages and numbers can be confusing. Are you wondering when those 20 months would be starting for you? It can be different for everyone. That is why it’s advisable to seek professional advice. That way you can make sure you have all the information and know exactly what this regulation can do specifically for you.