Based in The Netherlands? WKR offers tax benefit on employee lunch

The Work-Related Costs Scheme (WKR) has been updated for 2024, and this may affect how employers can gain tax benefits on employee lunches. In this article, you'll find the most up-to-date information regarding the reimbursements and provisions of meals at the office and elsewhere, according to the 2024 regulations.

1. Tax Exemption for Meals

In 2024, there are specific exemptions for the provision or reimbursement of meals that have more than an incidental business purpose. This means that meals provided during certain types of work or under specific conditions can be exempt from wage tax. These exemptions include:

- Meals during business trips: As part of temporary accommodation costs, these meals are specifically exempt. This applies to business trips and employees traveling to non-permanent workplaces, such as road workers and film crews
 
- Meals during business meetings outside the regular workplace: These meals are also exempt. An example is a lunch with a client in a restaurant

- Mobile employees: For employees who travel to various locations (such as sales representatives), meal reimbursements are also specifically exempt

2. Reimbursements for Overtime

Additionally, there are specific exemptions for meals provided in cases of overtime or other circumstances where an employee cannot eat at home between 5:00 PM and 8:00 PM or after 8:00 PM. This includes:

- Employees who, due to expected or unexpected overtime, cannot eat at home.
- Working during evening shifts, late-night work, or night shifts.
- Therapeutic meals【

3. Meals in the Company Canteen

Employers can also apply a standard reimbursement of €3.90 per meal for meals provided in the company canteen. This standard amount applies regardless of where the meal was purchased, such as at a supermarket or bakery.

4. Meals without a Business Purpose

For the reimbursement or provision of meals that have only an incidental business purpose, such as lunch at the workplace, no specific exemption applies. These meals are therefore treated as regular taxable income.

With these updates, the WKR in 2024 provides greater clarity and opportunities for tax exemptions on meals in the context of business activities.

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Source: Manual for Payroll Taxes 2024, Tax And Customs Administration, 2024 (https://www.belastingdienst.nl/wps/wcm/connect/nl/personeel-en-loon/content/werkkostenregeling)

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Let’s work through an example for a company in Amsterdam that wants to provide lunch to 100 employees, five days per week, with a budget of €12 per lunch.

Situation:
- Number of employees: 100
- Days per week: 5
- Budget per lunch: €12 ex. vat

Step 1: Calculate total weekly costs
The company offers each employee 5 lunches per week at a budget of €12 per lunch. The total weekly cost would be:  
100 employees x 5 days x €12 = €6,000 ex. vat per week.

Step 2: Deductibility under the Work-Related Costs Scheme (WKR)
Under the WKR, there is a standard amount of €3.90 per meal in the company canteen (2024) that is considered taxable wage. This standard applies regardless of the actual cost of the lunch.

The portion of the lunch costs above the standard amount is taxable income for the employee unless you include it in the free space of the WKR.

The cost per lunch for the employer is €12. The taxable portion of this lunch is:  
€12 - €3.90 = €8.10 ex. btw per meal.

Step 3: Total weekly costs under the WKR
Now we calculate the amount considered as taxable wage per week. This is the number of employees multiplied by the taxable portion per meal:  
100 employees x 5 days x €8.10 = €4,050 ex btw per week.

This amount of **€4,050** must either be designated as a final tax component and included in the free space of the WKR, or taxed as wage for the employee.

Free space:  
The free space within the WKR in 2024 is 1.92% of the wage sum up to €400,000 and 1.18% for amounts above €400,000. If the lunch costs fit within the free space, the employer doesn’t have to pay tax on it. If the costs exceed the free space, an 80% final levy will be applied on the amount that goes beyond the free space.

In this example, it’s important to know the company’s total wage sum to determine if these costs fit within the free space or if taxes will need to be paid.

Let's Eat

When setting up an account with Feedr Cloud Canteen we can set-up partly paid lunch by the employee and employer, or fully paid by either the employee or employer. In that way you can enjoy the perks of lunch at the office with the benefits of the WKR. With some extra support of the government, this is the time to get back into a healthy and strong team. So, let's have lunch! Get in touch: [email protected]

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