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Benefits in kind & the Work Expenses Regulation in the Netherlands – what will change as of 2025?

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). 

Every year, the size of the budget that employers are allowed to use for untaxed allowances is determined. This budget is also known as the free budget and is a percentage of the taxable annual salary of all employees subject to wage tax in the Netherlands.

As of 1 January 2025, the following has changed:

  • Tax Free Budget
    The tax free budget is set at:
    • 2% over a taxable annual salary of € 400,000
    • 1.18% over the excess
  • Home office expenses
    You may grant your employee an untaxed allowance for home office expenses. A specific exemption of € 2.40 per day worked from home applies as from 2025 (in 2024 this amount was € 2,35). This allowance may not coincide with the tax-free travel allowance.
    However, if the employee works from home, goes to a customer and after a customer visit  returns home, then you may reimburse the € 2.40 for that day together with the € 0.23 per kilometer driven to the customer and back home. In 2024, the maximum amount of tax-free travel allowance was increased from € 0.21 to € 0.23; in 2025 the amount of € 0.23 still applies.

Do you want to know more about benefits in kind and work expenses 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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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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