Work-Related Costs Scheme (WKR) and Business Gifts: Tax Guide [2026]
Last updated: April 2026 · Complete tax overview for HR, Finance, and Office Managers
WKR & Business Gifts: Tax Guide 2026
Free space, VAT rules, calculation examples, and practical tips for business gifts for employees and clients.
Cadeo Answer HubBusiness gifts for employees fall under the free space of the work-related costs scheme (WKR). In 2026, the free space is 2% on the first €400,000 of payroll and 1.18% on the remainder. Business gifts for clients do not fall under the WKR, but are deductible as business expenses up to €227 per person per year (excl. VAT). Choice gifts are subject to the same rules as traditional gifts — there is no tax difference. Always consult your accountant for specific situations.
This article provides a general overview of the tax rules for business gifts in the Netherlands (2026). It is not tax advice. Amounts and percentages may change. Always consult your accountant or tax advisor for your specific situation.
What is the work-related costs scheme (WKR)?
The work-related costs scheme is the tax system that allows employers to provide reimbursements and benefits to employees. Within the "free space," these are tax-free. If you exceed the free space, you pay an 80% final levy on the excess.
Business gifts for employees — Christmas hampers, birthday gifts, anniversary gifts, choice gifts — fall under the WKR free space.
WKR amounts 2026
Example calculation: how much free space do you have?
* Note: the free space applies to all benefits provided to employees, not just gifts. It also includes company outings, dinners, etc.
Employee gift vs. business gift: tax differences
The tax treatment differs fundamentally depending on who receives the gift:
Employee gift
Business gift
Since we started using Cadeo for our gifting policy, we have complete visibility into our WKR spending. The automatic registration and the fact that we only pay for redeemed gifts save us both time and budget.
Do choice gifts fall under the WKR?
Yes. Choice gifts fall under exactly the same WKR rules as traditional Christmas hampers or other gifts. There is no tax difference between a fixed gift and a choice gift. Both are designated as final-levy items within the free space.
Advantage of choice gifts in the WKR
- With platforms like Cadeo, you only pay for redeemed gifts. Unredeemed budget is credited back.
- This means you do not “waste” WKR space on gifts that are never used.
- You pay afterwards by invoice — one consolidated invoice per month — so you always keep track of your spending.
Are gift cards taxable for employees?
Gift cards for employees also fall under the WKR. As long as the employer designates them as final-levy items and they fit within the free space, they are tax-free for the employee. Also read: compare gift card vs. choice gift.
If a gift card can be exchanged for cash, it is considered salary and is always taxable. So make sure your gift cards cannot be exchanged for money.
Giving a gift to a self-employed person or freelancer
A self-employed person or freelancer is not an employee, so the WKR does not apply. A gift to a self-employed person falls under the same rules as a business gift for a client:
If you regularly hire freelancers, include them in your gifting policy. A choice gift sent by email works just as well for freelancers as it does for employees — no address needed, fully digital.
VAT deduction for business gifts
The VAT rules for business gifts are strict:
How a gift platform helps with WKR administration
One advantage of using a gift platform is that administration becomes easier:
Automatic registration
The platform records which gifts were redeemed and for what amount — directly usable for your WKR administration.
Only pay for what is redeemed
At Cadeo, you only pay for gifts that are actually chosen. Unredeemed budget is credited back.
Clear dashboard
Exportable overview of all sent and redeemed gifts, by campaign and by employee. Ideal for year-end closing.
HRIS integrations & invoicing
- HR system integrations: Cadeo facilitates connections with all major HRIS systems so birthdays, anniversaries, and other moments are recognized automatically.
- Invoice afterwards: pay monthly afterwards with one consolidated invoice. No upfront payment needed.
- WKR overview: all spending is recorded automatically, so you know exactly how much free space you have used.
Overview: type of gift and tax treatment
| Type of gift | Recipient | Tax framework | Max. tax-free | VAT deductible |
|---|---|---|---|---|
| Christmas hamper | Employee | WKR free space | Within free space | No |
| Choice gift | Employee | WKR free space | Within free space | No |
| Gift card | Employee | WKR free space | Within free space | No |
| Business gift | Client/partner | Business expenses | €227 p.p./year | No |
| Gift for self-employed person | Freelancer | Business expenses | €227 p.p./year | No |
| Small gesture (<€25) | Employee | Small gifts | 3x €25/year | No VAT |
Frequently asked questions
Conclusion
The tax rules around business gifts are straightforward as long as you know the distinction: employees = WKR, clients/contacts = business expenses. A few practical tips:
Sources and references
This article is compiled from publicly available tax information from the Dutch Tax Authority and common practices in the business gifting market. It is intended as a general overview, not as tax advice. Amounts are based on the known rules for 2026. Always consult your accountant or tax advisor.
Work-related costs scheme business gifts 2026 · Calculate WKR free space · How much can a Christmas hamper cost tax-free · WKR 80 percent final levy · Business gift tax deductible · Employee gift tax · Choice gift WKR rules · Gift card taxable employee · VAT business gifts · Gift for self-employed freelancer tax · Small gifts scheme explained · WKR 2026 percentages · Employee gift vs business gift tax · Maximum Christmas hamper value WKR · Simplify WKR administration
