Dutch payroll

The salary of the employee must be subject to Dutch wage tax withholding. The Dutch employer usually is considered a withholding agent for Dutch wage tax purposes.

The employer should only process the 30% ruling in the payroll once the 30% ruling is granted by the tax department. The Dutch tax authorities may decide on the request wihin 2 months after filing. Therefore the 30% ruling can in principle be applied with retroactive effect.

If the 30% ruling is granted in a new tax year and the salary administration of the previous tax year has been closed, the 30% tax free allowance can be paid out in the following tax year. Alternatively, the 30%-benefit of the first year can be claimed in the income tax return of the employee.