An internationally recruited employee may take home less from the same compensation package in 2027. For some employees, the maximum tax-free expat allowance, commonly known as the 30% ruling, falls to 27%. Employers therefore need to explain what a candidate can expect to receive after tax before making an offer.

The 2027 Tax Plan that the government presented today on Budget Day leaves the expat scheme itself untouched. The reduction to 27% and the higher salary threshold have been law since the 2025 Tax Plan.

Two other measures for 2027 do affect the cost of an international offer: the new employer levy on fossil-fuel company cars and the larger work-related costs allowance. Today’s package adds a longer transitional period for the car levy, the end of the tax-free staff discount, and a higher tax-free travel allowance. Their combined effect now deserves a place in hiring budgets and compensation discussions.

For an organization recruiting a CFO, operations director, or senior technical specialist from abroad, the practical question is simple. Does the offer remain compelling once the candidate works through the full package?

Who moves to 27% in 2027

In 2026, qualifying employers can pay up to 30% of an eligible employee’s wages including the tax-free allowance without tax. The Dutch Tax Administration explains the calculation basis. The percentage applies to wages before the allowance is separated out.

From January 1, 2027, the applicable rules depend on when the scheme was first applied. The Dutch government’s overview and the Tax Administration’s payroll newsletter, section 6, distinguish three groups:

A new participant starting in 2026 therefore does not secure five years at 30%. Their maximum will generally fall to 27% in 2027 as well.

Salary thresholds and the statutory cap on the allowance also matter. In 2026, taxable annual wages must be at least €48,013, excluding the allowance; for employees under 30 with a master’s degree the threshold is €36,497. For employees who started in 2025 or later, the threshold rises in 2027 to €50,436 at 2024 price levels, still to be indexed. The allowance is calculated on wages up to the WNT cap of €262,000 (2026), so at most €78,600 tax-free per year.

Separately, January 1, 2027 also closes the last window for partial non-resident taxpayer status. That election was abolished in 2025; only employees who already used the ruling before 2024 could still opt for it in 2025 and 2026. From 2027, every expat is taxed as a Dutch resident for Box 2 and Box 3, which includes savings, investments, and substantial shareholdings outside the Netherlands. For candidates with assets or shareholdings abroad, this often weighs more heavily than the step from 30% to 27%.

Check eligibility for each candidate. Recruitment from abroad alone is insufficient: expertise, salary, and previous residence are among the relevant factors. A highly skilled migrant permit does not automatically qualify an employee for the expat scheme.

Pay particular attention to the distance requirement. The candidate must have lived more than 150 kilometers from the Dutch border for at least 16 of the 24 months before the first working day. Candidates from Belgium, Luxembourg, northern France, and large parts of Germany therefore do not qualify.

What the reduction means for take-home pay

Consider a simplified example with annual wages of €100,000, including the expat allowance. Assume the employee qualifies for the full percentage throughout the year and the calculation basis stays the same.

In this example, €3,000 moves into taxable wages. At a marginal tax burden of 50%, assumed here solely for illustration, take-home pay falls by roughly €1,500 a year, or €125 a month. Everything else stays unchanged. This is our own illustrative calculation; actual outcomes depend on tax rates, tax credits, and the structure of the compensation package.

The employer’s exposure also depends on the agreement with the employee. With a fixed total package, take-home pay may fall. A net pay guarantee may require a larger employer budget. Model both sides before a salary indication becomes a commitment.

Explain how the offer develops over time

Our recommendation is to address the tax benefit explicitly when preparing an international search. Four decisions help turn that into a workable offer.

Model the offer before negotiations. Ask payroll or a tax advisor to compare expected take-home pay at the start with the position from 2027. Include the end of the scheme. A ruling lasts no more than five years, and previous residence or work in the Netherlands can shorten that period. The Tax Administration explains validity and annual eligibility checks.

Decide how to handle the difference. Set the available budget for salary, relocation, or temporary support. Assess any adjustment against the role’s salary range and comparable employees. This helps prevent a single negotiation from setting compensation policy by default. If the actual extraterritorial costs demonstrably exceed the fixed allowance, you may reimburse those costs tax-free instead of applying the scheme. The choice is made per calendar year.

Make the role and relocation practical to assess. Candidates need to understand their decision-making authority, available resources, and development opportunities. Discuss relocation support and the implications for their family as well. International school fees remain separately exempt alongside the scheme. These factors help determine whether an international move is workable.

Include existing employees. Identify who will be affected from 2027 and discuss the expected impact before the first payslip of the new year. Account for differences in transitional protection and the remaining duration of each ruling. For employees who used the ruling before 2024, 2026 is also the last year of partial non-resident status.

Include the company car in employer costs

From January 1, 2027, employers pay an additional levy, the pseudo final levy, on fossil-fuel passenger cars first made available to an employee on or after that date. The levy applies as soon as the employee may also use the car privately; commuting counts as private use. The annual rate is 12%, normally calculated on the car’s list value including VAT and vehicle purchase tax, known as BPM. Hybrids are included; zero-emission cars are excluded. The Netherlands Chamber of Commerce explains the levy.

For a new car with a list value of €50,000, a full year subject to the levy adds €6,000 to employer costs. The employee’s existing taxable benefit for private use is separate.

Cars already made available by the same employer before 2027 have transitional protection until September 17, 2030 under the enacted rules. The 2027 Other Tax Measures Bill published on Budget Day proposes extending this to January 1, 2031. That extension still requires parliamentary approval.

Include the levy when setting a candidate’s car budget. When considering an electric alternative, also assess range, charging access, and the travel the role requires.

The additional WKR allowance is modest

From 2027, the discretionary allowance under the Dutch work-related costs scheme, or WKR, rises from 2% to 2.16% of the first €400,000 of the taxable wage bill. The rate above that amount remains 1.18%. At a €400,000 taxable wage bill, the allowance increases from €8,000 to €8,640: €640 more for the employer as a whole. The Dutch government explains the increase.

That provides some room for employee benefits, but it is modest against the cost of an individual international offer. Check which expenses qualify for specific exemptions, which do not use the discretionary allowance. Exceeding that allowance triggers an 80% employer levy on the excess; see the Tax Administration’s explanation of the WKR.

The 2027 Tax Plan also proposes removing the specific exemption for staff discounts on an employer’s own products from January 1, 2027. That exemption currently covers a 20% discount up to €500 a year. If adopted, these discounts could use more of the available WKR allowance.

One specific exemption moves the other way. The same Tax Plan raises the maximum tax-free travel allowance from €0.23 to €0.25 per kilometer, permanently and with retroactive effect to January 1, 2026, formalizing a higher rate the government already approved by decree in May. Employers are not obliged to pay it, and for a senior hire the amount is modest. It does apply alongside the 30% ruling, since commuting costs fall outside the extraterritorial costs the ruling covers, which makes it one of the few levers in a 2027 offer that improves the net position rather than reducing it. The Dutch government summarizes the travel measures in the 2027 Tax Plan.

A credible offer starts before the search

The reduction to 27% makes careful preparation for international hiring more valuable. Before starting the search, establish the total package you can sustain, how take-home pay develops over time, and which support you can deliver. This gives candidates a clear picture of the move while keeping the employer budget under control.

This article is general information for employers, not tax advice. Have the outcome for a specific situation checked by your tax advisor or payroll provider. Amounts and percentages reflect the position as at September 15, 2026.