Allowances and benefits in kind: Principles of The Work Expenses Regulations in the Netherlands
Benefits in kind in the Netherlands - principles of the Work Expenses Regulations (WKR)
All elements that you compensate (in money) or provide (in kind) to your employees are primarily classed as part of their wages. So both the normal taxed items such as salary, holiday allowance, 13th month, commissions and the benefit in kind of the company car. But also all net allowances such as expense claims, the Christmas hamper and the provision of office supplies if you have a permanent workplace for your employees in the Netherlands.
Fortunately, not everything you reimburse or provide to your employees is classed as taxable wages.
The WKR scheme discerns three types of allowances and benefits that can be provided with full or partial tax efficiency:
Allowances or benefits in kind that do not qualify as wages at all
- costs that are not related to the performance of the employment, for example a bunch of flowers for a sick employee
- intermediate costs (costs incurred by the employee on behalf of the employer, e.g. buying a promotional gift for a customer)
Allowances or benefits in kind that are considered wages, but remain untaxed
- the so-called “nil valuations” (e.g. coffee or tea in the workplace or the cost of a staff party in an internal office space)
- specific exemptions for various expenses, such as business travel expenses, temporary accommodation expenses and face masks
Allowances or benefits in kind that you may place in a so-called ‘Free Budget’
The Free Budget is a budget depending on the annual salary that you may spend on untaxed allowances or benefits in kind. If you exceed this Free Budget, you will be charged a final levy of 80% on the excess.
Need to know more about benefits in kind & the Work Expenses Regulation in the Netherlands?
If you have outsourced your Dutch payroll administration to Interfisc, you have access to an extensive information package about the Work Expenses Regulation (WKR), available in Dutch, French, English and German. This will help you to meet all the administrative and accounting requirements of the WKR scheme.
We also offer the opportunity to attend a training course on the Work Expenses Regulation & Benefits in Kind. For more information, visit our website: Training: Personnel costs & the work-related expenses scheme
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Since 1972, Interfisc has offered international HR & Payroll solutions in the Netherlands, Belgium, Germany, France, the United Kingdom, and Italy. We do this from our offices in the Netherlands and Belgium, and with an international team of around 45 committed and caring employees.
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