Looking after your employees

In this tight labour market, it is important to ensure that your employees receive proper attention and care. Two measures that can help here:

1. Increase in tax-free travel allowance
2. Increase in discretionary margin of the work-related expenses scheme

What are your options?

Increase in tax-free travel allowance

The maximum tax-free travel allowance in the Netherlands will rise from 19 cents to 21 cents per kilometre from 1 January 2023. A further increase to 22 cents is proposed for 2024.

Even after the increase, the tax-free allowance is not commensurate with actual travel costs, but at least it is a start.

The increase in the flat sum of 19 cents per kilometre will also apply to the travel expenses of entrepreneurs subject to income tax rules (IB-ondernemers) and recipients of income from other activities (resultaatgenieters). The other flat sums of 19 cents per kilometre will also be increased, including:

• The deduction of specific travel expenses for visiting a sick person
• The kilometre allowance for weekend expenses of disabled persons
• The deduction for gifts if a volunteer waives travel expenses

Increase in discretionary margin of work-related expenses scheme

Not yet included in any bill but already on the agenda is a temporary increase in the discretionary margin of the work-related expenses scheme (werkkostenregeling). The government will be implementing this adjustment in the Tax Plan by means of a memorandum of amendment.

For the first €400,000 of the wage bill for tax purposes, the discretionary margin will be increased by 0.22 percentage points to 1.92 per cent. For the remainder, the rate of 1.18 per cent will continue to apply. If more is reimbursed, the employer will owe a final levy of 80 per cent.

The discretionary margin of the work-related expenses scheme allows employers to give their employees tax-free reimbursements, benefits in kind and provisions (to the extent no specific exemption applies). Employers can decide freely how to use the discretionary margin, to the extent this is customary.

We are happy to help

Do you have any questions about the travel allowance and how to apply it correctly? Our international advisers are happy to help. Do you still have enough discretionary margin to make your employees happy before the year is out? If so, please contact us at international@acconavm.nl or get directly in touch with your trusted adviser.