Global hiring isn’t for the faint of heart. Taxes, relocation and compliance. They’re the invisible walls that slow fast-moving tech firms.
The Netherlands tears those walls down.
For years, its Expat Scheme has helped global companies attract and relocate top talent without losing sleep or profit. Also called the 30% Ruling, the Expat Scheme is the quiet advantage behind some of Europe’s biggest tech success stories.
But this is an evolving scheme, and the rules are changing again. Updates include new income caps, residency rules and a looming 2027 rate drop.
The opportunity is still huge, but only if you understand how to use it.
Let’s break down what’s new, what’s next and how your company can turn Dutch policy into global hiring power.
Why the Netherlands thrives as a tech expansion hub?
The Netherlands isn’t just picturesque canals and windmills. It’s one of Europe’s smartest tech-arena entry points. For firms wanting to scale across Europe, it delivers:
- The highest English proficiency among non-native speakers in Europe. This is ideal for international hires and global coordination.
- A pro-business climate with competitive corporate tax rates and straightforward share-capital rules.
- Deep skills in software development, data science, AI and digital transformation. You’re not just hiring bodies. You’re tapping expertise.
For tech companies looking to hire top global talent, the Dutch expat tax incentive helps raise your net offer, stand out in a crowded market and reduce cost pressure.
What’s really on the table for tech firms?
At its heart, the scheme lets you provide international hires with tax-free allowances (or apply a tax-free portion of salary) to cover “extraterritorial” costs.
This means relocation, schooling, certain medical and housing costs can be treated more favorably.
For tech firms looking to keep pace in the race for talent, this advantage helps you:
- Offer higher net take-home for hires.
- Expand your talent pool internationally, knowing you can give meaningful perks.
- Structure smart compensation + relocation packages that win hires and minimize cost impact.
Here’s a high-level breakdown of the scheme’s benefits:
| Benefit | Why tech firms care | Key caveat |
| Tax-free allowance up to 30% of salary (below cap) | Makes offers more compelling for senior developers/data scientists | Doesn’t replace gross salary; must meet criteria |
| Reimbursement of relocation, schooling, medical costs are tax-free | Helps attract global talent with a real lifestyle draw | Documentation, compliance oversight and approval from the tax office are required |
| Easy entity/talent support landscape | Netherlands is global-ready and familiar to tech firms | Expansion still demands setup, payroll, local regs (e.g., KVK registration, payroll tax returns, etc.) |
Moving with the market: updates you must know
The Netherlands designed the Expat Scheme to adapt to its workforce and labor market realities. It’s not a fixed incentive. It is meant to change so it stays relevant, fair and sustainable.
The changes we saw in 2025 make it clear: the program is focused on targeting highly skilled international talent while balancing local economic needs.
Recent updates you can’t ignore:
- Tax-Free Allowance Stays at 30%: Eligible new hires in 2025 and 2026 can still receive up to 30% of their gross salary tax-free. This ensures tech companies can remain competitive when offering global talent attractive net pay.
- Salary Cap is Set at €246,000: Only the first €246,000 of gross salary qualifies for the allowance. Anything above this earns no additional tax-free benefit. It’s the government’s way of targeting the scheme to the roles that need it most.
- Minimum Salary Thresholds Updated: The updated thresholds ensure that the program focuses on truly highly skilled professionals, aligning with Dutch workforce conditions. To qualify:
- Employees 30+ must earn €46,660 or more per year
- Employees under 30 with a master’s degree must earn €35,468 or more
- Highly Skilled Migrant Scheme Updates: To qualify under the Highly Skilled Migrant scheme (a different but related requirement to the 30% ruling), the 2025 monthly salary thresholds are:
- Employees aged 30+ must earn at least €5,688 per month (excluding holiday allowance)
- Employees under 30 must earn at least €4,171 per month (excluding holiday allowance)
- Partial Non-Residency Abolished: From January 1, 2025, new applicants are considered full Dutch tax residents. This means their worldwide income is taxable. It also removes complexity and ensures fairness for all workers. Existing expats who applied before 2024 can retain partial non-residency until December 31, 2026.
Looking ahead to 2027, the following changes should be anticipated:
- Lower Allowance: Starting January 1, 2027, the allowance will drop to 27%.
- Higher Thresholds: Eligibility thresholds will rise, with specifications to be determined based on market conditions.
Other key considerations:
- High Earners: Even if an employee earns €250,000, the allowance only applies to the first €246,000.
- Employer Changes: Employees switching employers must transfer the ruling within three months to keep benefits intact.
- Specific Expertise Required: Employers must demonstrate that the hire brings skills scarce in the Dutch market.
Implications for tech companies: strategy and planning
For tech companies, especially those hiring globally or setting up in the Netherlands, the updated scheme creates both opportunities and cautions.
The following are the upsides you can tap into:
- 30% Rate Maintained: The 30% rate still stands for 2025 and through 2026. You can market this attractive incentive as part of your offer for senior international talent.
- Employer Branding Boost: Offering the scheme speaks to top talent: “We know how to make relocation and net pay work, globally.” That gives your employer-brand an edge.
- Cost-Effective Compensation: With careful compensation structuring (salary meets threshold, cap respected, allowances correctly applied), you can make competitive offers without blowing your total cost of employment.
Here’s what to watch for going forward:
- Salary Caps: The cap of €246,000 means very senior hires with salaries above that figure will not capture the full benefit. This may reduce the net advantage for the highest paid candidates.
- Partial Non-Residency Removed: Removing partial non-resident status means that international hires with significant wealth and assets will face full Dutch tax on global income. That may reduce the attractiveness of your offer, especially for US and UK citizens with capital abroad.
- Rate Reductions: From 2027 onward the rate drops to 27% and thresholds rise. If you’re planning a hire with a start date near the end of 2026 or the start of 2027, you will need to factor this in.
- Compliance: Payroll and budget plans need updating: your finance, HR and mobility teams must align to ensure compliance. This includes application deadlines, duration limits and documentation. Get it wrong and the tax-free benefit disappears, turning a competitive offer into a costly, messy mistake.
The practical steps tech firms should take
- Audit Your Hiring Targets: Which roles in your global org can benefit from the scheme? Map out senior developers, data scientists, AI specialists, etc.
- Check Salary Bands: Ensure salary meets the minimum threshold and doesn’t exceed the cap unknowingly.
- Build Out Your Offer Package: Use the scheme as your lever for recruitment. When you reach global candidates, build your offer around “net take-home” + relocation + schooling + mobility benefits.
- Engage a Payroll and Visa Partner Early: The employer must apply for the ruling. You don’t want to leave this to chance. Seek out local expertise.
- Communicate Clearly to Candidates: Avoid surprises. Inform them about the scheme cap, rate, future changes, the drop to 27% in 2027 and the removal of partial non-residency. That transparency helps trust and retention.
- Plan ahead to 2027: If you have hires starting in 2026 or later, start modeling both scenarios (30% vs 27%) and build flexibility into your offers.
The real numbers: what the incentive can do
Let’s bring this home. Suppose your tech firm hires global talent in two typical roles: Senior Software Engineer and Mid-Level UX Designer.
Here’s a simplified model for salaries under the cap, so the full 30% is available. While personal tax circumstances may differ, these examples highlight how the scheme affects net salaries:
| Role | Gross Salary | Without Scheme (approximately) | With Scheme (30%) | Net Gain |
| Senior Software Engineer | €75,000 | Tax & social ~€31,500 → Net ~€43,500 | Taxable salary ~€52,500 → tax ~€19,000 → Net ~€56,000 | +€12,500 |
| Mid-Level UX Designer | €45,000 | Tax & social ~€15,750 → Net ~€29,250 | Taxable salary ~€31,500 → tax ~€9,450 → Net ~€35,550 | +€6,300 |
Please note: Figures are indicative and depend on individual tax situations.
The above scenarios are just illustrative. They assume the tax-free allowance is fully used, the role meets criteria and the salary is under the cap.
From 2027 onward, if the rule drops to 27%, the gain shrinks. If the salary is above cap, the benefit is reduced.
The most common questions we get
What’s the 2025 income cap under the Netherlands Expat Scheme?
For 2025, the Expat Scheme tax-free allowance is capped at 30% of the taxable salary up to the Balkenende norm. This means the maximum tax-free benefit is €73,800 for salaries at or above €246,000.
Can I still claim partial non-resident status?
From January 1, 2025, new applicants and those whose ruling started after January 1, 2024 can no longer opt for partial non-resident status. They are taxed as full Dutch residents for global income and assets. However, those already using the ruling before the end of 2023 can retain partial non-resident status through December 31, 2026.
What changes are planned for 2027?
Starting January 1, 2027, the scheme (renamed the Expat Scheme) will reduce the tax-free allowance to a maximum of 27%. Eligibility thresholds will increase (gross salary minimums: approximately €50,436 for most; ~€38,338 for under-30 with master’s) and the salary cap rules will continue.
Final word: stay agile, hire brilliantly
If you’re scaling your tech team globally, the Netherlands still offers a compelling runway. The tax incentive is real, usable and meaningful. But it’s evolving fast. Your success depends on clarity, strategy and timing.
This isn’t just about hiring the right people. It’s about structuring offers that actually work. Net pay, relocation, schooling and allowances. They all need to be integrated and accounted for.
The scheme isn’t a gimmick. It’s a strategic tool in your compensation playbook. Make sure payroll and HR are aligned so every offer lands cleanly and every hire starts smoothly.
Move fast, plan smart and leverage every advantage. The opportunities are huge but your competition isn’t waiting. Neither should you.
Contact us today to learn how our global recruitment and cross-border solutions can support your business goals.
