The salary criteria for the 30% Rule and the Skilled Migrant Scheme

In practice, the salary criteria for the 30% rule and the Highly Skilled Migrant Scheme are still too often treated as interchangeable. This is incorrect. Both schemes have their own legal framework, their own definition of salary, and their own assessment point in time. This leads to implementation risks, particularly in cases where tax law and immigration law intersect. The 30% ruling assesses specific expertise for tax purposes using an annual income threshold. The Highly Skilled Migrant Scheme assesses, under residence law, whether there is a sufficient, structural, and independent gross monthly salary. As a result, an employee may meet the requirements of one scheme for tax purposes but fail to meet those of the other under immigration law—or vice versa. This article systematically discusses the legal foundations, the various salary criteria, the relevant wage components, the assessment points, the overlap, and the legal consequences of non-compliance. It also addresses recent case law, expert group opinions, and implementation guidance from the Tax and Customs Administration and the IND.

1. Introduction

In international tax advisory practice, the 30% ruling and the Highly Skilled Migrant Scheme are frequently applied together in a single case. This is understandable. Both schemes are relevant when recruiting foreign employees, and both have a salary requirement.

Nevertheless, these are fundamentally different systems. The 30% rule—now generally referred to as the “expat rule” in the Payroll Tax Manual—is a tax deduction rule for extraterritorial expenses. The Highly Skilled Migrant Scheme is an immigration admission scheme for employment in the Netherlands. (2)

This distinction applies to virtually every practical detail. For the 30% ruling, it concerns the taxable annual salary, as assessed under the Wage Tax Act of 1964 (hereinafter: Wage Tax Act 1964). In this article, I define taxable wages as “wages from current employment.” For the highly skilled migrant scheme, this refers to a gross monthly wage in cash, which must be regular, contractually stipulated, and paid monthly. Anyone who uses a single pay stub for both schemes therefore runs the risk of incurring errors under tax or immigration law.

Furthermore, the analysis has become more relevant due to stricter enforcement practices. The Tax and Customs Administration emphasizes the ongoing review of the income threshold under the 30% ruling. The IND emphasizes that, for highly skilled migrants, the actual gross salary remains the determining factor, even when the 30% ruling is applied. These guidelines must be incorporated into the advisory process.

2. The 30% Rule: Nature, Basis, and Expertise Requirement

The 30% rule is codified in Article 31a of the Income Tax Act of 1964 and further elaborated in Chapter 4a of the General Income Tax Regulations of 1965. The rule functions as a rule of evidence for extraterritorial expenses. If the conditions are met, these expenses may be reimbursed on a lump-sum basis up to the legally permitted percentage of the salary from current employment. (3)

The program is open to incoming employees who meet the conditions set forth in Article 10e et seq. of the UBLB 1965. A key condition is that the employee possesses specific expertise that is not available or is in short supply on the Dutch labor market. Under the current system, the regulator has largely defined this open-ended standard through the salary criterion set forth in Article 10eb of the UBLB 1965. In practice, this salary criterion thus serves as the primary basis for assessing specific expertise. (4)

However, that does not mean that the underlying scarcity criterion has completely disappeared. In special cases, factors such as education, relevant experience, and the ratio between the level of compensation in the Netherlands and that in the country of origin may still be relevant. This is particularly true in sectors where the wage criterion is not sufficiently distinctive, because employees in certain positions systematically earn above the salary standard. (5)

Case law concerning dentists illustrates that the assessment of scarcity cannot be reduced solely to a salary comparison. In the Supreme Court decision of November 15, 2013, the focus was not on the current salary criterion, but on the question of whether dentists were in short supply on the Dutch labor market. The literature has pointed out that this case law may retain its significance under the current regulations in cases where the salary criterion is insufficiently distinctive. (6)

For 2026, the standard income threshold for the 30% ruling is more than €48,013. For employees under the age of 30 with a qualifying master’s degree, a reduced threshold of more than €36,497 applies.

For scientific researchers at designated institutions and physicians in residency training, there is no salary standard in the usual sense. (7)

3. The Highly Skilled Migrant Program: Nature, Basis, and Scope

The Highly Skilled Migrant Scheme falls under immigration law. It offers third-country nationals the opportunity to reside and work in the Netherlands as highly skilled migrants, under the responsibility of a recognized sponsor. The scheme is enshrined in the Aliens Act 2000, the Aliens Decree 2000, the Aliens Regulation 2000, and the IND’s implementation practices.

It is important to note that the regulation does not apply to employees who are nationals of an EU member state, an EEA state, or Switzerland. For them, the free movement of workers applies, and a work permit as a highly skilled migrant is not required. (8)

For 2026, the following gross monthly amounts, excluding vacation pay, apply to highly skilled migrants: €5,942 for employees aged 30 or older, €4,357 for employees younger than 30, and €3,122 for the reduced salary threshold. The reduced threshold is not simply linked to age or a master’s degree, but to specific categories under immigration law, such as the “search year” for highly skilled professionals. (9)

Furthermore, the agreed-upon salary must be in line with market rates. This is how the Highly Skilled Migrant Scheme differs from the 30% Rule. The market-rate requirement is in addition to the statutory salary criterion. The IND assesses this as part of the residence permit procedure, based on advice from the UWV if necessary. In doing so, it determines whether the salary is customary, taking into account the position, qualifications, collective bargaining agreement, and comparable positions. Furthermore, since April 2026, when submitting an online renewal application, the employer is no longer required to enter the salary separately but must declare that the salary criterion is met, that the salary is in line with market rates, and that the salary is paid monthly into a bank account in the name of the highly skilled migrant. This change applies to the renewal procedure and does not affect the substantive requirements for the initial application, renewal, or change of employer.

4. Definition of Wages: Annual Wages for Tax Purposes vs. Monthly Wages Under Immigration Law

For the 30% ruling, it is not the gross monthly salary under civil law that applies, but rather the concept of taxable wages. Article 10eb of the UBLB 1965 is based on taxable wages. As a result, in principle, all wage components that are considered part of wages for tax purposes may be relevant to the salary test. This also includes wages in kind, such as an additional tax liability for the private use of a car, and taxable allowances. Conversely, reductions in gross wages, pension deductions, or exchanges under a cafeteria plan can lower the taxable reference wage. (10)

Under the Highly Skilled Migrant Scheme, the definition of “wages” is more limited. It refers to a fixed gross monthly salary paid in cash. Allowances and fixed supplements may be included if they have been agreed upon in writing, are paid monthly, and are transferred to a bank account in the highly skilled migrant’s name. Vacation pay, wages in kind, and uncertain or irregular wages are not included. (11)

The IND has also clarified that ADV or ATV allowances do not count toward the salary criterion. These allowances are not direct payments for work, and the salary that counts must be based on the usual weekly working hours. (12)

The differences are significant in practice. An occasional bonus may be relevant for tax purposes under the 30% rule, but may not be taken into account under immigration law. A gross monthly salary may be sufficient for the highly skilled migrant scheme, but after applying the 30% allowance, it may leave insufficient taxable income to meet the tax income threshold.

5. Review Points for the 30% Rule

The salary threshold under the 30% rule is an annual threshold. However, this does not mean that compliance with the threshold is assessed exclusively at the end of the calendar year. In cases where the period covers only part of a year, the minimum amount applicable over the relevant period must be assessed on a pro-rata basis. It should be recognized that, despite the annual nature of the standard, this is effectively a continuous assessment.

This ongoing assessment is legally enshrined in Article 10ee of the UBLB 1965. Since the amendment effective January 1, 2012, the employee must continue to meet the criteria for an “incoming employee” throughout the entire duration of the program. If the employee no longer possesses specific expertise that is not available or is scarce on the Dutch labor market, the term of the scheme ends at the moment those conditions are no longer met. (13)

In practice, a distinction is made between the preliminary assessment and the ongoing assessment. The preliminary assessment focuses on whether, at the time of hiring or the conclusion of the employment contract, it can be sufficiently determined that the employee will meet the income threshold. The ongoing assessment examines whether the employee continues to actually meet the threshold throughout the term of the contract.

The timing of the assessment is also relevant to the competency requirement. Case law indicates that, in principle, this assessment is based on the time at which the employment contract is concluded. If some time elapses between the conclusion of the contract and the actual start of employment, it must be sufficiently certain at that time that the employee will receive a wage that meets the income threshold as of the agreed-upon start date. (14)

The Court of Appeal in The Hague confirms that the income threshold under the 30% ruling can be assessed on multiple grounds. In the event of a hypothetical change in the withholding agent, it may also be relevant whether the conditions were materially met with a previous employer. Reins and Bulo interpret this as the distinction between the preliminary assessment—the remuneration that can be sufficiently determined at the time of hiring—and the ongoing assessment—the annual salary received for tax purposes. (15)

6. Time of Enjoyment, Net Agreements, and Grossing Up

The ruling of the Court of Appeal in The Hague dated February 20, 2025, is also relevant to the question of which wage components should be allocated to which time period. The court ruled that net payments must be converted to gross amounts for the purpose of assessing the wage standard. Furthermore, payments relating to previous years but paid out later must be allocated to those previous years if they were already due and collectible. (16)

The key point is that the tax-related “time of enjoyment” under Article 13a of the 1964 Income Tax Act can be decisive. “Enjoyment” is a broader concept than “receipt.” Claims that are already due and collectible may therefore count toward the salary threshold, even if actual payment occurs later. (17)

The annotation in *Vakstudie Nieuws* offers a useful clarification regarding the terminology of “grossing up.” From a tax perspective, the issue ultimately does not concern gross or net wages as separate concepts, but rather the question of which entitlements and allowances constitute wages. If the employer pays taxes or social security contributions, the value of that arrangement may constitute part of the wages. The practical result may therefore be the same as grossing up, but the tax basis is the concept of wages itself. (18)

7. Review Dates for the Highly Skilled Migrant Program

Under the Highly Skilled Migrant Scheme, the emphasis is on monthly compliance with the salary requirement. The IND states that the highly skilled migrant must meet the applicable salary requirement every month. The salary must be paid by the recognized sponsor and deposited into a bank account in the employee’s name. (19)

The applicable standard amount is determined based on the relevant application date. In the event of an extension or a change of sponsor, the indexed standard amounts apply in accordance with the system used by the IND. For employees under the age of 30, the “under-30” criterion remains in effect with the same employer, even if they turn 30 at a later date. If the sponsor changes, the applicable standard amount is reassessed. A separate set of rules applies to the reduced salary criterion. (20)

The monthly assessment under the Highly Skilled Migrant Scheme thus contrasts with the annual approach of the 30% Rule. This is an important distinction for payroll administration. Under certain circumstances, the tax scheme can be adjusted or recalculated on an annual basis. The immigration law scheme, however, requires consistent monthly compliance.

8. Overlap Between the Two Programs

The overlap between the 30% rule and the Highly Skilled Migrant Scheme poses a particular risk when the 30% rule is applied by reducing the gross salary. From a tax perspective, such a structure may be viable, provided that the taxable salary—after applying the tax-free allowance—remains above the income threshold. Under immigration law, however, the actual gross salary remains the determining factor.

In Information Bulletin IB 2025/9, the IND explicitly confirmed that application of the 30% rule does not result in a gross salary below the wage criterion being accepted. Reducing the gross salary is a decision made by the employer. Even after applying the 30% rule, the gross salary must be at least equal to the applicable salary threshold. Only in the case of a genuine net salary agreement may the salary be recalculated from net to gross, but even then, the calculated gross salary must meet the standard. (21)

This is also relevant in the case of retroactive application of the 30% rule. If the tax rule is applied retroactively and the gross salary is recalculated administratively based on a net salary agreement, it must always be assessed whether the relevant gross salary remains sufficient for the IND.

The GVVA framework underscores this compliance obligation. The GVVA combines the residence permit and the work permit into a single decision. The IND assesses the application and, where necessary, seeks advice from the UWV regarding labor market considerations. The employer must ensure that the employee meets the requirements, not only at the time of application but also thereafter. (22)

9. Special Situations

9.1 Part-Time Work

The income threshold for the 30% ruling is not adjusted based on the number of working hours. Even for part-time work, the full annual threshold remains the basis. If an employee reduces their working hours during the year and their taxable wages consequently fall below the applicable threshold, this may result in the ruling no longer being applicable for that year. The Payroll Tax Manual states this based on the general rule that the expat rule ceases to apply if the salary in a given year is lower than the income threshold, unless a specific exception applies. (23)

Under the Highly Skilled Migrant Scheme, the salary requirement is not reduced on a pro rata basis when working hours are reduced. The decisive factor remains whether the highly skilled migrant receives the applicable gross standard amount each month.

9.2 Maternity Leave and WAZO Leave

For certain types of leave, there is an explicit exception under the 30% rule. If the employee’s salary is lower due to maternity leave or similar types of leave, the assessment is based on the salary the employee would have earned without such leave. (24)

With regard to the Highly Skilled Migrant Scheme, the IND also clarified in 2025 that, under certain circumstances, a temporary reduction in salary will not affect the residence permit if it results from leave taken under the Work and Care Act (WAZO) or from the exercise of the right to strike. The employer must report this to the IND within four weeks and carefully document the situation. (25)

9.3 Illness

The 30% rule does not include a comparable explicit exception for illness. If the salary decreases during illness and the taxable annual salary consequently falls below the income threshold, the general rule is that the rule cannot be applied for that year. Only if the employer supplements the salary in such a way that the taxable salary remains above the threshold can the rule be maintained. This conclusion follows from the exhaustive nature of the exceptions listed in the Handbook. (26)

The Highly Skilled Migrant Scheme does not include a comparable explicit exception to that for WAZO leave or strikes. If the salary during illness falls below the applicable monthly salary threshold, this may affect the residence permit. This risk can only be avoided if the employer supplements the monthly gross salary so that the highly skilled migrant continues to meet the applicable standard.

10. Consequences of Noncompliance

10.1 Tax Consequences Under the 30% Rule

If the income threshold for the 30% rule is not met, the rule has been incorrectly applied to that extent. This may result in corrections to previous payroll tax returns, additional assessments of payroll tax and social security contributions, tax interest, and possibly penalties. The Payroll Tax Manual explicitly links failure to meet the income threshold to corrections to previous returns. (27)

However, a subsequent correction via correction notices may be possible under certain circumstances. This applies in particular when the employer can demonstrate that an administrative error occurred, in which an amount that was too low was paid as employee wages and an amount that was too high was recorded as a specifically exempt allowance. The decisive factor in such cases is whether the intended relationship under labor law between gross wages and the 30% allowance was established with sufficient clarity and in advance.

The effect of the addendum to the employment contract is essential in this regard. If the addendum specifies that compensation is provided only to the extent and for as long as it can be exempted from taxation, an error in payroll processing can be corrected. If there is no such basis under labor law, or if it cannot be plausibly demonstrated that a mistake occurred, correction through retroactive reclassification becomes considerably more difficult. (28)

10.2 Consequences under immigration law

Under the Highly Skilled Migrant Scheme, failure to meet the salary requirement can have far-reaching consequences. The residence permit may be denied, not renewed, or revoked retroactively. Furthermore, this may constitute a violation of the Wav, which carries the risk of administrative fines.

In 2025, the District Court of The Hague ruled that failure to pay the required salary for highly skilled migrants can also have consequences under labor law. In that case, an employee had been hired as a highly skilled migrant but was not receiving the required salary. The revocation of the residence permit was partly attributable to the employer, as a result of which the subsequent summary dismissal on that basis was deemed invalid. (29)

The Administrative Law Division has previously confirmed that failure to comply with the salary criterion can lead to enforcement under the Wav. Under the 2025 Wav Policy Rule on the Imposition of Fines, the amount of the fine is determined based on the severity of the violation and the degree of culpability, but the obligation itself remains strict. (30)

11. Key Considerations for Consulting Practice

In practice, this means that two separate calculations are always required. For the 30% ruling, it must be determined whether the annual taxable salary, after applying the tax-free allowance, exceeds the taxable income threshold. For the highly skilled migrant scheme, it must be assessed whether the structural gross monthly salary in cash meets the applicable IND standard amount.

The employment contract and addendum must accurately reflect the intended tax and immigration law treatment. The addendum must clearly specify which portion of the compensation constitutes wages, which portion is designated as a 30% allowance, and that this designation applies only to the extent and for as long as it is permitted under tax law. For highly skilled migrants, it must also be ensured that the gross salary, excluding the 30% allowance, continues to meet the IND standard.

Young employees require special attention. The lower threshold under the 30% rule is tied to age and a qualifying master’s degree. The reduced salary requirement under the Highly Skilled Migrant Scheme is tied to specific categories under immigration law. These regimes should not be conflated.

Finally, monitoring must be properly managed throughout the term of the arrangement. Changes in salary, part-time work, illness, leave, a change of employer, retroactive application of the 30% rule, and correction notices can all affect the applicability of one or both of these arrangements.

12. Conclusion

The salary criteria for the 30% rule and the highly skilled migrant scheme are only superficially similar. The 30% ruling is tax-oriented and is based on annual taxable income, within a system of preliminary assessment, ongoing assessment, and the tax assessment date. The Highly Skilled Migrant Scheme is immigration law-oriented and is based on a fixed gross monthly salary in cash.

It is precisely in international cases where both sets of regulations overlap that this distinction is crucial. A salary structure may be defensible from a tax perspective but still fall short under immigration law. Conversely, an employee may exceed the threshold under immigration law but, through the application of the 30% allowance, fall below the income threshold for tax purposes.

The salary criterion is therefore not merely an administrative formality, but a core component of comprehensive tax and immigration compliance. For experienced advisors, the added value lies precisely in recognizing this overlap in a timely manner and ensuring that the chosen compensation structure is legally sound.

Author: Frank Mélotte, Nassau Tax & Global Mobility (1)
Published in: Over de grens, Issue 3, June 12, 2026

Notes:

1. Frank Mélotte is a partner at Nassau Tax & Global Mobility

2. Dutch Tax Authority, Payroll Tax Manual 2026, section 19.4.

3. Section 31a of the Income Tax Act of 1964 and Section 10e et seq. of the General Income Tax Regulations of 1965.

4. Art. 10eb UBLB 1965.

5. Art. 10eb, para. 4, UBLB 1965. See also Letter from the State Secretary for Finance dated November 3, 2011, V-N 2011/56.4, p. 92.

6. Supreme Court, November 15, 2013, ECLI:NL:HR:2013:1127, FutD 2013-2771, BNB 2014/51, with a note by A.L. Mertens. See also A.L. Mertens in his note on this judgment, in which he observes that the judgment may retain its significance even under the text of Article 10eb of the UBLB 1965, effective as of January 1, 2012, if the wage criterion is not a distinguishing criterion.

7. Dutch Tax and Customs Administration, Payroll Tax Manual 2026, section 19.4.1.

8. Art. 45 TFEU. See also IND, The Residence Permit for Work as a Highly Skilled Migrant, 2025, p. 1.

9. IND, Business Newsletter, December 18, 2025: New standard amounts for highly skilled migrants effective January 1, 2026.

10. Dutch Tax and Customs Administration, Payroll Tax Manual 2026, Chapter 4 and Section 19.4.1.

11. IND, The Residence Permit for Work as a Highly Skilled Migrant, 2025, pp. 2–4.

12. IND, Business Newsletter, March 25, 2025: ADV or ATV allowances do not count toward the salary requirement for highly skilled migrants.

13. Art. 10ee UBLB 1965; Decree of December 22, 2011, Stb. 2011, 677, Art. IV.

14. Supreme Court, April 28, 2006, ECLI:NL:HR:2006:AU2303, FutD 2006-0783, BNB 2006/264, with a commentary by P.H.J. Essers.

15. D. Reins and N. Bulo, “The Taxable Date Is Decisive for the Salary Threshold of the 30% Rule,” Over de Grens 2025/54.

16. Court of The Hague, February 20, 2025, ECLI:NL:GHDHA:2025:350, FutD 2025-0677, V-N 2025/24.5.

17. Art. 13a of the Income Tax Act of 1964.

18. Editorial Staff of Vakstudie Nieuws, note on the Court of Appeal in The Hague, February 20, 2025, V-N 2025/24.5.

19. IND, The Residence Permit for Work as a Highly Skilled Migrant, 2025, pp. 2–4.

20. IND, Residence Permit for Work as a Highly Skilled Migrant, 2025, p. 3; IND, Business Newsletter, December 18, 2025.

21. IND Information Bulletin IB 2025/9, Application of the salary criterion for highly skilled migrants when the 30% rule has been used, effective March 20, 2025.

22. Tax Authority Knowledge Group KG:204:2024:2, Combined Residence and Work Permit, valid as of January 16, 2024.

23. Dutch Tax and Customs Administration, Payroll Tax Manual 2026, section 19.4.1.

24. Dutch Tax and Customs Administration, Payroll Tax Manual 2026, section 19.4.1.

25. IND, Business Newsletter, June 5, 2025; SOFI Expertise, Newsletter, June 30, 2025.

26. Dutch Tax and Customs Administration, Payroll Tax Manual 2026, section 19.4.1.

27. Dutch Tax and Customs Administration, Payroll Tax Manual 2026, Chapter 14 and Section 19.4.1.

28. Tax Authority Knowledge Group KG:204:2023:21, Correction in Case of Incorrect Application of the 30% Rule, published November 24, 2023, kennisgroepen.belastingdienst.nl/publicaties/kg204202321-correctie-bij-onjuiste-toepas-sing-30-regeling/. See also Salaris Vanmorgen, “Submitting a Correction Notice in Case of Incorrect Application of the 30% Rule: What You Need to Know,” November 27, 2023.

29. District Court of The Hague, April 28, 2025, ECLI:NL:RBDHA:2025:14937.

30. ABRvS, December 6, 2023, ECLI:NL:RVS:2023:4542. See also the Policy Rule on the Imposition of Fines under the Foreign Nationals Employment Act 2025.