Relocation income tax allowance in the Netherlands

Table Of Content

• Relocation income tax allowance in the Netherlands: complete guide for 2026
• The €7,750 flat relocation allowance (verhuiskostenvergoeding)
• Domestic relocations: the tax-free reimbursement rules
• International relocations: ETK regime and the 2026 changes
• The 30% ruling for qualifying expats
  • 2026 eligibility requirements
  • Important: the tapering structure for post-2024 applicants
  • The 2027 reduction
  • How to apply
• Relocation allowance and the 30% ruling: how they interact
• Worked example: international relocation at €70,000 gross
• Practical checklist: what to do when relocating to the Netherlands
  • Before you arrive:
  • After you arrive:
• FAQs

Moving to or within the Netherlands for work comes with real costs. Packing, transport, temporary housing, agency fees, and the general disruption of rebuilding your life somewhere new all add up fast. The good news is that Dutch tax law includes several mechanisms that allow employers to cover some or all of these costs tax-free.

This guide explains every relocation tax benefit available in the Netherlands in 2026: the flat €7,750 verhuiskostenvergoeding, the rules for domestic versus international moves, the 30% ruling for qualifying expats, and the important ETK regime changes that took effect in January 2026.

The €7,750 flat relocation allowance (verhuiskostenvergoeding)

The most overlooked Dutch relocation benefit is also one of the most accessible. Most employees, both Dutch nationals and expats who relocate for work in the Netherlands, are eligible for a tax-free flat allowance of €7,750, paid on top of the actual transport costs for moving household goods.

This amount is intended to cover redecoration, furnishing, and the general costs of settling into a new home. Unlike the 30% ruling, you don’t need to be a highly skilled migrant or earn a minimum salary. You don’t need to provide receipts for it either; it’s a flat-rate payment.

Conditions to qualify:

• You must be employed by a Dutch organisation (or your own company, or via an Employer of Record)
• The relocation allowance must be written into your employment contract
• You must register as a resident in the Netherlands
• The allowance is paid at the start and end of your employment contract (some employers pay in monthly instalments instead)

Transport costs removal company invoices, van hire, petrol receipts, ferry costs are reimbursed in full on top of the €7,750. Keep all documentation.

If your employer doesn’t proactively offer this allowance, it’s worth raising directly. It costs the employer nothing if it replaces an equivalent portion of gross salary, and it increases your net take-home pay without changing the employer’s total budget.

Domestic relocations: the tax-free reimbursement rules

When relocating within the Netherlands for example, moving from Amsterdam to Eindhoven for a new job employers can reimburse relocation costs tax-free, but two conditions must both be met:

1. Distance: You must live more than 25 kilometres from your new workplace, and the move must reduce your commute distance by at least 60%.
2. Timing: The relocation must happen within two years of starting the new employment or internal transfer.

If both conditions are met, the employer can reimburse actual moving costs (removals, transport, temporary storage) tax-free. If neither condition is met, any relocation reimbursement is treated as taxable salary.

One important note: if you resign voluntarily or are dismissed for cause within 12 months of the move, most employers will require full repayment of the relocation allowance. This is standard in Dutch employment contracts: check yours carefully before accepting.

International relocations: ETK regime and the 2026 changes

For employees relocating from abroad, the Dutch tax system uses the ETK regime (extraterritoriale kostenregeling extraterritorial costs scheme) to define which relocation-related costs can be reimbursed tax-free.

Historically, the ETK regime covered a broad range of costs associated with working far from home. From January 1, 2026, however, two categories were removed from the list of tax-free reimbursable costs:

• Utility costs – additional expenses for gas, water, and electricity compared to the home country
• Private phone calls – the cost of non-business calls back to the home country

These can no longer be reimbursed tax-free under the ETK regime. If your employer still wants to cover these costs, they can do so from the discretionary margin (vrije ruimte) of the work-related costs scheme (werkkostenregeling) but only if that margin hasn’t already been used up.

What remains fully reimbursable tax-free under ETK:

• Actual moving and removal costs
• Temporary housing during the transition period
• Travel costs between the Netherlands and the home country
• International school fees for children
• Visa and immigration legal fees
• Language courses related to the relocation

The 30% ruling for qualifying expats

For highly skilled international workers, the 30% ruling (30%-regeling) is the most valuable relocation-adjacent tax benefit available in the Netherlands. It isn’t limited to relocation costs; it applies to 30% of your entire gross salary but it’s fundamentally designed to compensate for the extra costs of working in a foreign country, including relocation.

Under the 30% ruling, your employer can pay 30% of your gross salary as a tax-free allowance. Only the remaining 70% is subject to Box 1 income tax. On an €80,000 salary, that saves approximately €10,000–12,000 per year in income tax.

2026 eligibility requirements

• You must have been recruited from abroad or transferred within a multinational
• You must have lived more than 150 kilometres from the Dutch border (straight-line distance) for at least 16 of the 24 months before your first Dutch working day
• Your gross salary must be at least €48,013 in 2026 (or €36,497 for employees under 30 with a qualifying master’s degree)
• You must be employed by a Dutch entity
• Your role must require expertise that is scarce or unavailable in the Dutch labour market

Important: the tapering structure for post-2024 applicants

If your 30% ruling started on or after January 1, 2024, the benefit no longer applies at a flat 30% for five years. Instead, it tapers:

Period	Tax-free percentage
Months 1–20	30%
Months 21–40	20%
Months 41–60	10%

Employees who started the ruling before 2024 are grandfathered on the full flat 30% for their remaining period.

The 2027 reduction

The 30% rate drops to 27% from January 1, 2027, for all applicants whose ruling started in 2024 or later. Employees on the ruling before 2024 retain their existing entitlement. If you’re planning to negotiate your package for a 2027 start, factor this in the difference on a €100,000 salary is roughly €4,000–5,000 per year.

How to apply

Your employer applies to the Belastingdienst on your behalf you cannot apply alone. Submit within four months of your start date. If applied within this window, the ruling is backdated to your start date. After four months, it applies only from the application date forward, meaning you permanently lose the backdated benefit.

Processing typically takes 2–4 months. Use our Dutch tax calculator to estimate your take-home salary with and without the 30% ruling applied.

Relocation allowance and the 30% ruling: how they interact

A question that comes up often: can you receive both the €7,750 flat relocation allowance and the 30% ruling?

Yes but with an important condition. If the 30% ruling is active, it is intended to cover all extraterritorial costs. The actual ETK costs (moving, housing, school fees, etc.) cannot be reimbursed tax-free separately in addition to the 30% ruling, unless the actual costs are provably higher than the 30% allowance.

In practice, most expats on the 30% ruling are better off using the ruling and not claiming separate ETK reimbursements, because the ruling’s value on a full salary typically exceeds what actual cost reimbursements would provide. However, if your employer offers both, have a tax advisor check whether claiming actual costs exceeds the 30% benefit for your specific situation.

The €7,750 flat domestic relocation allowance sits in a different category and is generally compatible with the 30% ruling, since it covers domestic settlement costs rather than extraterritorial costs. Confirm the specifics with your employer’s payroll team.

Worked example: international relocation at €70,000 gross

Profile: Software engineer, recruited from Germany, starting at a Dutch company at €70,000 gross. Qualifies for the 30% ruling from day one.

	Without 30% ruling	With 30% ruling
Gross salary	€70,000	€70,000
Taxable portion	€70,000	€49,000 (70%)
Estimated Box 1 tax	~€22,500	~€13,800
Estimated tax credits	~€3,500	~€3,500
Estimated net salary	~€51,000	~€59,700
Difference	–	+€8,700/year

Plus: the employer reimburses actual moving costs from Germany tax-free under ETK, and pays the €7,750 verhuiskostenvergoeding as a flat settlement allowance.

Total first-year financial benefit of the full relocation package: roughly €16,000–20,000 net above what a domestic hire in the same role would receive.

Practical checklist: what to do when relocating to the Netherlands

Before you arrive:

• Confirm the 30% ruling application will be submitted by your employer within 4 months of your start date
• Check whether the €7,750 relocation allowance is in your contract if not, request it
• Gather all moving cost documentation: removal company quotes, transport invoices, storage receipts
• If coming from within 150km of the Dutch border, check distance eligibility carefully this is the most common reason for 30% ruling rejections

After you arrive:

• Register with the municipality (gemeente) as soon as possible required for the relocation allowance and for Dutch residency status
• Keep all receipts for moving-related costs (even if on the 30% ruling) for the first year
• Ask your employer’s HR or payroll team which ETK costs they’re reimbursing and confirm the 2026 exclusions (utilities, private phone calls) have been removed from your package if applicable
• Use your DigiD login at mijn.belastingdienst.nl to monitor your tax position and check whether a provisional assessment (voorlopige aanslag) has been issued

FAQ’s

Is relocation allowance taxable in the Netherlands?

It depends on the type. The €7,750 flat verhuiskostenvergoeding is tax-free when written into your employment contract and conditions are met. Actual moving costs (transport, removal, temporary housing) can also be reimbursed tax-free under ETK rules. Any allowance paid as a lump sum above these thresholds without qualifying conditions is treated as taxable salary under Box 1.

What is the €7,750 relocation allowance in the Netherlands?

The verhuiskostenvergoeding is a tax-free flat allowance of €7,750 available to most employees relocating for work in the Netherlands including Dutch nationals and expats. It is intended to cover home decoration and setup costs and does not require receipts. It is paid on top of actual transport costs and must be specified in the employment contract.

Can I claim both the 30% ruling and a relocation allowance?

The 30% ruling and the €7,750 flat domestic relocation allowance are generally compatible. However, the 30% ruling and separately claimed ETK reimbursements (actual extraterritorial costs like housing or school fees) cannot normally be combined; the ruling is designed to replace those reimbursements. If your actual costs exceed what the 30% ruling provides, you can claim the higher actual costs instead.

What ETK costs were removed from tax-free reimbursement in 2026?

From January 1, 2026, two categories are no longer eligible for tax-free reimbursement under the ETK regime: utility costs (gas, water, electricity above home-country levels) and the cost of private phone calls to the home country. These changes were introduced to limit the regime to costs directly related to the employment relationship. Employers can still cover these costs through the werkkostenregeling’s vrije ruimte if available.

What happens to the 30% ruling in 2027?

From January 1, 2027, the tax-free percentage drops from 30% to 27% for employees whose ruling started in 2024 or later. The minimum salary threshold will also increase. Employees who began the ruling before 2024 keep the original 30% rate for their full remaining period. If you’re negotiating a 2027 start, factor in that the ruling will provide slightly less value than in 2026.