Work-Related Costs Scheme WKR: Complete Guide for Employers and Employees in Leiden
The work-related costs scheme (WKR) allows employers in Leiden, with its dynamic university and biotech sectors, to offer tax-free reimbursements and benefits within a 'free space'. This percentage of the wage sum enables secondary employment conditions such as travel allowances or Christmas hampers without payroll tax for the employee. Ideal for attracting talent in the region. Learn more about travel allowances in Leiden and the WKR. For questions: Het Juridisch Loket Leiden provides free advice.
What does the work-related costs scheme mean for Leiden?
The WKR governs the tax treatment of non-performance-related costs, such as travel expenses, smartphones, or staff meals. Since 2011, it has replaced the old deemed benefit rules with one simple system: a fixed portion of the fiscal wage sum can be spent tax-free. Excess usage incurs 80% tax on the overrun.
Key point: targeted exemptions, such as commuting costs, remain tax-free and outside the free space at all times. Perfect for commuters in Leiden.
Legal Basis of the WKR
Anchored in the Wage Tax Act 1964, Article 31, employers may use a fixed percentage of the fiscal wage sum (gross salary plus holiday pay) as free space. The Dutch Tax Authority sets this annually.
In 2024: 1.92% up to €400,000 wage sum and 1.18% above that (Dutch Tax Authority 2023). Leiden businesses track this via the forfaitaire portal and report in payroll tax returns. Errors risk fines; consult the Municipality of Leiden for local HR support.
| Year | Free Space (% of Wage Sum) | Notes |
|---|---|---|
| 2019 | 1.80% | Stable |
| 2020-2023 | 1.70% | COVID adjustment |
| 2024 | 1.92% (up to €400k), 1.18% above | Boost for vitality |
Calculate the Free Space for Your Leiden Business
Free space = forfait × wage sum. Example: €1,000,000 wage sum in 2024 = (1.92% × €400,000) + (1.18% × €600,000) = €14,760. Excess is 80% taxable, but carryover to the next year is possible (up to 80%). Use Dutch Tax Authority tools.
Targeted Exemptions Outside the Free Space
Always tax-free:
- Commuting expenses (€0.23/km, 2024).
- Business phone/internet.
- Work-related training.
- Relocation costs to Leiden.
WKR Examples from a Leiden Perspective
Example 1: University spin-off. €200 travel expenses (exempt), €50 Christmas hamper and €300 laptop from free space. With €500,000 wage sum (€9,600 space): well within budget.
Example 2: Local SME exceeds. €200,000 wage sum (€3,840 space), €5,000 on parties: €1,160 excess × 80% = €928 tax.
Example 3: Vitality. Extra budget for health since 2021, popular with young Leiden talent.
Rights and Obligations under the WKR
Employers:
- Obligation: Keep records and file returns.
- Right: Flexible benefits.
Employees:
- Right: Enjoy tax-free benefits.
- Obligation: Report private use.
Frequently Asked Questions about WKR in Leiden
Exceeding free space?
80% tax on excess. Carryover or planning prevents this.
Travel expenses under WKR?
No, specifically exempt. More about Leiden.
Combination with collective agreement?
Yes, if WKR-compliant. Check tax rules.
Self-employed and temps?
Only employment relationships. Self-employed: VAT rules; temps at hirer.
Tips for Optimal WKR Use in Leiden
- Plan early: Calculate space and discuss with team.
- Choose targeted: Prioritize popular perks like bike schemes for bike-friendly Leiden.
- Seek advice: From Het Juridisch Loket Leiden or Dutch Tax Authority for local nuances.
- Monitor: Use portals and review annually.