What is the work related costs scheme (wkr)?


The work-related costs scheme is a tax scheme that has been mandatory for all employers since 2015. Under the work-related costs scheme, you are allowed to give untaxed allowances to your employees. Think sports subscriptions or Christmas hampers. What are the snags and eyes? And what are the opportunities of the work-related costs scheme for you as an employer? 

What is the work related costs scheme (wkr)?

Within this scheme, it is possible for employers to provide untaxed allowances to employees. If the total of untaxed allowances provided to employees remain within the so-called free space, no tax (final levy) has to be paid on this, by you as an employer.

The free space within the work-related costs scheme is built up as follows for the year 2024: Up to a wage bill of €400,000, 1,92% of the wage bill is the free space, when the wage bill is above €400,000 you build up 1,18% free space on the excess.

Should the untaxed allowances exceed the accrued free space, you as an employer will pay 80% final tax levy on the excess. This final levy must be declared to the tax authorities no later than in the 2nd period of the following calendar year.

Targeted exemptions

The aim of the working expenses scheme was to simplify the existing rules. However, there is one more exception: the targeted exemptions. These include business travel costs, temporary accommodation costs and costs of meals with a more than incidental business character.

Conditions for targeted exemptions

Conditions for targeted As an employer, you must have designated the allowance or provision in advance. Without a designation, no exemption applies. Designation is subject to a free theory of evidence, and you must make it plausible that you have designated.

What are specific exemptions?

  • Certificate of good conduct (VOG)
  • Travel allowance (up to €0.23 per km)
  • Public transport season tickets
  • Subsistence costs for temporary work elsewhere
  • Business dinners with a client
  • Cost of courses or conferences
  • Costs of outplacement
  • Meals due to overtime/shopping night/service trips
  • Meals in canteens, please note that standard amounts apply here
  • Study costs
  • Products from own business (maximum 20% discount of the value in shop, with a maximum of € 500 per calendar year)
  • Study costs and professional literature
  • Tools, computers and mobile communication devices. (note the necessity criterion applies here)

What is necessity criterion?

When a reimbursement or provision meets the necessity criterion, it is not taxable wages. Something is necessary if it is reasonably necessary for the proper performance of the employment relationship. Without these tools, computer and/or mobile communication devices, the employee is unable to perform his duties properly. This makes the criterion an open standard that can be applied to current but also future situations. It should first be based on the opinion of the employer, his involvement and responsibility should be evident from the fact that he bears the costs of the provision/reimbursement and does not recover them from the employee. 

Nil valuations

We are talking about a category of benefits in kind that fall within the free space, but are hereby valued at NIHIL or a low amount. These are workplace-related facilities, which can nevertheless be provided wholly or partly untaxed.

Nil valuations only apply to benefits in kind and therefore not to cash benefits in kind.

What nil valuations are there?

  • Health and safety facilities
  • Possibility of fitness in the workplace
  • Workplace refreshments that do not form part of a meal
  • Furnishing of the workplace, other than the workplace in the employee’s home
  • Public transport card and benefit hours card, which is also used for business purposes
  • Occupational health and safety
  • Occupational health and safety provisions outside the workplace (such as medical examination)
  • Work clothes that are demonstrably left at the workplace or are only suitable for wearing while working (overalls/uniforms)
  • Workwear with company logo of at least 70 square centimetres
  • Tools that stay at work
  • Mobile phone or smartphone with a business use of at least 10%
  • Computers, laptops, provided business use of at least 90%

Intermediate costs

These are expenses that the employee actually advances for the employer. These are untaxed. Intermediate costs are, for example, entertainment costs and business gifts in the service of customers / external relations and costs of the company car (parking fees, car washing).

Which costs do fall within the free space?

  • Christmas hampers and small other gifts (e.g. chocolate letter)
  • Parking – ferry and toll fees with own car
  • Company fitness (not at the workplace)
  • Work space at the employee’s home
  • Interest benefit of an employee loan
  • Costs for travelling above the standard amounts, e.g. kilometer allowance above €0.23 per kilometer
  • Staff parties and staff travel
  • Staff association contribution

Would you like to know more about the working costs scheme and how to make the best use of it as an employer? Or do you have other questions about the WKR or payroll? Then contact our specialists.