Benefits in kind & the Work Expenses Regulation in the Netherlands – what will change as of 2024?
Annually, some important changes take effect as to what employers may and may not reimburse or provide to their employees in terms of tax efficiency. In the Netherlands, these rather strict tax rules are set out in the Work Expenses Regulations (Werkkostenregeling or WKR) and relate to reimbursements (in cash) or benefits (in kind).
As of 1 January 2024, some important changes were implemented in the WKR scheme:
- The so-called Free Budget is set at 1,92% over a taxable annual salary of € 400,000
This untaxed budget amounted to 1.7% in 2022 over a taxable annual salary of €400,000 and 1.18% over the excess of all employees subject to income tax in the Netherlands. In 2023, the percentage of 1.7% was temporarily increased to 3% to give employers the opportunity to compensate their employees for the increased energy costs:
- 3% over a taxable annual salary of € 400,000 and 1.18% over the excess of all employees subject to income tax in the Netherlands.
- Employers may provide a tax-free reimbursement for home office expenses
Since 1 January 2022, you may grant the employee an untaxed allowance for home office expenses. A specific exemption of € 2.35 per day worked from home applies as from 2024 (in 2023 this amount was € 2,15). This allowance may not coincide with the tax-free travel allowance. However, if you work from home, go to a customer and after a customer visit you go back home to work, then you may reimburse the € 2.15 for that day together with the € 0.21 per km driven to the customer and back home. As of 2023, the maximum amount of tax-free travel allowance has been increased from € 0.19 to € 0.21 and it may go up to € 0.23 in 2024.
Do you want to know more about benefits in kind in the Netherlands?
If you would like to know more about the principles of the Work Expenses Regulations, please read this brief summary.
Principles of benefits in kind & the Work Expenses Regulations
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