Work expense scheme (werkkostenregeling)
As an employer in the Netherlands, you can provide tax-free reimbursements to your employees. This is governed by the work expense scheme (werkkostenregeling).
The work expense scheme uses the concept of free space. The sum that you can reimburse free of tax rates is called the free space.
Free space in 2022:
|Taxable salary||Free space rate|
|The first €400.000||1,7%|
If the number of tax-free reimbursements exceeds the limit of the free space, you have to pay 80% tax on that part that surpasses the limit.
There are some exceptions, which include targeted exemptions, nil valuations and standard amounts. Targeted exemptions are tax-free, but not at the expense of the free space. Examples are the reimbursement for providing a laptop or the payment for training. Nil valuations are provisions valued at €0 and therefore tax-free. Nil valuations are also not at the expense of the free space. They apply for various facilities regarding work and the workplace such as facilities in the home office. Specifically for meals in the company canteen, childcare arranged by the employer and housing at the workplace, there are standard amounts. You can find more about targeted exemptions, nil valuations and standard amounts in chapter 22 of the Payroll Taxes Handbook.