Green and sustainable employee benefits are arrangements and benefits that companies offer to improve both the ecological footprint of their organization and the well-being of their employees. This includes initiatives aimed at reducing CO2 emissions, promoting environmentally friendly choices, and supporting broader long-term sustainability goals. Examples include bicycle leasing programs, electric vehicles, energy-saving measures such as solar panels, and even sustainable lunches or CO2 compensation programs.

Feasibility of green and sustainable employee benefits: various scenarios

When implementing green and sustainable employment conditions, it is important to consider the fiscal opportunities and limitations. Below are various scenarios, depending on the nature of the employment condition:

1. Work-related costs scheme (WKR)

The WKR provides companies with a tax-advantageous way to offer certain reimbursements and provisions tax-free. However, the leeway within the WKR is limited, especially for larger companies.

Imagine: a company has a wage sum of €50 million. The WKR provides 1.92% on the first €400,000 and 1.18% on the remaining amount, resulting in a total tax-free allowance of approximately €592,160. If 30% of this allowance is reserved for sustainable initiatives like solar panels and heat pumps, this amounts to €177,648. With an average investment of €8,000 per employee, only 22 employees can benefit from this. This scenario illustrates how limited the room is for such large investments within the WKR.

Read more about the Work-related costs scheme in this blog.

2. Travel reimbursement

Travel reimbursements up to €0.23 per kilometer are exempt from tax, making it attractive for companies to encourage employees to travel for work without affecting the WKR.

Imagine: a company wants to encourage its employees to choose sustainable modes of transport more often, such as public transport or carpooling. However, the WKR can present a challenge here, as reimbursing travel costs often limits the fiscal space.

Fortunately, there are ways to approach this smartly. Companies can make use of specific exemptions within the WKR. For example, they can provide a tax-free mileage allowance of up to €0.23 per kilometer for commuting. Additionally, the WKR also allows for tax-free provision or reimbursement of a public transport subscription, provided this subscription is used for business purposes such as commuting​ (Civra)​ (Tax Authorities).

These exemptions help companies maintain fiscal space within the WKR while simultaneously encouraging their employees to choose environmentally friendly options such as public transport or carpooling. For companies that prioritize sustainability, this is an effective way to promote green choices without additional costs or loss of tax benefits—a win-win for both the company and the planet. 

3. Lease bike and electric cars

Offering a lease bike and electric cars is often a fiscally attractive option as they fall outside the WKR. Employees can acquire a lease bike or electric car through their employer with tax benefits, without affecting the available space within the WKR.

Imagine: a company with 100 employees decides to offer everyone a lease bike. The great thing is that this does not impact the WKR space. In other words, this arrangement can easily be offered alongside other reimbursements without limiting the available fiscal room. The result? A smart and effective way to promote sustainability within the company, without fiscal obstacles in the way.

But that's not all. The same company can also offer employees an electric car through a salary sacrifice arrangement. This means the employee surrenders part of their salary in exchange for the use of the car. The advantage? The employee benefits from tax advantages, while the company does not exert pressure on the WKR. This benefits both sides: employees gain access to environmentally friendly transport options while the company remains financially flexible and tax-efficient.

In short, by cleverly utilizing these arrangements, a company can promote sustainability on multiple fronts without the fiscal restrictions of the WKR. A win-win for both the company and the employees!

4. Collective agreements with green energy providers

Companies can make collective agreements with energy providers to give employees discounts on green energy for home. This does not fall under the WKR, making it an attractive option to promote sustainability without fiscal disadvantages.

Imagine: A company enters into an agreement with a green energy supplier to offer its employees a discount on sustainable energy. This initiative is financially beneficial for the employees and does not impact the company's fiscal space. This way, companies can encourage sustainable choices without encountering tax-related constraints. This provides an effective way to promote environmentally friendly choices while retaining tax benefits—a win-win for both the company and the environment.

Practical examples of green and sustainable employment conditions

Despite the challenges, there are companies that offer innovative green and sustainable employment conditions:

• KPN: this company focuses mainly on mobility by offering bicycle leasing programs and reimbursements for electric vehicles that fall outside the WKR. This makes these benefits fiscally attractive and widely applicable for employees.

• Achmea: Achmea distinguishes itself by also offering a sustainability budget for investments in solar panels and heat pumps. Although this budget is a strong step towards sustainability, due to the high costs of these technologies, it remains reserved for a limited group of employees, highlighting the difficulty of widely implementing such initiatives.

• Rabobank: Rabobank offers sustainable mobility solutions by providing employees with free or reduced public transport subscriptions, which contributes to reducing CO2 emissions and traffic congestion.

The future of green employment conditions

Green and sustainable employment conditions are now a crucial part of modern employment contracts, with a strong emphasis on environmentally friendly choices and long-term impact. Mobility options such as bicycle leasing and electric vehicles offer a smart way to promote sustainability without fiscal problems. Additionally, companies can also benefit from collective agreements with green energy providers or advisory services for home sustainability. These initiatives help companies contribute to a sustainable future in various ways while staying within fiscal boundaries.

Finding the right balance between ambitious sustainability goals and the practical limitations of fiscal regulations remains a challenge. Fortunately, companies like Achmea, KPN, and Rabobank demonstrate that there are many creative and effective ways to integrate green employment conditions tailored to their specific needs and capabilities. This provides an inspiring example for other organizations looking to contribute to a more sustainable world without compromising on tax benefits.