As an employer with employees in the Netherlands, you are obliged to apply the work-related expenses scheme (Dutch WKR). This WKR determines which rules apply to reimbursements and benefits you grant your employees.

Under the WKR, all elements you reimburse (in cash), provide (benefit in kind) or make available to your employees are primarily regarded as ‘wage’. This therefore includes not only employee benefits like salary, holiday allowance, 13th month payment, commission and the benefits in kind for the company car, but also all net reimbursements such as expense claims, the Christmas gift, a staff outing, and the provision of office supplies if you have a fixed place of work for your staff in the Netherlands.

The tax administration requires you to properly classify all your reimbursements and benefits into different cost categories in your financial administration in order to check whether you have applied the rules correctly. If you are unable to account for all your personnel costs, you run the risk of additional tax assessments and fines.

To be able to comply with the rules, it is important to ensure that both your personnel administration and your financial administration set up correctly and that the internal HR  & Finance processes have been properly aligned.