Work-related costs scheme: increase and decrease in discretionary budget

Work-related costs scheme

The work-related costs scheme allows you to offer your employees non-taxable allowances in the Netherlands. The margins for the discretionary budget are set to change again in 2021. Find out what this means for you and your employees.

 Change in margins

In 2020, the discretionary budget was increased from 1.7% to 3% of a wage bill for tax purposes of up to € 400,000. The margin for a wage bill higher than € 400,000 is 1.2%. If your wage bill is higher than € 400,000, the margin for your discretionary budget will be 1.18% with effect from 2021. This is not a temporary measure.


At a wage bill of € 400,000, your budget for tax-free allowances is € 12,000 in 2020. There are some conditions attached. Ask your adviser what they are. Please remember to earmark the allowances to avoid penalties. You can do so by qualifying the allowances as wages on which no payroll tax is due (in Dutch: eindheffingsloon). They are then charged against the discretionary budget.

To find out how to earmark allowances or how much room you have left in your discretionary budget, please contact your payroll adviser at Accon International or send an email to

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