30% ruling application
- Free consult on the conditions of the 30% ruling
- Evaluation employment agreement
- Preparation of tax forms and submission to tax authorities
- Salary calculation to check the benefits of the 30% ruling
- Fast procedure; 30% ruling can be provided within 2-4 weeks
In short, the 30% ruling offers employers of incoming employees (e.g. expats) the opportunity to give this employee a certain tax-free allowance for the so-called extraterritorial costs (expenses) that an employee incurs as a result of temporary employment in the Netherlands.
How to calculate the discount of the 30% ruling
This tax-free fee can be calculated in two manners::
The employer may provide 30% of the employee’s salary, including the compensation, tax-free. In other words: 30% of the salary including compensation (100%) is calculated; this 30% is paid as a tax-free allowance;
Example: the salary including the compensation is € 75,000. The untaxed reimbursement of extraterritorial costs is a maximum of 30% x € 75,000 = € 22,500.
The employer may also choose to pay a maximum of 30/70 of the salary excluding the allowance as a tax-free allowance.
Example: the salary excluding the compensation is € 75,000. The untaxed reimbursement of extraterritorial costs is a maximum of 30/70 x € 75,000 = € 32,143.
In short, both calculation methods can give quite a difference in what amount an employee can be paid tax-free, while in both situations € 75,000 is assumed as a wage amount. It is not mandatory to always pay the maximum amount (30%) of tax-free compensation, less is also allowed. However, all excess is in principle taxed.
Moreover, it is not necessary to prove that the tax-free allowance for extraterritorial costs provided is actually used for these costs. In other words, the tax-free allowance could also be used for something else. This is up to the employee himself.
In addition to this reimbursement for extraterritorial costs based on the 30% ruling, an employer is allowed to give the incoming employee a tax-free allowance for school fees for the children. The condition for this is that it must be an international school or an international department of an ordinary school.
Read more on the 30% ruling in our Launch Guide on starting a business in the Netherlands.
