The central plank of the WKR (or Work Related Expense) scheme is that all allowances and disbursements made available to employees are regarded as part of their wage including where the expenses in question are business-related in their entirety. The WKR scheme features a “free margin” within which allowances and disbursements may be distributed on a tax-exempt basis, to a total of 1.2 percent of the wage bill for tax purposes. Given that allowances and/or disbursements made available to your staff in excess of this limit will prompt your being presented with an 80 percent final levy on the surplus, clearly it makes sense to keep close tabs on your free margin. Make sure that you have utilised the entire free margin by year-end 2018. It may be appropriate for you to earmark additional disbursements to be charged to the free margin in order to utilise the latter “to capacity”, with due consideration, it goes without saying, for any allowances and disbursements you have already decided to make available before the year is out.
Tax-exempt bonuses?
(Year-end) Bonuses tend to be stated in gross terms. It may be worth your while to find out whether (part of) the relevant payments can be made on a tax-exempt basis (e.g. commuter allowance). Some of your free margin may still be available for the tax-exempt payment of bonuses.
Not all allowances make inroads on the free margin
As separate exemption schemes are available for particular allowances and disbursements, these do not make inroads on your free margin. As soon as an allowance made available to an employee exceeds the relevant benchmark, the surplus will be regarded as forming part of the employee’s taxable wage. Some allowances are valued at nil and as such do not involve any addition being made to the beneficiary’s wage.
Dutch version: Benut de werkkostenregeling