The work-related costs scheme (WKR) for employers. How does it work exactly?

In 2015, the work-related costs scheme was established in the Netherlands. From that moment, no less than 29 regulations were replaced in one go by one scheme. Super handy, of course, but the WKR often raises questions. Questions that we will answer in this blog.

So, how does the work-related costs scheme actually work? And how can the Alleo app help create maximum value? In this blog, we explain how it works.

What is the work-related costs scheme exactly?

First, let's break down the term. The work-related costs scheme is a regulation for the costs you, as an employer, reimburse for your employees. The scheme means that not all these costs are taxed. The government has already determined for you which costs those are.

The tax-free 'space' within which you can declare certain costs tax-free is also referred to as the free space. The size of that free space, and therefore the tax-free budget, depends on the total salary of the company. From January 2023, you may spend a maximum of 3% of the taxable salary up to €400,000 plus 1.18% of the remaining salary on tax-free reimbursements.

For the reimbursements above that, you pay a final tax of 80%. Not all reimbursements and provisions will reduce the free space. There are, in fact, other options. When you reimburse something for your employee, there are various options:

- A targeted exemption;

- Nil valuation;

- Intermediate costs;

Free space work-related costs scheme

On Prinsjesdag 2024, the cabinet announced that it wanted to increase the free space over the first €400,000 of the taxable salary by 0.08 percentage point, raising the free space from 1.92% to 2%. We consider this good news, of course, because it provides employers with a lot more tax-free budget for their employees.

Which costs fall under the free space?

As an employer, you are fairly free to implement the WKR as you wish. There are naturally well-known skiing trips and work outings, but there are many more types of reimbursements that fall under the free space, including things that employees benefit from personally:

- Sports subscriptions at a gym or yoga studio;

- Coaching focusing on personal development and well-being;

- Christmas packages;

- Access to co-working spaces;

- Childcare.

You can allocate the free space in the work-related costs scheme, to a certain extent, for costs, reimbursements, or gifts for your employees. What Alleo helps you with is to implement the WKR flexibly. By converting the WKR into a budget that employees can use on our platform, they can choose for themselves how to spend it. This offers tax advantages for employers, as it allows for tax-free reimbursements to be granted in a flexible manner.

Nil valuation

In addition to the WKR, there are a number of nil valuations for certain costs for employees. These costs are considered 'nil' and do not count towards the WKR. The tax office has established that this nil valuation only applies to provisions that are also used at the workplace. Any form of salary is excluded from this scheme. The nil valuation includes, among other things:

- Provisions that employees use at the workplace;

- Consumptions in the workplace that are not part of a meal, such as tea, coffee, or soup;

- Work clothing;

- OV subscriptions for commuting;

- Provisions for the home office.

What you have not specifically exempted, or has been valued as nil, must be regarded as individual wages or final taxation wages, meaning it does fall within the free space.

Which costs do not belong to the free space?

In addition to the costs that fall within the free space of the WKR, there are also costs that fall outside of it and cannot be valued as nil either. These costs include:

- Intermediate costs: costs that an employee incurs for their employer. Such as a business lunch that is prepaid. This can be reimbursed tax-free because it is not considered salary. This will not reduce the free space.

- Targeted exemptions: there are targeted exemptions that can be reimbursed tax-free but do not affect your free space. These include travel costs up to €0.23 per kilometer, OV subscriptions, meals during overtime, relocation costs due to work, and applying for the VOG.

- A lease bike through the bike plan. The lease bike is now outside the WKR because employees can finance a lease bike from their gross salary.

Using the WKR flexibly and effectively via Alleo

As we mentioned earlier, there are also other ways to use the WKR than clichés. Through Alleo, you can use the WKR as a flexible budget that employees can spend on our platform, on benefits they truly want. This allows you to provide your employees exactly what they need. This flexible and personalized compensation fosters genuine engagement.

What is Alleo exactly?

Flexible benefits: Let your employees create a personal benefits package from a wide range of benefits. Through our marketplace, they choose benefits that match their needs.

Benefits for everyone: Provide your employees with unlimited access to training and essential support for their mental health and financial well-being.

Culture and rewards: Set bonuses yourself that align with your company’s objectives. Is someone having a birthday or is there another highlight to celebrate? Let employees choose their own gift.

Perks: Give your employees cost-neutral access to various collective discounts and perks.

Flexible salary: Provide flexible access to existing salary components, such as holiday pay and bonuses, and increase the purchasing power of your employees.

Flexible pension: Whether they are saving for their pension or planning a renovation: give your employees the ability to manage their financial affairs flexibly. This helps them keep their financial well-being on track.

All compensation – including current benefits – is integrated into a mobile app styled to your company. This way, employees can find everything in one central place. In addition, Alleo handles all administrative matters, including the onboarding and offboarding of your employees.