WKR explained in 5 minutes (without jargon)

If you have ever been responsible for arranging gifts, Christmas hampers, or other benefits for your team, you have probably come across the abbreviation WKR. It stands for "werkkostenregeling" (work-related expenses scheme). Maybe you figured it out, maybe you forwarded it to finance, or maybe you ignored it in the hope that someone else would take care of it.

The latter is understandable. The work-related expenses scheme is not the most exciting topic in the world, and it can sometimes seem very complicated. But it is something you need to understand if you want to give gifts or benefits to your team without getting an unexpected tax bill afterwards.

This is the version without the complicated jargon – which actually makes it quite easy to understand!

What is the WKR?

The work-related expenses scheme is the system that allows employers to provide tax-free allowances and benefits to their staff. Think of Christmas hampers, a bicycle, a home working allowance, an anniversary gift, or a team outing.

As an employer, you have a certain percentage of your total taxable wage sum that you can spend tax-free on these types of allowances or gifts. This is called the discretionary room ("vrije ruimte").

How much discretionary room do you have?

In 2026, the discretionary room is 2% on the first €400,000 of your total wage sum, and 1.18% on everything above that.

To make it concrete: if your total wage sum is €500,000, your discretionary room is €8,000 (2% on the first €400,000) plus €1,180 (1.18% on the remaining €100,000) = €9,180. That is the amount you can spend tax-free on benefits for your staff.

From 2027, the percentage on the first €400,000 will increase to 2.16%.

What happens if you exceed it?

If you spend more than your discretionary room, you pay an 80% tax levy on the excess amount. That is substantial. On €1,000 excess, you will therefore pay €800 in tax. That is why it is important to keep track of what you have spent and how much room is left.

Why this is relevant for gifts

This is where it gets interesting. Not everything you give to employees is treated the same way for tax purposes.

Within the work-related expenses scheme, you can give tax-free allowances and benefits to your employees as long as you stay within the discretionary room. Gifts in kind, gift cards, and choice-based gifts all fall under this. Small gifts in kind may even fall under the small gifts scheme ("attentieregeling"), meaning they do not even count against your discretionary room. When in doubt, always seek advice from a tax specialist or accountant.

Aside from the tax perspective: a gift that someone chooses themselves is much more likely to actually be used. And that, in the end, is what it is all about.

The €227 limit for business relations

Are you giving gifts to clients or business relations instead of your own employees? Then a different rule applies. Business gifts are VAT-deductible up to €227 per relation per year. If you exceed this, the deduction for the entire amount is lost.

Three things to remember

The discretionary room expires on December 31st. What you do not use, you lose. So do not save your gift budget until the very last moment – or do, but at least make sure you order on time and make good use of the discretionary room.

Keep track of what you spend. Christmas hampers, anniversary gifts, a summer team outing – it all adds up.

And another piece of advice: go for a choice-based gift concept at Christmas! Someone who chooses a beautiful product from a curated selection feels more appreciated than someone who enters a generic code at a large webshop.

Want to know more?

Would you like to know how a choice-based gift via Cadeo fits within the WKR? We would love to think along with you – even if you do not yet know exactly how much room you have left.

Schedule an introduction and we will help you on your way.