30/20/10 Reduction Schedule

Key Takeaways

Since January 1, 2024, new 30% ruling grants follow a 30/20/10 structure over 60 months.
The first 20 months: 30% tax-free. Next 20 months: 20%. Final 20 months: 10%.
Transitional rules protect people who had the ruling before 2024 — they may keep the full 30% for the entire duration.
The reduction applies to the tax-free percentage only — it does not shorten the total 60-month period.
Understanding which group you fall into is critical for financial planning.

The New 30/20/10 Structure

Starting January 1, 2024, the Dutch government changed the 30% ruling from a flat 30% benefit to a stepped reduction:

Phase	Months	Tax-Free Percentage	Duration
Phase 1	1–20	30%	20 months
Phase 2	21–40	20%	20 months
Phase 3	41–60	10%	20 months

The total duration remains 60 months (5 years). What changes is the percentage of your salary that is paid tax-free.

Financial Impact of the Reduction

The step-down significantly reduces the total benefit compared to the old system. Here is a comparison for someone earning €75,000 gross per year:

Old System (30% for 60 Months)

Period	Tax-Free Amount (Annual)	Total Over Period
All 60 months	€22,500	€112,500

New System (30/20/10)

Period	Tax-Free Amount (Annual)	Total Over Period
Months 1–20	€22,500	€37,500
Months 21–40	€15,000	€25,000
Months 41–60	€7,500	€12,500
Total		€75,000

The total tax-free amount over 5 years drops from €112,500 to €75,000 — a reduction of one-third. In terms of actual tax savings, the difference is approximately €13,000–€15,000 less over the full 60-month period, depending on your tax bracket.

Good to know

The reduction was introduced as part of a broader effort to limit tax benefits for high earners and international workers. The government argued that extraterritorial costs decrease the longer you live in the Netherlands, so a declining benefit better reflects reality.

Who Is Affected?

Group 1: New Ruling from January 1, 2024 Onward

If your 30% ruling was granted on or after January 1, 2024, you are subject to the full 30/20/10 schedule. No exceptions.

Group 2: Ruling Granted Before January 1, 2024

If your ruling was granted before January 1, 2024, transitional rules apply. The exact treatment depends on when your ruling was granted and specific legislative provisions:

What Actually Happened: The 30/20/10 Reversal

The Dutch parliament subsequently reversed the 30/20/10 step-down for 2024–2026:

For 2024, 2025, and 2026: All 30% ruling holders can apply the full 30% rate. The step-down to 20% and 10% does not take effect during these years.
Employees who had the ruling applied in the final wage period of 2023: These workers retain the full 30% rate even after 2026, for the remainder of their ruling period.
From 2027 onward: A new 27% ruling replaces the 30/20/10 structure entirely. New and existing ruling holders (except those grandfathered at 30%) will have a maximum tax-free percentage of 27%.

When Ruling Was Granted	Treatment in 2025–2026	Treatment from 2027
Ruling applied in final wage period of 2023	30%	30% (grandfathered for remaining duration)
Ruling started in 2024	30%	27%
Ruling starts in 2025–2026	30%	27%
Ruling starts in 2027+	N/A	27%

Warning

The legislative landscape around the 30% ruling has changed multiple times in 2024–2025. The information above reflects the adopted legislation as of early 2026. Always verify the current rules on the Belastingdienst website or with a tax advisor, especially if your ruling was granted near a transition date.

How the Phases Work in Practice

Phase Transitions

The transition between phases happens automatically. You do not need to submit a new application or notify the Belastingdienst. Your employer adjusts the payroll when the next phase begins.

Example timeline for a ruling starting April 1, 2024:

Phase	Period	Tax-Free %
Phase 1	April 2024 – November 2025	30%
Phase 2	December 2025 – July 2027	20%
Phase 3	August 2027 – March 2029	10%
End	April 2029	Ruling expires

Mid-Month Transitions

If a phase transition falls in the middle of a month, the entire month uses the new percentage. For example, if Phase 2 starts on December 1, the December payslip already uses 20%.

The 30/20/10 Schedule and Your Payslip

Here is how each phase appears on your monthly payslip for a €6,000 gross monthly salary:

Payslip Line	Phase 1 (30%)	Phase 2 (20%)	Phase 3 (10%)
Gross salary	€6,000	€6,000	€6,000
Tax-free allowance	€1,800	€1,200	€600
Taxable salary	€4,200	€4,800	€5,400
Approximate loonheffing	€1,014	€1,236	€1,458
Approximate net salary	€4,686	€4,464	€4,242

Each step-down costs approximately €222 per month in this example. Over 20 months, that is roughly €4,440 less net income per phase.

Tip

Start planning for the reduction well in advance. When you enter Phase 2, your net salary drops noticeably. If you have a mortgage or fixed expenses calibrated to your Phase 1 net income, the reduction can create cash flow pressure. Build a buffer during Phase 1.

Interaction With Other Rules

The WNT Cap (Balkenende Norm)

The WNT cap limits the salary on which the tax-free percentage can be applied. In 2026, the cap is €262,000. The 30/20/10 percentages apply to your salary up to this cap. Any salary above the cap is fully taxed regardless of the phase.

Minimum Salary Requirement

The minimum salary threshold (€46,107 in 2026) is always checked against your pre-ruling taxable salary — not the salary after applying the tax-free percentage. The step-down does not affect whether you meet the minimum.

Partial Non-Resident Status

Your eligibility for partial non-resident taxpayer status is not affected by the 30/20/10 schedule. You can elect partial non-resident status regardless of which phase you are in, as long as you have a valid 30% ruling.

Strategies for Managing the Reduction

1. Negotiate a Higher Gross Salary

Some employers are willing to compensate for the 30/20/10 reduction by increasing your gross salary at each phase transition. This is a negotiation point — include it in your employment contract if possible.

2. Front-Load Tax-Advantaged Decisions

During Phase 1, when the benefit is highest, prioritize decisions that benefit from the lower taxable income:

Maximize pension contributions (which are pre-tax)
Consider the timing of any large income events (bonuses, stock options)

3. Build Savings During Phase 1

Treat the Phase 1 net income as temporarily higher than your long-term norm. Save the difference between Phase 1 and Phase 3 net income to smooth the transition.

4. Review Your Tax Situation at Each Transition

Your tax credits (general tax credit, labour tax credit) change as your taxable income changes with each phase. The credits may partially offset the benefit reduction. Review your full tax picture at each transition.

Common Mistakes

Not knowing which transitional group you belong to — Check your ruling decision letter for the grant date and verify which rules apply.
Failing to plan for the income reduction — Each phase reduces your net pay. Budget accordingly, especially if you have a mortgage.
Assuming the employer will automatically adjust correctly — While payroll systems should handle phase transitions, verify your payslip when a transition occurs.
Not negotiating salary adjustments — If you joined under the assumption of a flat 30%, discuss compensation adjustments with your employer.
Confusing the 30/20/10 schedule with the 60-month duration — The schedule only changes the percentage, not the total duration. The ruling still lasts 60 months.