30% ruling information for the employer

If your employee is eligible for the 30% ruling, you may pay him or her a maximum of 30%of the wages as a tax-free allowance for extraterritorial expenses, without the need to submit further evidence. This involves 30%of the wages from present employment including the allowance, which means 30/70 of the wages for payroll tax purposes.

An example
The wages excluding the allowance amount to € 40,000. The tax-free allowance for extraterritorial expenses will then be 30/70 x € 40,000 = € 17,143.

This is subject to the condition that the employee is not entitled to double tax relief in respect of those taxable wages. In other words, these wages must be fully taxable in the Netherlands.

Paying the allowance in addition to the wages

The tax-free allowance should be paid separately from the wages. To this end, the agreed wages may be reduced in accordance with employment law. An administrative division of the wages into a wage component and a tax-free allowance component for extraterritorial expenses is not permitted.

Extraterritorial expenses

You can pay the tax-free allowance to cover extraterritorial expenses. If the 30 percent facility applies, you are not required to retain documentary evidence. If you use the 30 percent facility, you are not allowed to pay the actual extraterritorial expenses tax-free as well.

If the total extraterritorial expenses exceed the allowance paid under the 30 percent facility, there is a possibility to reimburse the actual expenses. In that case, however, you will have to provide evidence for these extraterritorial expenses. If you can demonstrate that the expenses exceed 30 percent, the expenses actually incurred can be reimbursed free of tax. In this connection, there is no time restriction for the reimbursement of double housing costs.

The following costs qualify as extraterritorial expenses:

  • additional costs of living because prices in the country of work are higher than those in the country of origin. Examples include the additional costs of meals, gas, water and electricity
  • costs of a familiarization trip to the new country of work, whether or not with the family, for instance in order to find housing or a school
  • costs of applying for or converting official personal documents, such as residence permits, visas and driving licences
  • costs of medical examinations and vaccinations required for the stay in the new country of work
  • double housing costs if the employee continues to live in the country of origin. These could be hotel expenses, for example
  • additional (initial) housing costs
  • storage costs for the household effects that are not moved to the new country of work
  • costs of travelling to the country of origin, for instance for family visits or family reunification
  • additional costs for the completion of a tax return, if this is more expensive than having the tax return completed by a comparable tax consultant in the country of origin
  • costs of a training course in order to learn the language of the new country of work, both for the employee and for the family members residing with him
  • additional (non-business) call charges for telephone calls to the country of origin

No extraterritorial expenses

The following items do not qualify as extraterritorial expenses and are therefore cannot be reimbursed free of tax:

  • secondment allowances, bonuses and comparable allowances (foreign service premium, expat allowance, overseas allowance)
  • capital losses
  • purchase and selling costs of a property (reimbursement of house purchase costs, broker’s fee)
    compensation for higher tax rates in the country of work (tax equalisation)

Tax-free reimbursements in addition to the 30 percent facility

In addition to the 30 percent facility, the school fees for an international school or for the international department of an ordinary school can be reimbursed free of tax.

This is permitted if:

  • the curriculum at the school (department) is based on a foreign system
  • the school (department) is in principle only open to children of seconded employees

The following costs, among others, may also be reimbursed free of tax:

  • removal costs and the costs of the temporary storage and transfer of the household effects
  • costs of a familiarization visit by the employee to the business in the country of work
  • costs of the application for or conversion of a work permit or a highly skilled migrant permit
  • commuting expenses (expenses for (regular) commuting)
  • telephone line rental costs
  • costs of business meals


The 30% ruling also applies to the employee insurance contributions. If your employee is insured in the Netherlands under the employee insurance schemes, you are not required to deduct employee insurance contributions from the amount of the 30% tax-free allowance.

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