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Work costs scheme

Summary work costs scheme

The work-related costs scheme (hereinafter “WKR”) regulates the tax treatment of allowances, benefits in kind and facilities provided by the employer to employees.  


In short, a distinction is made between:

  • Intermediate costs: these costs can be reimbursed tax-free to the employee and are not covered by the WKR. This concerns costs that the employee has advanced and that are reimbursed to him by the employer. For example, if the employee has forgotten his fuel card and pays and declares the fuel himself, an employee who buys printing paper for the office and declares the bill.

  • Targeted exemptions: reimbursements, benefits in kind and facilities that can be given tax-free. Examples of specific exemptions are the tax-free travel allowance of € 0.19 per business kilometer,  Public transport subscriptions, business travel and accommodation costs, courses, professional literature, extra-territorial costs, meals during overtime, costs of applying for a VOG.
    The necessity criterion applies to the reimbursement, provision or making available of tools, mobile telephones, tablets and laptops/computers. This means that these items can be given untaxed if they are necessary for the proper performance of the position. If these items are also used privately, there will be no tax consequences. There is no minimum for business use, the point is that without these things the employee cannot perform the job properly.

  • Zero valuations: allowances, benefits in kind and facilities that are related to the workplace and can also take place untaxed. Examples of nil valuations are coffee, tea and refreshments at the workplace, work clothing subject to conditions, health and safety provisions under certain conditions, fitness at the workplace. “Workplace” is understood to mean the workplace where the employer bears occupational health and safety responsibility.

  • Free space: other reimbursements, provisions and facilities that do not qualify as intermediary costs or specific exemptions or nil valuations must be charged to the so-called free space.  For example, staff parties, staff outings, dinners without a business character, Christmas packages, company bicycles, sports/fitness subscriptions, gifts/gifts, etc. Reimbursements for coffee/tea/water/electricity/gas/etc. in the context of working from home, as such should also be charged to the free space. There are possibilities to optimize this fiscally. 

The free space is a percentage of the employer's taxable wage bill. In 2021, the free generous amount will be 3% over the first €400,000 for taxable wage bill and 1.18% of the taxable wage bill above €400,000. The employer can therefore make allowances, benefits in kind and facilities available to the employees to the size of the free space without this leading to tax consequences for the employee and the employer. However, if the total amount of the free space is exceeded on an annual basis, the employer will owe 80% final levy on the excess. This 80% final levy is due at the end of the year in the return for February of the year following the tax year in question. If there are several companies within a group, it is possible under certain conditions to combine the free space of the various companies, the so-called group scheme.  


Points of attention at the WKR

Employers must keep a good record of which items are reimbursed, provided and made available in order to make optimal use of the WKR. The way in which this is kept is form-free. It is important, however, that the employer must explicitly indicate the matters that qualify as specific exemptions and those to which the final levy is applied. 

It is important for the employer to continuously monitor the status of the use of the free space. 

It is also important to map out in advance what the tax consequences of certain allowances, benefits in kind and facilities are and to optimize this where possible, so that exceeding the free space is limited as much as possible.


WKR toolkit/instruments has a WKR toolkit available for employers to map, optimize and monitor the WKR consequences. A quick scan of the implementation of the WKR in your organization and the associated risks and optimization options is also possible. 

Please feel free to contact Fabiënne Hol-van Goethem via or 06 22 89 39 26.

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