Answers to the most common WKR issues plus tips

And a few more misconceptions about the WKR...

The working expenses scheme (WKR) has been mandatory for every company since 2015. The idea was created to simplify all rules around allowances and reduce regulations. Expenses by employees are often seen as wages and should be taxed as such. However, there are exceptions.
After numerous adjustments, the WKR is nowhere near as simple as it was initially intended to be. After evaluating the current regulations, the government is ready to adjust some rules for simplification.
In the coming period, the State Secretary will consider in which areas the WKR can be adjusted with regard to expenses.
However, payroll administrators and accountants still struggle with various allowances provided to employees. Employees sometimes unfairly park expenses with the employer. Herewith answers to the most frequently asked WKR questions, WKR issues plus some tips.

Dining at company expense

Can you still have lunch with a colleague at company expense? In this, the tax authorities are very clear. As long as the business nature of the dinner or lunch is at least 10%, it falls outside the WKR.
But what is a business character?
A dinner during a business event, for example. Having lunch or drinks together with a colleague and discussing business does not fall under this. Unless there is a business partner along. Or if this takes place during a business event, such as a trade fair or a workshop. Employees who cannot eat at home between 17.00 and 20.00 due to overtime will also receive untaxed compensation for their meals.

Travel and accommodation costs

A hotel stay during a business trip falls under the targeted exemption. Think of itinerant staff or employees working on temporary projects and therefore having to spend the night elsewhere.
The same applies to travel expenses. Up to €0.19 per kilometre, travel expenses are untaxed. Employees who use public transport can claim these costs in full from their boss.
What about electric cars?
Did you know that employers can have a charging station installed at the employee's home untaxed? This falls under the untaxed allowance up to €0.19 per kilometre or can be included in the additional taxable benefit for private use. This also applies to electricity for the car.
And variable mileage allowances?
The employer may take the average of the mileage allowances paid to determine whether the allowance exceeds €0.19 per kilometre on average. The excess above €0.19 then constitutes taxed wages or can be designated as final salary.

Laptops and smartphones (including data traffic)

Common WKR issue, this falls under the necessity criterion.
If the employer finds it necessary for his employee to use such means, regardless of private use, these communication means fall under the targeted exemption. The employer must then bear these costs.
A co-payment may be required, for example, if the employee prefers a more expensive version of the facility offered by the employer.

Parties!

The Inland Revenue does not interfere with the free mibo at the workplace. But if it is decided to move the free mibo to the pub across the street, the tax authorities will see it as taxed wages or final taxable wages.
Should the free mibo be extended to include whole meals (call it a staff party) there should be a flat rate amount of €3.35 per meal should be charged. However, the employer may also place that amount in the free space.

WKR issue: the bonus

An employer may decide at the end of the year to use the free space by paying a bonus.
A bonus should not deviate by more than 30% from what is usual in the industry. For annual bonuses of up to €2,400 per employee, the Inland Revenue will usually not ask questions as this is considered usual.

Employers cannot simply double the annual bonus of their employees just because they suddenly realise just before the end of the year that the free allowance has not yet been fully used. If this is done, the employer runs the risk that the compensation above the 30% limit will be seen as taxed wages.

Did you know that the director-major shareholder (dga) in a PLC is considered an employee and therefore also falls under the usability test of 30%?

Tips for WKR issues in practice

Leonie de Groot, lawyer and HR adviser at RS Finance in Amsterdam
“It is wise to look at the free space periodically and not only at the end of the calendar year. For example, in the third or fourth quarter, you can still decide to fully use the free space by, for example, organising a company outing or providing Christmas hampers. Regularly checking the balance of the free space prevents you from exceeding the free space. Also check whether the targeted exemptions are used properly. On the amount above the free space, the employer pays payroll tax in the form of a final levy of as much as 80%.”
“It is wise to set up payroll in line with proper application of the WKR, so that you have insight into the balance of the free space at any time.”