The minimum salary requirement is one of the four requirements you need to meet to qualify for the 30% ruling. What is the minimum salary.
30% ruling – minimum salary requirement
The minimum salary requirement is EUR 37.296. This is the 70% part of the salary. So the gross salary needs to be at least EUR 53.280.
The exception to this rule is that when you are younger than 30 years old and you hold a master degree, then your salary can be EUR 28.350 instead. Again this is the 70% part of the salary. The gross salary needs to be at least EUR 40.500.
The ultimate exception to the rule is when you work for a Dutch university, then no minimum salary is required. If that would be different, with the budgets of the universities no employee would qualify anymore, but we do need the researchers.
When do you need to meet the minimum income requirement?
There are more answers to this one question. The most important answer is on the moment you were attracted from abroad by the Dutch employer, you should earn the minimum required salary. In other words, if you get a raise later that makes you meet, then this raise is too late.
The multiple answer to the question is in the minimum income constantly being monitored. You need to keep earning this salary, otherwise you still lose the ruling the moment you no longer meet the minimum income requirement. This is checked in the income tax return and wage tax returns.
Example minimum income requirement:
- You have been attracted by a Dutch employer from abroad that offers you a EUR 60.000 gross salary.
- You meet all the requirements, so the ruling is applied for and granted.
But nearly immediately you make less hours than the hours agreed in the employment agreement. Hence your salary drops in line with the lower amount of hours and suddenly you no longer meet the minimum income requirement. From that moment you have lost the ruling forever.
Example 2 minimum income requirement:
- You were attracted by a Dutch employer when you are 28 years old.
- You hold a master degree, hence the lower EUR 40.500 income requirement was applicable to you.
- You were offered a EUR 50.000 salary, hence the 30% ruling was issued to you.
Then you turned 30 years old without a significant salary increase and you are under the EUR 53.280. That implies you have lost the ruling forever.
No more ruling – how is that communicated?
That is not communicated. It is the obligation of the employer to apply the correct rules to the salary. If that implies the 30% ruling needs to be examined if still applicable, then this is part of running the payroll.
No more ruling but ruling is still applied
If the employee no longer meets the requirements. Either the employee’s salary was too low or the employee took a garden leave exceeding 3 months, then the ruling no longer applies. If the employer does not acknowledge this and continues processing a salary with applying the ruling, the employer has a problem.
The problem is that not enough tax was calculated, hence the employer is to pay the difference plus a penalty of at least 25%. Then the employer needs to collect from the employee the too much salary paid. Any employer that ever tried to collect too much salary with the employee knows that the money is no longer available, so to say. Hence the employer waives that amount. But waiving the amount is in fact salary as well, that needs to be grossed up, plus social premiums and if not done correctly, with a penalty of at least 25%.
We do come across these situations where the employee holds in their hand the 30% ruling statement issued by the tax office, but less hours were worked, hence the ruling is void. That is often difficult to digest by the employee.
Or the employer that finds out too late that the employee was not entitled anymore or the ruling lapsed. The question asked is often, what is the chance on an audit. The answer is: really small. But that is not the correct question to ask. The question is: will the tax office find out in the coming 12 years. The answer is then: probably. Do you then have issues? Indeed you have.
Now the period of the 30% ruling is shortened to max 5 years, you can expect that the tax office will make this a pin point investigation for next year. Plus due to all the news about this change, no employer can shield a mistake with the words: we did not know.