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 scheme work?

You do not have to pay wage tax on the amount within the discretionary scope (vrije ruimte, in Dutch). Nor do you have to pay or withhold health insurance premiums, and income-dependent employer's health care insurance contributions over this amount. You do have to pay a final levy (eindheffing, in Dutch) of 80% over any amount you pay or pay in kind above the discretionary scope.

Specific exemptions

You can reimburse certain expenses, provide benefits in kind or make provisions for your employees without tax liability. This includes travel costs, telephones or computers. You can do this through specific exemptions (gerichte vrijstellingen) and zero valuations (nihilwaarderingen). This is not debited from your discretionary scope.

Corona crisis: discretionary scope increased

The discretionary scope (vrije ruimte) over the first €400,000 of the wage costs will be increased from 1.7% to 3% for 2020. This way, if you can afford it, you can offer your employees some extra support during this corona crisis, for instance a gift card. Read more on the increase in the discretionary scope (Verruiming vrije ruimte, in Dutch).

Discretionary scope

Employers are allowed to reward their employees up to a maximum percentage of the company's entire salary costs (i.e. the collective salary of all employees combined) without tax liability under the work-related costs scheme (WKR). This is called the discretionary scope. From 1 January 2020, the discretionary scope is:

  • 1.7% over the first €400,000 of the wage costs.
  • 1.2% for the amount over €400,000 (this percentage is unchanged).

For example, in a company where the salary costs are €400,000, the tax allowance is €6,800.


If you reimburse or provide more than the amount covered by the discretionary scope, then you pay tax over this amount. Settlement must take place in the second tax return period of the next calendar year at the latest.

Certificate of good conduct

The costs incurred to pay for a certificate of good conduct (VOG) have been added to the list of specific exemptions. 'Specific exemptions' are reimbursements which are not deducted from the discretionary scope. This means the costs can be refunded tax-free with no impact on the discretionary scope.

Discount on home brands

You can give your staff a 20% discount on products made by your company up to a maximum of €500 per year per employee. The Tax and Customs Administration will determine how much your company’s home brands are worth by using the standard sales and shop value including VAT.

This information is provided by

Netherlands Enterprise Agency, RVO
Tax and Customs Administration, Belastingdienst