Aug 15, 2024
Are you looking for fresh ideas to reward, motivate, and keep your team healthy, without losing your entire budget to the Work-Related Costs Scheme (WKR)? Good news: there are creative and fiscally smart ways to get more out of your WKR budget; we have compiled 11 tips for you. From a daily healthy lunch that doesn’t affect your WKR, to on-site company fitness without tax headaches. We also delve into the benefits of a company bicycle lease and the flexible buying or selling of vacation days. Plus, discover how you can maximize your budget with events through a staff association and a smart mobility budget. This guide shows you how to offer all these benefits without exceeding the WKR limits.
In this article, you will read 11 tips with minimal impact on your free WKR space:
1. Employee lunch contribution
2. Company party through staff association/employee contribution
3. Sporty team-building activities
4. Exempt work clothing/equipment
5. Collective health insurance
6. The bicycle lease scheme
7. Buying/selling vacation days from gross salary
8. Mobility budget
9. Exchanging wage components
10. Learning & Development budget
11. The small gifts scheme
First, let’s go back: how do you actually calculate the WKR?
To calculate the Work-Related Costs Scheme (WKR), you add up the total taxable wage sum of all employees. For 2025, you then apply 2% as free space over the first €400,000 of the total taxable wage sum. For the amount above €400,000, a free space of 1.18% applies. Within this free space, you, as an employer, can give reimbursements and provisions tax-free to employees. If the total reimbursements and provisions exceed the free space, you pay 80% final tax on the excess.
1. Lunch reimbursement
Encourage team spirit and healthy habits during lunch!
If your company provides lunch or partially pays for lunches supplied by a catering company, the tax authority sees the value of those lunches as extra income for your employees. This means that for each lunch, per employee, you must add €3.90 (standard amount 2024) to the income. This extra amount is considered salary, so you must pay payroll tax and social premiums on it. This can significantly increase the cost of lunch!
How do you handle this cleverly as an employer?
By having employees contribute to their meal, you can efficiently save space within the free space of the WKR. This approach ensures that the costs of the lunches do not rest solely on you as the employer. When an employee contributes to the meal cost, you can consider the remaining amount as salary. You also have the option to designate this salary as final tax salary in the free space, keeping the WKR space free for other benefits.
How do you calculate these costs?
Keep track of participants: Accurately record who uses the lunch and deduct €3.90 per lunch from the salary. An administrative challenge, but necessary for accuracy.
Use the tax authority's formula: this simplifies the calculation by not having to record every absence individually. This formula assumes 214 working days: this is an estimate of the number of working days in a year, after deducting weekends, national holidays, and average vacation days.
Tax authority formula:
((214 * 3.90 * (the average number of days per week that someone works / 5 ) ) / 12 ) (13 for people who are paid every 4 weeks).
Example: An employee working full time: ( 214 x 3.90 x 5 / 5 ) / 12 = € 69.55.
2. Company party through Staff Association / employee contribution
Perhaps you recognize this: a large part of your free budget within the WKR goes to one company party or outing, such as a ski trip or weekend away. These events are of course great for the atmosphere and engagement of your team, but there is a clever way to get more out of your budget. How? By organizing the party through a staff association and asking for a contribution from the employees.
Plus, as an employer, you can even double what employees contribute, and do so in a fiscally favorable way. This trick ensures that you retain more money for other fun team activities without exceeding your WKR limit. Thus, your party remains just as amazing, with a top DJ and an unforgettable award show, and you can use the WKR for other nice extras for your team, such as health programs or sports subscriptions.
Conditions for staff association
To successfully keep the contribution through the staff association outside the WKR, it is important to meet certain conditions:
The staff association must be independent;
The association may not make any payments or provisions to employees;
The employer may not contribute more to the fund of the staff association than the employees;
At least three-quarters of the employees from the same location must participate;
Something is organized on an incidental basis that is not considered financial compensation; for example, a company party or team-building activity.
4 company events that do not affect the WKR
A company outing focused on collaboration or communication within regular working hours falls outside the WKR;
Business meetings such as meetings or conferences are not considered rewards and fall outside the WKR;
Organizing a day out with both regular and new clients, aimed at inspiration and networking, also falls outside the WKR;
Activities that take place entirely on the work location and are aimed at the team, without imposing a direct financial burden, are not counted within the WKR.
3. Sporty team-building activities
Fit employees are happy employees. By offering fitness facilities on location, you invest in the well-being of your team without touching your WKR budget. Win-win! How? Consider setting up a specific space where team members can train together under the guidance of a qualified fitness instructor. For this provision, a nil valuation applies under the WKR, meaning it does not affect the available WKR space.
Another possibility is to organize a sports event such as a running competition or padel tournament that employees participate in. These activities may fall outside the WKR, depending on the setup, if they contribute to team building.
Events organized by the employer, such as a running competition or another sports event, may be exempt from the Work-Related Costs Scheme (WKR) under certain conditions. This is especially the case when they can be viewed as part of a health policy or team-building activities. Here are some examples of situations in which such events could potentially fall outside the WKR:
Team-building activities: If the sports event is primarily aimed at promoting team spirit and collaboration within the company, and less on the athletic aspect itself, it can be regarded as a team-building activity. Team-building activities that are essential for the functioning of the team and improving the work atmosphere may, depending on the circumstances, fall outside the WKR.
Health policy: Events that are clearly part of a health policy set up by the employer may also fall outside the WKR. This concerns activities aimed at improving or maintaining the health of employees, such as workshops on healthy living, sports days, or providing facilities aimed at preventing work-related health problems.
Open and voluntary participation: Events that all employees can participate in on a voluntary basis, without additional costs or implications for those who choose not to participate, are more likely to fall outside the WKR. This is because they are less seen as a direct benefit or reward for specific employees.
Part of an educational or training program: Sporting events organized as part of an educational or professional development program may be considered necessary for the performance of the job under certain circumstances. This could mean they are not seen as salary and therefore could fall outside the WKR.
Events outside working hours and location: The location and timing of the event can also influence this. Events that take place entirely outside working hours and at external locations without participation being mandatory might fall outside the WKR under certain circumstances.
It is important to emphasize that the tax treatment of such events depends on the specific details and how they fit within the rules of the WKR. Therefore, it is advisable to seek advice from a tax consultant or directly from the tax authority for specific situations.
4. Exempt work clothing/equipment
Do you like to put your team in the spotlight with stylish company clothing?
Good news: providing work clothing that meets specific requirements - think of clothing with the company logo, worn only during working hours - falls outside the WKR. This means you can equip your employees with everything they need to look their professional best without worrying about tax additions. Moreover, eye tests and (screen) glasses from the employer are also not deducted from the free space. This provides a modern solution and meets the obligation to safeguard the eye health of your team, all in a tax-friendly manner.
5. Collective health insurance
Do you want to keep your team not only vital and engaged but also financially supported? Introducing a collective health insurance is a powerful signal to your team that you, as an employer, value health and well-being highly. This benefit falls outside the WKR, as it is seen as a contribution to the health of your employees, which benefits overall well-being and is not considered taxable income. Just be careful: stick to the legal limit of 5% discount on health insurance, as this ensures a tax-friendly way to promote a healthier and happier team.
6. The bicycle lease scheme
Promote the typical Dutch cycling feeling and encourage a healthier and more sustainable way of traveling among your employees by offering a company bicycle. With a bicycle lease scheme, your employees benefit from an attractive tax regulation, with only 7% addition on the value of the bike. This results in significant savings for employees, while it can often be fiscally advantageous for you as an employer if you, for example, provide a contribution of €20 per month per employee. Optionally, you can take on part or all of the monthly lease costs.
This contribution compensates for the savings on social charges that you achieve. This scheme thus not only supports a healthier lifestyle and sustainable mobility, but it is also a clever way to contribute to the well-being of your team without extra costs.
7. Buying/selling vacation days from gross salary
Don't we all find free time and a good work-life balance very important? Give your team the freedom to choose between more vacation or more salary with a flexible leave scheme, and respond to the diverse wishes and life stages of your employees. Buying vacation days can be done outside the WKR from the employee's gross salary. This allows employees to purchase extra days off tax-beneficially or receive a higher salary by selling days. This arrangement falls outside the WKR and offers a win-win situation for both the employer and the employee. Curious how this works exactly? Read all about it in this white paper on the Modern Cafeteria Model.
8. Mobility budget
With hybrid working as the norm, the need for mobility has changed.
A mobility budget is a flexible and modern solution for travel cost reimbursement. You can give your team a fixed amount that they can spend at their preference on transportation means, such as public transport, or even shared mobility. This budget can be optimized so that it not only contributes to sustainable mobility but is also fiscally attractive. The mobility budget can be arranged in such a way that, depending on the implementation, it falls outside the WKR or is optimally used within the free space.
Curious how this works exactly? Read all about it in the WKR Guide 2025.
9. Exchanging wage components
To exchange wage components outside the WKR, you can use specific reimbursements and provisions that qualify as targeted exemptions or have a nil rate. The most common wage components are vacation pay, above-statutory vacation days, and a bonus or 13th month. Examples include travel reimbursements (€0.23 per kilometer for commuting), reimbursements for a bicycle for commuting, and untaxed reimbursements for working from home. These options do not fall under the free space of the WKR because they are exempted by the tax authority. By exchanging the gross wage components for these specifically exempt reimbursements, employees can benefit from a fiscal advantage without this costing the employer's free space.
10. Learning & Development budget
Allocating a budget for the learning and development of your employees is a no-brainer to stimulate professional growth. An added bonus is that it can also be fiscally friendly. This is because these investments, provided they meet the right criteria, may qualify for targeted exemptions within the WKR. Such an exemption is possible when the training, course, or education directly contributes to the required knowledge and skills for the job - or helps the employee remain employed. The costs must be directly related to the education, such as registration fees, materials for learning, and travel expenses. By making smart use of this regulation, you not only support the professional development of your team, but you also do this in a cost-efficient manner.
11. The small gifts scheme
Do you want to give an employee a nice gesture, such as a bouquet for a 10-year anniversary or a baby gift for a new parent? This can be done tax-free with the small gifts scheme. Here are the rules:
The gift must be a personal gesture for special occasions such as an anniversary, wedding, or birth.
You may not give money or gift vouchers; the gift must be a physical product.
The value of the gift, including VAT and any shipping costs, may not exceed €25.
With this scheme, you can as an employer do something extra for your employees in a fun way without having to pay tax on it.
Flexible benefits with Alleo
With the right approach and tricks, as described above, employers can significantly increase the value of their benefits package without exceeding the limits of the WKR. This contributes to increased satisfaction and loyalty among your current employees and makes your organization even more attractive to future talent.
