Work-related costs scheme

Are you an entrepreneur employing staff? If so, you are required since 2015 to apply the work-related costs scheme (werkkostenregeling, WKR). Are your implementation and administration of the work-related costs scheme all in order? We will be happy to assist!

Everything is classified as salary

The purpose of the work-related costs scheme is to simplify tax and administrative matters. This scheme replaces a whole range of different rules and laws on allowances and benefits for employees. Everything that employers give their employees is now classified as salary. Employers have a tax-free margin to spend on allowances or benefits for their employees as they see fit. This tax-free margin amounts to 1.2% of the total wage bill for tax purposes. If the tax-free margin is exceeded, you as the employer and withholding agent will have to pay a final levy of 80%.


In principle, everything received in return for service is salary. However, a nil valuation or targeted exemption may apply to specific allowances and benefits under certain conditions.

For example, targeted exemptions apply to fees for conferences, as well as courses, extraterritorial costs (30% scheme) and relocation expenses. With effect from 1 January 2015, a targeted exemption also applies to mobile phones/laptops and so on, provided that they are necessary to perform the role. Finally, intermediate costs – expenses incurred by an employee for and on behalf of the employer – are also excluded from the tax-free margin. Indeed, intermediate costs are not subsumed under the definition of 'salary' for payroll tax purposes at all. This category includes the cost of parking the company car, for example.

Fixed expense allowance

Employers can still pay untaxed fixed expense allowances. However, this fixed expense allowance must only cover components that come under the definitions of targeted exemptions or intermediate costs. Furthermore, a cost investigation must first be carried out among the employees to determine what costs are actually incurred. This cost investigation subsequently serves as a starting point for setting the level of the fixed expense allowance.

How can Mazars help you?

Despite the fact that the WKR has been in force since 1 January 2015, it has proven tricky to apply the scheme correctly in practice. The specialists at Mazars will give you all the support that you need. For instance, we can perform a WKR analysis for you. This analysis comprises an assessment of the way in which various allowances and benefits are identified under the WKR. We also assess how the WKR is incorporated into your financial administration. Our specialists run regular seminars and workshops on the WKR as well.