Work-related Expenses Scheme: Who Qualifies and What You Get
Learn how employers can provide tax-free allowances to staff through this scheme and the risks of exceeding your budget.
This scheme allows employers to provide certain perks and allowances to their employees without having to pay tax on those benefits.
Who it's for
This scheme is designed for employers who want to offer tax-free allowances or benefits to their staff.
What you get
You receive a fixed budget for tax-free employee perks. This allows an employer to provide various benefits to their team without those perks being treated as taxable income for the employee.
What it costs you
Using this scheme requires careful bookkeeping. You must keep precise records of your allowances and expenses to ensure everything is documented correctly. Failing to maintain these records can result in an 80% final levy.
The catch to know
The most important thing to monitor is the "vrije ruimte" (free space). This is the specific budget limit allowed under the scheme. If you go over this "vrije ruimte" limit, you will trigger a massive tax bill known as an "eindheffing" (final levy).
How to apply
- Determine your total employee perks and allowances.
- Check these amounts against your "vrije ruimte" to ensure you stay within the limit.
- Keep detailed and organized bookkeeping of all expenses to avoid a heavy levy.
- Consult with a professional or the relevant authorities to ensure your calculations for the "vrije ruimte" are accurate.