What costs are covered by the WKR?
How do I use the free space?
Is a bonus or salary increase fiscally attractive with the WKR?
Does the WKR also provide a subsidy?
What about the WKR and working from home?
Does a company fitness or bicycle plan fall under the WKR?
You must declare the WKR in the payroll tax return. In that sense, the payroll department is responsible for the declaration and therefore also for the WKR. However, it is not necessarily the case that all allowances and benefits in kind are processed via the payslip. Consider, for example, the costs that the employee declares separately. These declarations are processed in the financial administration. And what about the costs for staff parties?
Our advice is that proper agreements are made between Finance, Payroll and HR so that responsibility is clear and assigned.
What costs are covered by the WKR? What exceptions are there? And how do I use the free space? Just a few questions that we often get asked in practice. A number of costs that are not directly related to the activities of your employees that fall under the WKR are:
Three categories that are not considered reimbursements in the WKR are
The free space in the WKR means that you may spend part of the wage bill untaxed on your employees. The percentages that determine the free space are adjusted frequently. View the website of the Tax and Customs Administration for the current percentages. Be careful not to exceed the free space as you have to pay 80 percent wage tax on this extra amount, also known as the final levy! You should also determine that the amount you spend on your employees is customary.
The working allowance (WKR) margin for allowances and benefits in kind was 2024 1,92 percent over the first 400,000 and 1.18 percent over the excess.
In 2025, it will be 2 percent over the first 400,000 euros of the fiscal wage bill and 1.18 percent over the excess.
As an employer, do you have difficulty correctly applying the WKR and documenting this? Use our calculation tool to easily make an indicative calculation of the flat rate amount in the WKR.
Our experience shows that the WKR often gets a limited degree of attention. In particular because the WKR is not included, or at least not structurally, in the financial administration and processes. Whilst you undoubtedly want to know whether you exceed the free space of the WKR, or whether you can still take advantage of tax opportunities by maximizing the used free space. The lack of structural embedding in the financial administration and processes is often due to the fact that no agreements have been made between Finance, Payroll and HR. That is therefore also step one that you should pay attention to.
We would like to illustrate the result with an example:
At a client it turned out that, on the basis of outdated legislation, an amount of more than 100,000 euros had wrongly been placed in the free space. This client used the entire free space. In other words, this observation resulted in a saving of up to 80,000 euros in wage tax. Of course, there can also be a downside and you exceed the free space without paying the wage tax, with possible fines and a tax interest of normally 8 percent as a result.
Many employees are currently working from home. This entails additional costs for the employee. For example, in the sense of coffee, toilet paper and electricity consumption. Possibly employees are also investing in improving the home workplace. But is that home workplace a workplace from a tax point of view? And does the WKR therefore apply?
The home office allowance fell within the free space of the WKR until 2021. This is because the allowance is not specifically exempted as the home workplace does not qualify as a workplace for the WKR. As of 2025, the home allowance is targeted exempt up to 2.40 euros per day. In 2024, it was 2.35 euros.
The WKR also offers various opportunities for the director-major shareholder. As a director you can check whether there is enough free space available to award yourself a compensation. We have various tips for the director. As a director and major shareholder you also have to deal with the so-called customary salary scheme. This arrangement means that for your work performed in your own company you must include a certain salary in your payroll tax return that is "customary". This customary wage - also known as the director-major shareholder salary - is adjusted annually. The Work Costs Scheme (WKR) offers options for lowering the director-major shareholder salary.
If you provide an employee with a salary increase, he/she will no doubt be happy with that. But your salary costs rise considerably compared to your employee’s net increase. The WKR potentially offers a solution for providing a bonus or salary increase.
Are you sure you are using the WKR properly? Or do you run a risk due to incorrect application of the WKR or exceeding the free space? In practice, we see that often the opportunities offered by the WKR are not used and that internal stakeholders receive incorrect management information. You can prevent surprises and provide the correct (reliable) information about the applications of the WKR easily, via our WKR checker.
This is because the WKR checker searches your (tax) data for (in)accuracies of the application of the WKR. This WKR checker helps you to minimize your risks and thus discover opportunities. This gives you insight and certainty, so that you can show your stakeholders that you are "in control". Do you want to know more about the WKR checker? Please contact our specialists.
