End-of-year Checklist for the 30%-ruling
1. Employment Contracts: Ensuring Compliance with the 30%-Ruling Requirements
Verify that the 30%-ruling clause is explicitly included in the employment contract or documented in an addendum. This is especially important when implementing the 30%-ruling with retro-active effect as this is the basis for allowing the retro-active calculation.
Check whether any employment contract renewals in the past year continued to include the correct articles, correct references to legislation and applicable salary requirements.
2. Salary Requirements Review
The minimum salary requirement are not only relevant when filing the application, but are relevant for the entire duration of the ruling. If an employee's salary drops below the required threshold (e.g., due to unpaid leave or a part-time arrangement), the 30%-ruling can be revoked retroactively.
General Requirements (2024 thresholds):
2024 Minimum annual taxable salary for the 30%-ruling (excluding the tax-free allowance):
€46,107,01 for employees aged 30 or older.
€35.048,01 for employees under 30 with a master’s degree.
General Requirements (2025 thresholds):
2025 Minimum annual taxable salary for the 30%-ruling (excluding the tax-free allowance):
€46,660,01 for employees aged 30 or older.
€35.468,01 for employees under 30 with a master’s degree.
In addition to the minimum salary requirement, as of January 1, 2024, there is also a maximum salary over which the 30% ruling can be calculated. This maximum is linked to the so-called "Balkenende norm." For 2024, this is set at EUR 233,000.
This means that for 2024, a maximum of EUR 66,900 can be reimbursed tax-free under the 30% ruling (EUR 233,000 x 30%).
For 2025, the maximum salary over which the 30% ruling can be calculated is set at EUR 246,000. This means that for 2025, a maximum of EUR 73,800 can be reimbursed tax-free under the 30% ruling (EUR 246,000 x 30%).
A transitional arrangement is in place for expats for whom the 30% ruling was already applied in December 2022. For these expats, the maximum salary cap will only apply from January 1, 2026.
Actionable Steps:
Review all expat’s salaries in December to confirm compliance for the current 2024 year;
Review the expected expat’s salary in January to confirm that they will also remain compliant for 2025;
For employees who turned 30 in 2024, ensure their salaries complies with the higher threshold from the first day of the month after their birthday onward.
For expats with an income of EUR 233,000 or higher, it is important to check whether they fall under the transitional arrangement.
If expats with an income of EUR 233,000 or higher do not fall under the transitional arrangement, it must be checked whether more than EUR 66,900 has been reimbursed tax-free under the 30% ruling.
If expats do fall under the transitional arrangement, it is important to inform them in advance that their 30% ruling will be limited starting from January 1, 2026.
3. Expiring 30%-Rulings
Identify expats whose 30%-ruling will expire in 2025 (typically after 60 months).
Develop a transition plan for these employees:
Discuss with HR and payroll to assess financial and employment implications.
Communicate with affected employees to manage expectations and address any concerns.
Explore alternative benefits or compensation packages to mitigate the loss of the tax advantage.
4. Annual Payroll Review
In addition to assuring that the employee meets the minimum income requirements for the 30%-ruling, there is also the obligation for the employer to assure that the 30%-ruling is calculated and categorized correctly in the salary administration as so-called ‘eindheffingsbestandeel’ (or translated ‘final levy component’).
Conduct an end-of-year payroll review to:
Ensure correct calculation of the tax-free allowance (maximum 30%).
Verify any reimbursements for extraterritorial costs are properly documented and not double-counted.
Cross-check compliance with other Dutch wage tax rules that the 30%-ruling is labelled as a final levy component in the payroll.
5. Employees Turning 30 in 2025
Identify expats currently benefiting from the reduced salary threshold for those under 30 with a master’s degree.
Adjust their salary planning to meet the higher threshold of €46.660 starting from their 30th birthday.
6. Budgeting for 2025: Planning for New Expats
Consider the 2024/2025 salary requirements when budgeting for hiring new expats.
Ensure that employment contracts for new hires include the correct 30%-ruling provisions from the start.
7. 30%-Ruling Retroactive Applications
Obtaining the 30%-ruling can take several weeks to several months. After the ruling is granted, a retro-active salary calculation can be performed to implement the 30%-ruling. When granted in the same year, the salary recalculation can be easily included in the current year-end salary calculation. However, if granted after the year has been closed, it will mean having to re-open a previous year to retroactively claim the benefit
o The 30% ruling must be applied in the payroll administration and cannot be applied via the income tax return. If the scheme is granted in 2025 with effect from a date in 2024, the 30% ruling must actually be applied in the year 2024 by means of a retroactive correction.
o Take inventory of all current applications pending on 31 December 2024 and there start date if granted.
o Take inventory of all current applications and the likelihood of a positive grant and possible timeline.
o Consider whether the payroll for those employees need to be closed or kept open for possible retro-active correction for the 30%-ruling.
o Processing 2024 corrections in the 2025 payroll is not allowed as this may result in a tax free allowance of more than 30% in 2025.
o The 30%-ruling has been subject to many tax law changes. This changes did allow for transitional exemptions for expats who already made use of the 30%-ruling in the previous year. By not correcting the 2024 payroll, the expat(s) may be excluded from these transitional exemptions.
8. Additional considerations and Key Deadlines
School Fee Reimbursement for Children:
For expats eligible for reimbursement of international school fees under the 30%-ruling, verify proper documentation (does it really concern international education?) and tax treatment.
Ensure all 30%-ruling applications for 2024 hires are submitted within the 4-month application window.
9. Communication with Employees
Proactively communicate changes in salary requirements, expiring rulings, or updates to their tax situation.
Offer to arrange a consultation or tax briefing for affected expats.
