The benefit of the 30% ruling is up to 30%, but may be less. We can explain this as follows.
The taxable salary (payroll taxes) for the year 2024 should exceed €46,107 for employees over 30 years old. This corresponds to 70% of total income if the 30% ruling is fully applied (30%). In other words, if the employee earned a gross salary of €65,868 and a 30% allowance of €19,760, the taxable base would be exactly more than €46,107. The salary standard is then met.
Is the total gross pay package (including bonus, vacation pay, 13th month, etc.) less than €65,868? Then the benefit of the 30% ruling is also lower than 30%. After all, otherwise the salary standard is no longer met and there is no right (anymore) to apply the 30% ruling.
An example for clarification:
– Gross monthly salary: €4,000 (including vacation pay, no other wage components otherwise)
– Annual salary: €48,000 (12 * €4,000)
– Salary criterion: €46,107 (taxed salary must be more than the standard)
– Maximum 30% allowance: €1,893 (€48,000 – €46,107)
– Actual 30% ruling rate: rounded 3.94% (€1,893 / €48,000)
In our example, if you were to deduct the full 30% allowance from taxable wages of €48,000, that would result in a taxable income of €33,600. Since this would bring taxable wages below the minimum limit, this is not allowed. For this reason, a calculation of a pro rata benefit is required. The payroll administrator should make these calculations/process them into the payroll.
If help is needed with such calculations or you would like to have your payroll checked to see if the 30% ruling has been processed correctly, feel free to contact us for our 30% payroll scan.
