Work-Related Costs Scheme WKR: complete guide for employers and employees in Amsterdam
The work-related costs scheme (WKR) allows Amsterdam employers, from Zuidas offices to startups in Amsterdam-Noord, to offer reimbursements and facilities tax-free within a 'free space'. This percentage of the payroll makes secondary employment conditions such as public transport allowances or bike schemes attractive, without payroll tax for the employee. Ideal for the dynamic Amsterdam labor market. More about travel expense allowances and WKR.
What does the work-related costs scheme mean for Amsterdam?
The WKR governs the tax treatment of non-delivery costs, such as travel allowances for commuters to the Amsterdam ring road, mobile subscriptions, or lunch in the city. Since 2011, it has replaced the old addition rules with one simple system: a notional portion of the taxable payroll may be spent tax-free. Excess leads to 80% tax on the overrun.
Key point: specific exemptions, such as commuting by bike or tram, always fall outside the free space and remain tax-free. Perfect for Amsterdam commuters.
Legal basis of the WKR
Anchored in the Income Tax (Payroll Tax) Act 1964, Article 31, employers may use a fixed percentage of the taxable payroll sum (gross salary plus holiday pay) as free space. The Tax Authorities set this annually. For 2024: 1.92% up to €400,000 payroll and 1.18% above that. Amsterdam employers report this in their payroll tax return; errors risk assessments.
| Year | Free space (% payroll) | Remarks |
|---|---|---|
| 2019 | 1.80% | Stable |
| 2020-2023 | 1.70% | Corona adjustment |
| 2024 | 1.92% (up to €400k), 1.18% above | Focus on vitality |
Calculating the free space for your Amsterdam business
Free space = notional rate × payroll. Example: €1,000,000 payroll in 2024 for an Amsterdam tech firm: (1.92% × €400,000) + (1.18% × €600,000) = €14,760 tax-free. Excess? 80% tax, but 80% can be carried forward. Use Tax Authorities tools for accuracy.
Specific exemptions and Amsterdam practice
Always tax-free outside free space:
- Home-to-work travel expenses (up to €0.23/km or €0.19 public transport, 2024) – crucial for Amsterdammers.
- Business phone/internet.
- Work-related training.
- Relocation costs to Amsterdam.
Practical examples of WKR in Amsterdam
Example 1: Zuidas law firm. €200 GVB allowance (exempt), €50 Sinterklaas gift, and €300 laptop (free space). With €500,000 payroll (€9,600 space): well within budget.
Example 2: Excess at café owner. €200,000 payroll (€3,840 space), €5,000 on parties: €928 extra tax.
Example 3: Vitality. Extra budget for yoga in Westerpark, popular with young Amsterdammers.
Rights and obligations under WKR
Employers:
- Obligation: Keep records and file returns; consult Juridisch Loket Amsterdam if in doubt.
- Right: Flexible benefits.
Employees:
- Right: Enjoy tax-free.
- Obligation: Report private use.
Frequently asked questions about WKR in Amsterdam
What if free space is exceeded?
80% tax on excess. Carry forward possible; plan with Gemeente Amsterdam subsidies for vitality.
Do travel expenses fall under WKR?
No, home-to-work is exempt. Details.
WKR with collective agreement in Amsterdam?
Yes, if compliant with WKR. Check with Juridisch Loket Amsterdam.
Freelancers or temps?
Only employment relationships; temps via hirer, freelancers via VAT.
Tips for optimal WKR use in Amsterdam
- Plan early: Calculate space and discuss with team, e.g., bike schemes.
- Go local: Prioritize public transport and vitality for Amsterdam mobility.
- Seek advice: From Juridisch Loket Amsterdam for free help.
- Monitor: Use portals and avoid fines.