Work-related costs scheme (WKR)

The free allowance of the work-related costs scheme (WKR) includes allowances and benefits in kind to employees that are not strictly necessary for the performance of work. Examples include Christmas gifts, bonuses in the form of gifts, staff parties, anniversaries, sports season tickets or a company bicycle. As an employer, you can include these untaxed benefits in the free allowance, provided they meet the WKR conditions.

In 2025, this free allowance will be 2 per cent in the initial EUR 400,000 of the total wage bill for tax purposes and 1.18 per cent on the excess. Within that allowance, you will not pay wage tax on these extras. As soon as you exceed this limit, however, a hefty final taxation will be payable. For this reason, a proper understanding and planning are crucial to avoid unnecessary costs.

Exceeding the WKR's free allowance will have direct financial consequences. Employers pay 80 per cent of the final taxation on the excess amount on top of the permitted free allowance. This taxation comes on top of the labour costs and can be unexpectedly high, especially when several smaller benefits in kind are added up and exceed the allowance. Many organisations only notice too late that they are above the limit, for instance at the year-end or after a staff activity.

The lack of an up-to-date specification or structural policy not only puts you at risk of additional taxation but also of reputation damage and internal ambiguity. A well-organised administration and proactive insights into your spending will help you avoid these risks and help make your payroll costs become most effective for tax purposes.

The WKR checker is an analysis tool used by our advisors to provide a clear view of the application of the work-related costs scheme at your organisation. Based on your allowances and benefits in kind, we check whether the free allowance has been used properly, identify any risks of excess use and identify items that require extra attention.

In addition, we can use the checker to calculate various scenarios, giving you insights into the tax consequences of planned choices. This way, we will support you not only in complying with the regulations, but also in making the most effective strategic and financial use of the WKR.