Dutch tax for Australians and the 30% ruling

Dutch tax rates look scary on paper. Tax credits and the expat ruling soften the blow, and the ATO hasn't forgotten about you either.

The short version

Dutch income tax on work (Box 1) runs at 35.75%, 37.56% and 49.50% in 2026 for people under state pension age [1].
Two big tax credits, the general tax credit and the labour tax credit, cut the tax you actually pay, especially on low and middle incomes [1].
The 30% ruling, officially the expat scheme, lets your employer pay up to 30% of your salary tax-free if you meet a salary test and the 150 km rule [2].
From 1 January 2027 the maximum drops to 27% for most people, with transitional rules for some earlier arrivals [3][4].
Leaving Australia doesn't automatically end your Australian tax residency. The ATO applies its own tests [5].

How the Dutch tax system is built

The Netherlands taxes income in three "boxes", each with its own rules.

Box	What it covers	2026 rate
Box 1	Income from work and your home	35.75% to €38,883; 37.56% to €78,426; 49.50% above [1]
Box 2	Income from a substantial shareholding (usually 5% or more of a company)	Separate rates; relevant mainly to business owners
Box 3	Savings and investments	36% on a calculated return, not on your actual gains [1]

The rates above apply if you're under the Dutch state pension (AOW) age [1]. Your employer withholds wage tax and national insurance contributions from each pay, so for many employees the annual return is a reconciliation rather than a big bill.

Tax credits do a lot of the work

The headline rates don't tell the full story. In 2026, the general tax credit (algemene heffingskorting) is worth up to €3,115 and phases out to zero at €78,426 of taxable income. The labour tax credit (arbeidskorting) is worth up to €5,685, peaking at €45,592 of earned income and phasing out at €132,920 [1]. On a middle income, those credits pull your effective rate well below the bracket rate.

Box 3 in one paragraph

Box 3 doesn't tax the interest you actually earned. It taxes a deemed return on your savings and investments, at 36% for 2026 [1]. The system has been through court challenges and reforms in recent years, so if you hold significant savings or shares, get advice on how your assets will be treated.

The 30% ruling (the expat scheme)

This is the one every Australian in Amsterdam asks about. Your employer can pay up to 30% of your salary as a tax-free allowance for the extra costs of working abroad [2]. In practice, that's a meaningful lift in take-home pay.

Who qualifies in 2026

Condition	2026 rule
Recruited from abroad	You must be hired from outside the Netherlands [2]
Salary test	Taxable salary above €48,013 a year, not counting the tax-free allowance [2]
Under-30 with a master's	Taxable salary above €36,497 if you're under 30 with a Dutch academic master's or an equivalent foreign degree [2]
150 km rule	You lived more than 150 km from the Dutch border for more than 16 of the 24 months before you started work [2]
Duration	Up to 5 years, shortened by earlier Dutch residence or work [2]
Cap	Maximum tax-free allowance €78,600, reached at a salary of €262,000 [2]

Australia is a long way from the Dutch border, so most Australians recruited straight from home pass the 150 km rule easily. Aussies moving from London should check carefully, because residence in parts of the UK doesn't count towards the 16 months [2].

How to apply

Agree it in your contract. Your employer applies with you, and your employment contract should record that you accept the consequences of the ruling [6].
Apply quickly. If you apply within four months of starting work, the ruling applies from your start date. Apply later and it only starts from the month after approval [6].
Check the salary test after the allowance. The threshold applies to your taxable salary once the 30% is taken out, not your gross package [6].
Wait for the decision. The Tax Administration aims to respond within eight weeks [2].
Change jobs carefully. If you move to a new employer outside your old employer's group, the new job must start within three months and you must apply again within four months of starting [2].

What changes in 2027

From 1 January 2027, the maximum tax-free share falls from 30% to 27% [3][4]. How it affects you depends on when your ruling started [4]:

Ruling started before 1 January 2024: you can generally keep 30% for the rest of your ruling period.
Ruling started on or after 1 January 2024: 30% through 2026, then 27% from 2027.
New rulings from 2027: 27% maximum.

The salary thresholds also change for new eligibility from 2027 and are indexed each year [4]. If you're negotiating a 2027 start date, ask your employer to model your pay on 27%, not 30%.

The trade-offs

A lower taxable salary isn't all upside. Benefits tied to your taxable salary, such as unemployment and disability benefits and some pension accrual, may be lower [6]. Partial non-resident status, which once let ruling holders keep most foreign savings out of Box 3, can no longer be chosen since 1 January 2025, and the transition for earlier holders ends after 2026. In practice, Box 2 and Box 3 now apply to you like any other resident [3][6]. On the plus side, ruling holders may swap a foreign driving licence for a Dutch one without a test, and employers can pay international school fees tax-free [6].

Don't forget the ATO

Moving to Amsterdam doesn't end your Australian tax story.

Are you still an Australian tax resident?

The ATO uses four tests: the resides test, the domicile test, the 183-day test and the Commonwealth superannuation test. Keeping a home, family or major assets in Australia can mean you stay an Australian resident for tax purposes, even while living overseas [5]. If your status changes during the year, you report the change in that year's return and get a pro-rata tax-free threshold [5].

If you become a foreign resident

Once you're a foreign resident, you generally don't report your Dutch salary to the ATO [5]. Australian-source income is different. Rent from an Australian property, for example, is taxed at foreign resident rates: 30% from the first dollar up to A$135,000 in 2025–26, with no tax-free threshold [7]. Australian interest and dividends are usually subject to withholding tax [5].

HECS-HELP still follows you

If you have a HELP debt, you may need to report your worldwide income so repayments can be worked out [5]. Moving to Amsterdam doesn't wipe it.

Double tax

Australia and the Netherlands have a tax treaty that decides which country gets first go at different kinds of income. How it applies depends on your residency in each country, so this is where a cross-border tax adviser earns their fee.

Common mistakes Aussies make

Assuming the 30% is automatic. It isn't. Your employer has to agree and apply.
Missing the four-month window. Apply late and you lose months of tax-free allowance [6].
Comparing gross salaries across countries. Compare take-home pay after Dutch tax, health insurance and any ruling.
Forgetting Australian rental income. Foreign resident rates apply from the first dollar [7].
Ignoring Box 3. Big savings balances can create a Dutch tax bill even if your bank paid little interest.

Want to know how others handled their first Dutch tax return? Ask in Cooee Netherlands, our Facebook group for Australians in the Netherlands. Members share which advisers they used and what tripped them up.

Dutch tax basics for Australians: brackets, boxes and the 30% ruling