The work-related costs scheme (WKR) allows employers to offer employees untaxed allowances and benefits in kind, such as a Christmas gift, staff party or a fitness subscription. In practice, however, the scheme turns out to be less straightforward than it seems. Without a properly organised system or policy, there is a high risk of exceeding the free allowance, resulting in a hefty final taxation of 80 per cent. Organisations also often lack knowledge of what is or is not covered by the scheme, or how to organise their administration and policy effectively.
With a well-thought-out plan, the WKR actually provides opportunities. With smart choices, well-organised processes and by using technology, the tax allowance can be used most effectively while avoiding unexpected problems. This increases your control of labour costs, allow you to provide more attractive terms of employment and ensure peace of mind in the implementation. We help you organise the WKR strategically and practically, tailored to your organisation, sector and objectives.
In this whitepaper, we will explain the discretionary scope, what the WKR can mean for your employees, and for you as director-major shareholder. We will also discuss the WKR’s place in your organisation; you will read about common mistakes, receive tips, and you will hear from one of our clients. From her own experience, she will tell you about the benefits of a good WKR application.
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Our specialists will outline your entire WKR position. With our WKR checker, you can quickly find out where you stand, where the risks are and what benefits you are missing out on. We will then help you set up the scheme on a practical and strategical level, with due allowance for compliance and financial effectiveness. If needed, we can train your HR or payroll administration team, and provide support in drawing up policy or in automating processes.
You will prevent excess use, make the most effective use of your tax allowance, and you will have control over your allowance policy. You will also strengthen your employer brand with smart terms and conditions that are tax-compliant. With our support, you will ensure that the WKR is no longer an annual surprise, but a structural advantage.
If you would like to know how your organisation can make better use of the WKR, or if you would like a demo of the WKR checker, please do contact one of our specialists.
Grant Thornton Netherlands is a member of Grant Thornton International Ltd (GTIL), one of the world's largest networks (#7) of independent accounting and advisory firms, with 76,000 professionals in 156 markets. From eight Dutch offices, more than 700 professionals support our clients with advice and guidance in the fields of accountancy, tax, and (financial) advisory. We deliver world-class expertise in a way that seamlessly aligns with each client's unique situation. We operate from a solid foundation with a flexible and results-driven mindset.
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.
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