From 1 January 2027, the Dutch expat scheme will change in several important ways:
- The maximum tax-free allowance will generally decrease from 30% to 27%.
- Employees who already benefited from the scheme before 2024 may continue to receive up to 30% tax-free under transitional rules.
- Employees who first entered the scheme in 2024 will generally move to 27% from 2027, but continue to benefit from the older salary threshold regime.
- Employees entering the scheme from 2025 onwards will generally face both the 27% maximum allowance and higher salary thresholds from 2027.
- The salary thresholds are indexed, meaning the final applicable amounts for 2027 may be higher than the statutory base amounts.
- Employers should review affected employees, employment agreements and payroll systems before January 2027.
Changes to the Expat Scheme from 2027
The Dutch expat scheme, widely known as the 30% ruling, will change significantly from 1 January 2027.
For many international employees, the most visible change will be the reduction of the maximum tax-free allowance from 30% to 27%. At the same time, higher salary thresholds will apply to certain employees, potentially affecting whether they qualify for the scheme and how much of their remuneration can be paid tax-free.
The impact, however, will not be the same for everyone. Transitional rules mean that the date on which an employee first became eligible for the expat scheme will be particularly important.
For employers with international workforces, the changes also require careful preparation. Payroll configurations, employment agreements, compensation packages and existing expat arrangements should be reviewed before the new rules take effect.
What Is the Dutch Expat Scheme?
The Dutch expat scheme is a tax facility designed for certain employees recruited from abroad to work in the Netherlands.
International employees may incur additional expenses as a consequence of working outside their home country. These are generally referred to as extraterritorial costs.
Where the conditions of the scheme are satisfied, an employer can currently designate up to 30% of an eligible employee’s remuneration as a tax-free allowance without requiring the employee to demonstrate the actual amount of qualifying extraterritorial costs.
The scheme can generally apply for a maximum period of five years.
Eligibility is subject to several conditions. Among other requirements, the employee must generally have been recruited from outside the Netherlands and possess specific expertise that is considered scarce or not readily available on the Dutch labour market. A salary threshold is used as one of the principal tests for this specific expertise.
The employee must also generally have lived more than 150 kilometres from the Dutch border for more than 16 months during the 24 months preceding the first working day in the Netherlands.
From the 30% Ruling to the 27% Expat Scheme
The headline change is straightforward.
From 1 January 2027, the maximum tax-free percentage under the expat scheme will generally decrease from 30% to 27%.
This means that an eligible employee who would otherwise have received the full 30% tax-free allowance may receive a smaller tax-free component from 2027.
Importantly, the 27% represents a maximum. It does not automatically mean that every qualifying employee can receive exactly 27% of their total remuneration tax-free. The applicable salary threshold must still be satisfied after taking the tax-free allowance into account.
For employees closer to the minimum salary threshold, the effective tax-free percentage may therefore be lower.
Who Will Be Affected by the Changes?
The answer depends largely on when the expat scheme was first applied.
Employees Who Entered the Scheme Before 1 January 2024
Employees who were already benefiting from the expat scheme by the end of 2023 generally fall under transitional protection.
For these employees, the maximum tax-free allowance can remain at 30% for the remaining duration of their eligible period, subject to the applicable conditions.
They also continue under the existing salary threshold framework, with annual indexation.
This means that the reduction to 27% does not automatically affect all employees currently using the 30% ruling.
Employees Who Entered the Scheme in 2024
Employees for whom the expat scheme was first applied in 2024 can continue to receive a maximum tax-free allowance of 30% during 2024, 2025 and 2026.
From 1 January 2027, their maximum allowance will decrease to 27%.
However, an important transitional rule applies to the salary requirement. These employees continue to use the older salary threshold framework, adjusted through annual indexation, rather than moving to the new higher threshold introduced for later entrants.
Employees Who Entered the Scheme From 1 January 2025
Employees entering the scheme from 2025 onwards are more directly affected.
From 1 January 2027, they will generally be subject to:
a maximum tax-free allowance of 27%, and
the higher salary thresholds introduced for the revised expat scheme.
This distinction is particularly important for employees whose salaries are relatively close to the qualifying threshold.
Higher Salary Thresholds from 2027
In addition to reducing the maximum tax-free percentage, the revised rules introduce higher salary requirements.
The statutory base threshold for the revised regime is €50,436, excluding the tax-free allowance.
For qualifying employees under the age of 30 who hold an eligible master’s degree, the statutory base threshold is €38,388.
These figures are subject to indexation. Employers and employees should therefore confirm the final indexed thresholds applicable for 2027 before calculating eligibility or determining compensation packages.
For comparison, the regular salary threshold in 2026 is €48,013, while the reduced threshold for qualifying employees under 30 with an eligible master’s degree is €36,497.
The increase can have practical consequences. An employee who qualifies in 2026 may not necessarily be entitled to the same level of tax-free reimbursement in 2027 if their salary does not sufficiently exceed the applicable threshold.
In some cases, only a smaller portion of the salary may qualify for the tax-free allowance. In others, eligibility for the expat scheme may be affected altogether.
The 2027 Rules at a Glance
The transitional framework can broadly be summarised as follows:
| First application of expat scheme | Maximum allowance from 2027 | Salary threshold regime |
|---|---|---|
| By 31 December 2023 | Up to 30% | Existing threshold, indexed annually |
| During 2024 | Up to 27% | Existing threshold, indexed annually |
| From 1 January 2025 | Up to 27% | Higher 2027 threshold, subject to indexation |
| New cases from 2027 | Up to 27% | Higher 2027 threshold, subject to indexation |
This makes the original start date of the expat scheme an important part of determining an employee’s position from 2027.
What Does the Change Mean for an Employee’s Net Salary?
For some employees, reducing the maximum tax-free component from 30% to 27% will result in lower net remuneration if their gross compensation package remains unchanged.
The actual financial impact depends on several factors, including the employee’s gross salary, applicable tax rates, employment agreement and how the expat allowance has been incorporated into the compensation package.
The contractual arrangement between employer and employee is particularly important.
Some employment contracts define a fixed gross salary with the expat scheme applied within that amount. Others may contain net salary arrangements, tax equalisation provisions or specific agreements regarding the 30% ruling.
Employers should therefore avoid treating the 2027 change as purely a payroll adjustment. Existing employment contracts and addenda should also be reviewed to determine who bears the financial impact of the reduction.
The End of Partial Foreign Tax Liability
The 2027 changes should also be considered alongside another important reform affecting expats in the Netherlands.
Since 1 January 2025, employees using the expat scheme can generally no longer elect to be treated as partial non-resident taxpayers for Dutch income tax purposes.
Historically, this election could provide favourable treatment for certain income and assets falling within Box 2 and Box 3.
Transitional rules have temporarily protected certain employees who were already using the 30% ruling before 2024. Those qualifying employees can continue to elect partial foreign taxpayer status through the 2026 income tax year.
From 2027, that transitional period ends.
This means that some long-standing expats may experience two changes at the same time: the evolving rules surrounding the expat allowance and the end of transitional partial foreign tax treatment.
For internationally mobile employees with investments, substantial shareholdings or significant assets outside the Netherlands, the broader personal tax consequences should therefore be reviewed separately.
The Salary Threshold Requires Ongoing Attention
Qualifying for the expat scheme is not simply a one-time assessment.
Employers need to ensure that the applicable salary requirement continues to be satisfied during the period in which the scheme is applied.
This becomes particularly important when circumstances change, for example due to a salary adjustment, reduced working hours or changes to the employment arrangement.
If an employee fails to satisfy the applicable income requirement, this can have consequences for the continued application of the expat scheme and may require corrections to payroll administration.
With the salary thresholds increasing from 2027 for certain employees, employers should identify potentially affected cases before the beginning of the new calendar year.
What Should Employers Do Before 2027?
Businesses employing international professionals should use the remaining period before 1 January 2027 to review their expat population.
The first step is to establish when the expat scheme was first applied for each employee. This determines which transitional regime applies.
Employers should then assess whether each employee will continue to satisfy the applicable salary threshold in 2027 and calculate the expected impact of the reduction from 30% to 27%.
Employment contracts, assignment letters and 30% ruling addenda should also be reviewed. Particular attention should be paid to wording concerning gross and net remuneration, tax benefits and responsibility for changes in tax legislation.
Finally, payroll systems must be prepared to distinguish between employees who remain entitled to the 30% allowance and those who move to 27%.
The transitional rules mean that employers may have employees under different versions of the expat scheme simultaneously. Accurate payroll administration will therefore become increasingly important.
What Should Expats Do?
Employees currently benefiting from the 30% ruling should first determine which transitional category applies to them.
An employee who started using the scheme in 2023 may have a very different tax position in 2027 from a colleague who started in 2024 or 2025.
Employees should review their expat ruling decision, employment agreement and current salary structure. Where the 27% rule applies, it is useful to understand in advance how the change will affect monthly net income.
Employees with significant savings, investments or substantial shareholdings should also consider the separate implications of the end of transitional partial foreign tax liability.
International Recruitment Remains Attractive, but Planning Matters
The Netherlands continues to be an important destination for international professionals and multinational businesses. The expat scheme remains a meaningful tax facility even after the maximum allowance is reduced to 27%.
However, the framework is becoming more differentiated.
From 2027, employers may simultaneously manage employees entitled to 30%, employees entitled to 27% under the older salary threshold and employees subject to both the 27% allowance and the higher salary requirement.
For businesses recruiting internationally, this makes careful structuring of employment packages and reliable payroll administration increasingly important.
Preparing for the 2027 Expat Scheme
The transition from the 30% ruling to the revised expat scheme represents more than a three-percentage-point adjustment.
For employers, it affects payroll, international recruitment, employment agreements and compensation planning. For employees, it may affect net salary, continued eligibility and broader personal tax considerations.
Understanding the applicable transitional regime early allows both employers and employees to prepare before the changes take effect.
At NetherBridge Partners, we support international businesses and professionals with Dutch tax compliance, payroll coordination, accounting and corporate advisory matters. We help clients understand how regulatory changes affect their specific circumstances and ensure that their Dutch financial and tax administration remains accurate, compliant and properly structured.
If your organisation employs international professionals or you currently benefit from the Dutch expat scheme, reviewing your position before 2027 can help avoid unexpected payroll and tax consequences.
