Pension accrual and the 30% rule (30 percent ruling) for expats
If certain conditions are met, expatriates may be eligible for the 30% rule. This arrangement means that there is a tax-free allowance which will be given up to 30% of wages. The tax free fee is for the extra cost of the temporary residence of the expat in the Netherlands. This allowance is tax not paid.
In principle you usually do not build up pension on the tax-free reimbursement of the 30% rulers. The pension benefits granted by your employer are based on your taxable salary; thus lower since the “top” is taken off as a tax free reimbursement.
The main rule is that the 30% reimbursement gives no accrual pension. However there are two exceptions:
1. Incoming employees accruing pension over the 30% rule with an initial accrual pension prior to July 1, 2002. The pension may be continued until the end date of the existing approval of the tax authorities with the relevant employer. This exception applies until July 1, 2012 (or earlier termination date of 30% Decision);
2. If exchange of remuneration components held under a cafeteria plan.
Due to the 70% level of pension salary the widows and orphans pensions are also 30% lower. This gap is easily compensated with a private life insurance.
If you think I might be able to help you with your business
Gerrit-Jan Doorneweerd, registered Dutch Employee Benefits & Insurances,
Amsterdam, +31 (0)20 6200825
Mobile, 0651 471 9 – six – five. (Also in the evening or weekend)
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