Benefit calculated
When granted, the employer is allowed to pay a maximum of 30% of the agreed compensation package to the employee as a tax free allowance for up to 8 years. This benefit can be calculated as follows:
Example:
Agreed compensation package: 100,000.
|
|
Annually |
Monthly |
| Without 30% ruling |
|
|
| Agreed package |
100,000 |
8,333 |
|
|
||
| Taxable wage |
100,000 |
8,333 |
| Less: wage tax |
45,000 - |
3,750 - |
| Net wage |
55,000 |
4,583 |
| Effective tax rate |
|
45% |
|
|
||
| With 30% ruling | ||
| Agreed package | 100,000 | 8,333 |
| Less: tax free allowance | 30,000 - | 2,500 - |
| Taxable wage | 70,000 | 5,833 |
| Less: wage tax | 29,400 - | 2,450 - |
| Net wage | 40,000 | 3,383 |
| Add back: tax free allowance | 30,000 + | 2,500 + |
| Net compensation | 70,000 | 5,883 |
| Effective tax rate | 29,4% | |
| Tax savings | ||
| With 30% ruling | 70,000 | 5,883 |
| Less: without 30% ruling | 55,000 - | 4,583 - |
| Benefit | 15,000 | 1,250 |
