Work Costs Provision WKR: Complete Guide for Employers and Employees in Rotterdam
The work costs provision (WKR) allows Rotterdam employers, from port companies to SMEs in the city on the Meuse, to offer reimbursements and facilities tax-free within a 'free space'. This portion of the payroll enables secondary employment conditions such as travel expenses or a Sinterklaas or Christmas package without wage tax for the employee. Ideal for the dynamic Rotterdam labor market. More about travel expense reimbursement and WKR. For questions: the Legal Aid Office Rotterdam offers free advice.
What Does the Work Costs Provision Mean for Rotterdam?
The WKR governs the tax treatment of non-work performance costs, such as travel reimbursements for commuters to the port, smartphones, or office lunches. Since 2011, it has replaced old private use addition rules with one simple system: a fixed percentage of the fiscal wage sum may be spent tax-free. Exceeding it results in 80% tax on the excess.
Key point: specific exemptions, such as commuting travel, remain outside the free space and are always tax-free. Perfect for Rotterdam commuters via metro or bike across the Erasmus Bridge.
Legal Basis of the WKR
Anchored in the Wage Tax Act 1964 (Wet LB), article 31, employers may use a percentage of the fiscal wage sum (gross salary plus holiday allowance) as free space. The Tax Authorities set this annually. Rotterdam companies follow the national rules.
In 2024: 1.92% up to €400,000 wage sum and 1.18% above (Tax Authorities 2023). Report via the portal in the payroll tax return. For issues, file an objection at the District Court Rotterdam against assessments.
| Year | Free Space (% Wage Sum) | Remarks |
|---|---|---|
| 2019 | 1.80% | Standard Rate |
| 2020-2023 | 1.70% | Adjusted Due to COVID |
| 2024 | 1.92% (up to €400k), 1.18% above | Boost for Vitality |
Calculate the Free Space for Your Rotterdam Team
Free space = fixed percentage × wage sum. Example: €1,000,000 wage sum in 2024 for a Rotterdam logistics firm: (1.92% × €400,000) + (1.18% × €600,000) = €7,680 + €7,080 = €14,760 tax-free. Surplus carry-over (up to 80%) is possible. Use Tax Authorities tools or contact the Municipality of Rotterdam for local business support.
Specific Exemptions Outside the Free Space
Always tax-free:
- Commuting travel expenses (up to €0.23/km in 2024, ideal for Rotterdam commuters).
- Business phone/internet.
- Work-related training.
- Relocation costs for new hires.
Practical WKR Examples in Rotterdam
Example 1: Port Office. €200 travel expenses (exempt), €50 Rotterdam stroopwafel package, and €300 laptop from free space. With €500,000 wage sum (€9,600 space): comfortably within budget.
Example 2: SME Overspend. €200,000 wage sum (€3,840 space), €5,000 on parties: €1,160 excess × 80% = €928 tax.
Example 3: Vitality. Extra allowance for gyms along the Meuse since 2021, beloved by young Rotterdammers.
Rights and Obligations under the WKR
Employers:
- Obligation: Keep records and file returns; retain for 7 years.
- Right: Flexible budgeting.
Employees:
- Right: Tax-free benefits.
- Obligation: Report private use.
Frequently Asked Questions about WKR in Rotterdam
What if the free space is exceeded?
80% tax on the excess. Carry-over or better planning avoids this; consult Legal Aid Office Rotterdam.
Are travel expenses covered by WKR?
No, they are specifically exempt. Details here.
WKR with a collective agreement in Rotterdam?
Yes, but the CAO cannot deviate. Verify tax compliance.
Self-employed or temps?
Only employment relationships; self-employed via VAT, temps under the hirer like Rotterdam flex agencies.
Tips for Optimal WKR Use in Rotterdam
- Plan early: Calculate space and discuss with your team, e.g., port or city colleagues.
- Choose smart locally: Prioritize vitality like Feyenoord subscriptions or bike routes.
- Seek help: Legal Aid Office Rotterdam for review.
- Monitor: Use portals and avoid penalties.