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Work-related costs scheme: staff allowances

This information is provided by

Netherlands Enterprise Agency, RVO | Tax and Customs Administration, Belastingdienst

The work-related costs scheme (werkkostenregeling, WKR) enables you to spend part of your total taxable wage (the 'discretionary scope') on allowances, benefits in kind and provisions for your employees without tax liability.

How does the WKR scheme work?

If you make use of the work-related costs scheme, you do not have to pay wage tax on the amount within the so-called discretionary scope (vrije ruimte, in Dutch).

You must pay a final levy (eindheffing, in Dutch) over any amount above the discretionary scope. You do not have to pay national insurance contributions, employee insurance contributions, or employer's health care insurance contributions over this final levy amount. You also do not have to withhold the healthcare insurance contribution.

If you want to find out more on how to calculate the discretionary scope and final levy you can consult chapter 10 Eindheffing werkkostenregeling berekenen of the Dutch-language Payroll Taxes Handbook (pdf).

What is the discretionay scope?

Employers are allowed to reward their employees up to a maximum percentage of the company's entire salary costs (the collective salary of all employees combined) without tax liability under the work-related costs scheme (WKR). This is called the discretionary scope (vrije ruimte).

Specific exemptions and zero valuations

Aside from the WKR you can reimburse certain expenses, provide benefits in kind or make provisions for your employees without tax liability. You can do this through specific exemptions (gerichte vrijstellingen) and zero valuations (nihilwaarderingen). Specific exemptions are for example:

  • reimbursements for costs incurred by working from home
  • travel allowances
  • reimbursements for meals and overnight stays for courses or congresses
  • costs incurred to pay for a certificate of good conduct (VOG).

Zero valuations are applicable solely to wages in kind, for example:

  • work clothing
  • refreshments at work.

These reimbursements and allowances are not debited from your discretionary scope.

You can find more information on specific exemptions and zero valuations in chapter 22 Gerichte vrijstellingen, nihilwaarderingen en normbedragen of the Dutch-language Payroll Taxes Handbook (pdf).

This article is related to:

This information is provided by

Netherlands Enterprise Agency, RVO
Tax and Customs Administration, Belastingdienst
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