30% regulation
If a foreign employee comes to the Netherlands to work there, extra costs may be incurred, for instance because the employee’s costs of living are higher in the Netherlands than in the country of origin. The employer is allowed to pay these so-called extraterritorial costs to the employee tax-free. The employee also has the option, however, of receiving 30% of the salary, including reimbursement, tax-free.
The 30% regulation provides for paying 30% of the salary tax-free. The following conditions apply to using this regulation:
- The employee was either recruited outside the Netherlands or has been seconded to work in the Netherlands.
- The employee is in paid employment with a Dutch employer.
- The specific expertise is hardly available in the Dutch labour market.
- The employee should earn a salary of at least €38,347 per year, exclusive of the tax-free reimbursement.
- If the employee is younger than 30 years and has a Master’s degree, an annual salary of at least €29,149, exclusive of the tax-free reimbursement, will apply.
- Of the two years before his/her first working day in the Netherlands, the employee has lived for more than 16 months outside the Netherlands, at a distance of more than 150 kilometres from the Dutch border.
- The employee has been granted a valid decision on the 30% regulation.
Advice 30% regulation for payroll accounting
To be allowed to apply the 30% regulation to the employee’s salary, the employer has to submit a request with the Dutch Tax and Customs Administration (Belastingdienst). The better informed you are about all preconditions, the better the chance that the request is granted. Holland Employment Experts is a hands-on expert on the 30% regulation and an expert on the more complex remuneration options. We will be pleased to advise you, so that you and the employee can have maximum benefit from the regulation.